Commercial real estate operating expenses : an analysis of office operating expenses using NCREIF property level data
Name
938819020-MIT.pdf
Description
Full printable version
Size
12.96 MB
Format
Adobe PDF
Checksum (MD5)
6a35cb6db122142aa99f233527ac87e0
Author(s)
Owusu-Opoku, Peter K
Advisor(s)
William C. Wheaton.
Alternative Title
Analysis of office operating expenses using National Council of Real Estate Investment Fiduciaries property level data
Date Issued
2015
Publisher
Massachusetts Institute of Technology
Abstract
How do the various categories of operating expenses for institutional grade office buildings vary with changes in rental income and occupancy? The general consensus held is that, following the linear relationship that exists between variable expenses, occupancy and income; a change in either occupancy or income would result in a change in variable expenses. The question is by how much and in what direction? This thesis contributes to answering that question by exploring how tax, utility, insurance and maintenance expenses for office properties, across key markets in the United States, vary with rental income and occupancy level changes. To achieve this, time-series data on income and expense data for office properties from Q1 2000 to Q4 2014 was analyzed using two panel regressions. One with fixed effects for buildings to exclude all idiosyncratic characteristics of properties and another with fixed effects for time that captured the building differences. The analysis shows that the elasticities of these expenses to changes in income and occupancy vary across expense type and also across geographic location. Additionally, in majority of the cases, these elasticities were statistically significant.
Description
Thesis: S.M. in Real Estate Development, Massachusetts Institute of Technology, Program in Real Estate Development in conjunction with the Center for Real Estate, 2015.
Cataloged from PDF version of thesis.
Includes bibliographical references (page 54).
Subjects
Center for Real Estate. Program in Real Estate Development.
MIT Department
Massachusetts Institute of Technology. Center for Real Estate. Program in Real Estate Development.
Massachusetts Institute of Technology. Center for Real Estate
Terms of Use
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