search query: @author Hendershott, P. / total: 3
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| Author: | Hendershott, P. |
| Title: | Rental adjustment and valuation in overbuilt markets: evidence from the Sydney office market |
| Journal: | Journal of Urban Economics
1996 : JAN, VOL. 39:1, p. 51-67 |
| Index terms: | URBAN AREAS ECONOMICS VALUATION |
| Language: | eng |
| Abstract: | In equilibrium, real estate will be valued at (approximately) replacement cost. When value exceeds replacement cost in a market, new construction surges, raising vacancies and lowering rates and thus value. When replacement cost exceeds value, replacement construction is deferred, lowering vacancies and raising rents and value. Moreover, expectations of the construction, vacancy, and rent responses imply that existing real estate values will be only modestly sensitive to changes in required real after-tax returns caused by real interest rate or tax changes. |
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