Office rent and labor availability in the Chicago Metropolitan Area

Abstract

This paper provides an empirical analysis of office rents using data from the 2000 U.S. Census and TWR office building data in the Chicago Metropolitan Statistical Area. The results indicate that rent levels respond to variables measuring labor availability. The relationship between spatial supply of office space and labor availability is also explored. Balanced scenarios are estimated in each unit area, and areas with an under-supply of office space demonstrate development opportunities. Land use regulation is suggested to explain the difference between the model results of the office rent and of the supply of office space.