Document Type




Format of Original

28 p.

Publication Date




Source Publication

Journal of Real Estate Finance and Economics

Source ISSN



This paper is concerned with the market rental rate for space offered by commercial property and how that rental rate evolves over time. Rental rates reflect the value of the services provided by the property and can have a significant impact on the ability of its owners to make monthly debt obligations. We investigate commercial property rent dynamics for 34 large metropolitan areas in the U.S. The dynamics are studied from the second quarter of 1990 through the second quarter of 2009 and the results are compared across four property types or uses (office, industrial, flex, and retail). There is substantial heterogeneity in both the long and short run responses to changing demand and supply conditions. In general, the office market is the slowest to adjust back towards equilibrium while industrial and flex markets adjust back to the long run equilibrium very quickly. For industrial and office types, the speed of adjustment is substantially faster within quality segments and is strongest for grade A properties.


Accepted version. Journal of Real Estate Finance and Economics, Vol. 46, No. 2 (February 2013): 232-259. DOI. © 2013 Springer. Used with permission.

Shareable Link. Provided by the Springer Nature SharedIt content-sharing initiative.

pennington_5505acc.docx (182 kB)
ADA Accessible Version