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Article: Renewing a Lease at a Discount or Premium?
Title | Renewing a Lease at a Discount or Premium? |
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Authors | |
Issue Date | 2017 |
Publisher | American Real Estate Society. The Journal's web site is located at http://aux.zicklin.baruch.cuny.edu/jrer/ |
Citation | Journal of Real Estate Research, 2017, v. 39 n. 2, p. 215-234 How to Cite? |
Abstract | Occupancy discount is a long-accepted doctrine in literature. Search theory supports such a proposition, but the empirical evidence is mixed. In this study, we revisit this dilemma and put forward an alternative argument that a landlord may exploit tenants who have made non-redeployable investments and charge
them an occupancy premium. Based on data of high-end commercial properties where quality information is symmetric, the findings confirm that the magnitude of discounts/premiums hinges on the tradeoff between asset specificity and search. We also demonstrate that instrumental variables estimation is a better approach to correcting endogeneity bias in lease renewal decisions. |
Persistent Identifier | http://hdl.handle.net/10722/245215 |
ISSN | 2023 Impact Factor: 1.2 2023 SCImago Journal Rankings: 0.347 |
DC Field | Value | Language |
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dc.contributor.author | Wong, SK | - |
dc.contributor.author | CHEUNG, KS | - |
dc.date.accessioned | 2017-09-18T02:06:42Z | - |
dc.date.available | 2017-09-18T02:06:42Z | - |
dc.date.issued | 2017 | - |
dc.identifier.citation | Journal of Real Estate Research, 2017, v. 39 n. 2, p. 215-234 | - |
dc.identifier.issn | 0896-5803 | - |
dc.identifier.uri | http://hdl.handle.net/10722/245215 | - |
dc.description.abstract | Occupancy discount is a long-accepted doctrine in literature. Search theory supports such a proposition, but the empirical evidence is mixed. In this study, we revisit this dilemma and put forward an alternative argument that a landlord may exploit tenants who have made non-redeployable investments and charge them an occupancy premium. Based on data of high-end commercial properties where quality information is symmetric, the findings confirm that the magnitude of discounts/premiums hinges on the tradeoff between asset specificity and search. We also demonstrate that instrumental variables estimation is a better approach to correcting endogeneity bias in lease renewal decisions. | - |
dc.language | eng | - |
dc.publisher | American Real Estate Society. The Journal's web site is located at http://aux.zicklin.baruch.cuny.edu/jrer/ | - |
dc.relation.ispartof | Journal of Real Estate Research | - |
dc.title | Renewing a Lease at a Discount or Premium? | - |
dc.type | Article | - |
dc.identifier.email | Wong, SK: skwongb@hku.hk | - |
dc.identifier.authority | Wong, SK=rp01028 | - |
dc.identifier.hkuros | 276473 | - |
dc.identifier.volume | 39 | - |
dc.identifier.issue | 2 | - |
dc.identifier.spage | 215 | - |
dc.identifier.epage | 234 | - |
dc.publisher.place | United States | - |
dc.identifier.issnl | 0896-5803 | - |