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| Do Market Rents Reflect the Value of
Special Building Features? The Case of Office Atriums Author: John Doiron, James D. Shilling, and C.F. Sirmans Start Page: 147 Abstract: Office buildings,
hotels, and even residential apartment buildings often contain large amounts of space used
for public purposes. An example is provided by buildings with atriums. In this article we
examine the trade-off between leasable area in office buildings and the amount of the
structure's space that is used for an atrium. The insights of our model suggest that the
optimal level of planned atrium space increases with a decrease in unit development cost
and decreases with an increase in market rents. The model is used to specify a hedonic
rent function for comparable office buildings with and without atriums. This hedonic model
allows us to test the extent to which charges for amenities such as atrium space are
passed through to tenants in the form of higher rents. |
