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Article: Renewing a Lease at a Discount or Premium?

TitleRenewing a Lease at a Discount or Premium?
Authors
Issue Date2017
PublisherAmerican 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?
AbstractOccupancy 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 Identifierhttp://hdl.handle.net/10722/245215
ISSN
2020 Impact Factor: 1.125
2020 SCImago Journal Rankings: 0.360

 

DC FieldValueLanguage
dc.contributor.authorWong, SK-
dc.contributor.authorCHEUNG, KS-
dc.date.accessioned2017-09-18T02:06:42Z-
dc.date.available2017-09-18T02:06:42Z-
dc.date.issued2017-
dc.identifier.citationJournal of Real Estate Research, 2017, v. 39 n. 2, p. 215-234-
dc.identifier.issn0896-5803-
dc.identifier.urihttp://hdl.handle.net/10722/245215-
dc.description.abstractOccupancy 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.languageeng-
dc.publisherAmerican Real Estate Society. The Journal's web site is located at http://aux.zicklin.baruch.cuny.edu/jrer/-
dc.relation.ispartofJournal of Real Estate Research-
dc.titleRenewing a Lease at a Discount or Premium?-
dc.typeArticle-
dc.identifier.emailWong, SK: skwongb@hku.hk-
dc.identifier.authorityWong, SK=rp01028-
dc.identifier.hkuros276473-
dc.identifier.volume39-
dc.identifier.issue2-
dc.identifier.spage215-
dc.identifier.epage234-
dc.publisher.placeUnited States-
dc.identifier.issnl0896-5803-

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