What drives office rents?

Bericht

Banks have substantial exposures to commercial real estate (CRE). Rental prices are important for CRE companies' debt-service capacity, which in turn affects the risk of future bank losses. In this paper, we estimate error correction models (ECMs) to determine the main drivers of office rents in Oslo and to detect deviations in rents from their estimated long-run equilibrium. We find that employment and stock of offices are important explanatory variables. Moreover, our results show that rents have followed their estimated equilibrium closely and have re-adjusted quickly in periods of deviation.

Object Details

• ISBN: 978-82-8379-130-3
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Staff Memo ; No. 12/2019

Classification and Topics

• Classification: Wirtschaft ; Single Equation Models; Single Variables: General ; Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data) ; Real Estate Markets, Spatial Production Analysis, and Firm Location: General
• Subject: Rental prices ; commercial real estate ; financial stability

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bjørland, Christian ; Hagen, Marius
• Event: Veröffentlichung
• (who): Norges Bank
• (where): Oslo
• (when): 2019

Further information

• Handle: http://hdl.handle.net/10419/246131
• Last update: 10.03.2025, 11:43 AM CET