This paper examines the persistence of differentiated pricing in the multi-family housing related to eco-certification. In examining a sample of market rents for non-specialty, multi-family properties both across the U.S., as well as those areas that enjoy the highest concentrations of LEED certified apartments, we find rental premiums of 10.2% and 14.7%, respectively for those properties with LEED certification. The addition of the continuous Walk Score, to control for variations in urban form, results in premiums of 7.4% and 9.6%, respectively. These findings are directionally consistent with those found in earlier studies, and demonstrate a persistence in rental premiums for certified properties over time, and with increased LEED adoption.

Drawing on a sample, of U.S. multi-family apartment and school data from across 45 U.S. Core Based Statistical Areas, this paper examines the capitalization of school quality into apartment rents. It makes three contributions. First, in the context of the geographically diverse data, results tend to be consistent with individual market analyses in the extant literature though there is some important geographic variation. Second, capitalization patterns vary across measures of school quality and tend to consistent with observed patterns within the single-family oriented research including by region. Third, congruent with life cycle literature, multi-family renters appear, on average, to capitalize primary school quality to a greater extent than intermediate and secondary school levels. Results are robust when considering school choice and other inter-jurisdictional nuances or econometric techniques.

Purpose Automated valuation models (AVMs) are statistical asset pricing models omnipresent in residential real estate markets, where they inform property tax assessment, mortgage underwriting and marketing. Use of these asset pricing models outside of residential real estate is rare. The purpose of the paper is to explore key characteristics of commercial office lease contracts and test an application in estimating office market rental prices using an AVM. Design/methodology/approach The authors apply a semi-log ordinary least squares hedonic regression approach to estimate either contract rent or the total costs of occupancy (TOC) (“grossed up” rent). Furthermore, the authors adopt a training/test split in the observed leasing data to evaluate the accuracy of using these pricing models for prediction. In the study, 80% of the samples are randomly selected to train the AVM and 20% was held back to test accuracy out of sample. A naive prediction model is used to establish accuracy prediction benchmarks for the AVM using the out-of-sample test data. To evaluate the performance of the AVM, the authors use a Monte Carlo simulation to run the selection process 100 times and calculate the test dataset's mean error (ME), mean absolute error (MAE), mean absolute percentage error (MAPE), median absolute percentage error (MdAPE), coefficient of dispersion (COD) and the training model's r-squared statistic ( R 2 ) for each run. Findings Using a sample of office lease transactions in Sydney CBD (Central Business District), Australia, the authors demonstrate accuracy statistics that are comparable to those used in residential valuation and outperform a naive model. Originality/value AVMs in an office leasing context have significant implications for practice. First, an AVM can act as an impartial arbiter in market rent review disputes. Second, the technology may enable frequent market rent reviews as a lease negotiation strategy that allows tenants and property owners to share market risk by limiting concerns over high costs and adversarial litigation that can emerge in a market rent review dispute.

This paper examines U.S. residential consumer willingness to pay for location efficiency, a normative advancement of new urbanism. Drawing on a national sample of multi-family housing data joined to measures of urban form and spatial structure, empirical models suggest three contributions to the literature. First, renters are willing to pay for greater location efficiency and for individual attributes of more efficient locations. Second, renters’ tastes and preferences for location efficiency are spatially heterogeneous. Third, location efficiency data appears to provide a meaningful level of control for locational quality. These contributions extend prior research efforts related to bid rent and urban amenities.

PurposeThe purpose of this paper is to investigate whether energy-efficient green buildings tend to provide net lease structures over gross lease ones. It then considers whether owners benefit by trading away operational savings in a net lease structure.Design/methodology/approachEmpirical models of office leasing transactions in Sydney, Australia, with wider transferability supported by analysis of office rent data in the USA.FindingsLabeled green buildings are approximately four to five times more likely than non-labeled buildings to use a net lease structure. However, despite receiving operational savings, tenants in net leases pay higher total occupancy costs (TOC), benefiting owners. On average, the increase in TOC paid by tenants in a net lease is equal to or greater than savings attributed to an eco-labeled building.Practical implicationsA full accounting of TOC in eco-labeled buildings suggests that net lease structures provide numerous benefits to owners that offset the loss of trading away operational savings.Originality/valueThe principal-agent market inefficiency, or “split incentive,” is a widely cited barrier to private investment in energy-efficient building technology. Here, a uniquely broad look at rental cash flows suggests its role as a barrier is exaggerated.

We confirm existing findings of significant premiums for waterfront proximity, more so for oceans, bays, and large lakes than rivers. We then expand research on housing price trends immediately before and after major storms in directly affected markets. Our findings support a consensus view that single-family home prices rebound quickly to prior macro trends after major storms, with little persistent negative impact on value. In addition, using elevation as a proxy for flood risks associated with sea level rise, we find inconsistent evidence that the market perceives flood risk and discounts property prices accordingly. The absence of a permanent market reaction may change as the market is exposed to increases in insurance premiums or other direct pricing of the risks. Our results suggest either a short-term horizon for buyers of coastal properties at risk, or a moral hazard problem whereby residential owners are dependent upon and subsidized by government and mispriced flood risk insurance premiums.

Abstract Thousands of species worldwide are threatened with extinction due to human activities. For some animals, such as elephants, totoaba, and bluefin tuna, population declines are largely driven by hunting. High prices and large profits create a strong incentive for illegal hunting, even in the face of penalties and strict international restrictions against trade. One innovative solution to help reverse the declines of such species is to farm them to increase supply, thereby reducing prices and decreasing hunting incentives. However, this idea has been criticized as impractical, though some examples exist of successful implementation. Here, we evaluate the hurdles facing endangered species farming as a market‐based mechanism to reduce illegal harvest of wild populations and provide guidance on when it is most likely to be effective. Using a simple model, we show how farming costs and enforcement of anti‐poaching measures are key drivers of success for this solution. We also argue that many of the most promising candidates are aquatic species that have been largely overlooked. Thus, while conservation farming may not be a solution for all endangered species, it should be more seriously considered for species that could be produced quickly and cost‐effectively.

Across public health, medicine, urban planning, real estate and public policy interest in walkability, a latent construct, has grown substantially. Using the multi-family housing market as a lens through which to examine consumer preferences, this paper exploits a large spatially diverse data set to examine how urban form reveals the heterogeneous nature of walkability. Findings illustrate that when the urban form data that largely constitutes popular aggregate metrics are included in the empirical models, the economic and statistical significance of walkability measures decline and, in some cases, disappear. These results highlight the diverse nature of urban form and the unique characteristics that promote walkability across regions and localities. The more nuanced measures used herein better capture and control for these differences across urban areas than nationally homogeneous indices of walkability.

Rising urban population growth increases demand for multi-family housing; sustainable urban form and building level sustainability represent vital planning areas for this demand . Here, the multi-family housing stock is used to examine consumer preferences about sustainability in growing urban areas. Drawing on a data set of more than 40,000 apartment buildings/complexes from Apartments.com and secondary data from the describing urban form, walkability, proximity, access to transit, schools, and crime, this paper addresses the question: what sustainability features are desirable both in building and locational form in the largest U.S. CBSAs? Methodologically, the paper uses the traditional hedonic modeling techniques that include both apartment complex and unit attributes. These models are augmented with spatial and locational attributes designed to reveal preferences for sustainability in cities. Further, the unique data reveals previously unobserved property and locational traits. Model results have implications for property investors, developers, asset managers, and urban policy makers

Frequent site energy consumption auditing is a potential strategy to mitigate greenhouse gas (GHG) emissions from existing buildings. Such a strategy has been practised in Australia for nearly 15 years. This paper documents and analyses the effect of repetitive audits on measured site energy consumption. Using a self-constructed database of over 3500 audited disclosures representing over 800 unique office buildings, empirical models demonstrate that measured site energy consumption declines, on average, over the first five re-certification periods. The results also suggest a market average post-certification equilibrium in Australia of approximately 430MJ/m(2)/year (120kWh/m(2)/year) within approximately six years, if all else - including green management strategy - is held constant. Since GHG emissions from buildings in Australia are highly correlated with site energy consumption, such a result is comparable with meeting 50-year GHG mitigation targets reliant on the implementation of existing technologies. This suggests that repetitive auditing is a successful approach for motivating owners to invest in existing energy efficiency technologies.

In 2010, the federal Australian government mandated the disclosure of energy performance ratings in advertisements for sale or lease of large commercial office properties. Prior to 2010, participation in the rating scheme was voluntary. This study first develops a theoretical model of mandatory disclosure policy effectiveness. Then, with a dataset of all ratings since inception of the voluntary regime in 1999, it tests the expectation that initial voluntary adopters have a greater tendency towards environmental stewardship and are more likely to manage and invest in environmental performance improvements, potentially dampening the effectiveness of mandatory disclosure policy. However, multiple statistical models of certification are unable to reject the null hypothesis that there is no difference in energy efficiency outcomes between the mandatory and voluntary adopters at equivalent stages. For urban policymakers, the extrapolation of voluntary adopter performance appears to be a good – perhaps even conservative – estimation of mandatory energy performance disclosure outcomes.

Starting with its founding in 1985, the American Real Estate Society (ARES) has a long and distinguished tradition of supporting and fostering innovation within the community of real estate research and practice. In this paper, we highlight the creation of a new network within ARES called the Future Leaders of the American Real Estate Society (FLARES). The purpose for FLARES is to complement and enhance the doctoral program's implicit role in leadership recruitment and to create a structural pathway to involvement in senior leadership. We focus on the opportunity and need for FLARES, its organization, and its fit within and strategies to complement and amplify current ARES programming.

Purpose– Using a unique data set, the purpose of this paper is to test the hypothesis that tenants pay increased accommodation costs for space in energy efficient office property.Design/methodology/approach– The authors obtain lease contracts for office space in central Sydney, Australia. Empirical data on annual gross face rent and contract terms from each lease are combined with building characteristics and measured energy performance at the time of lease. Hedonic regression isolates the effect of energy performance on gross face rent.Findings– No significant price differentials emerged as a function of energy performance, leading to a conclusion that tenants are not willing to pay for energy efficiency. Six factors – tenancy floor level, submarket location, proximity to transit, market fixed effects, building quality specification and, surprisingly, outgoings liability – consistently explain over 85 per cent of gross face rent prices in Sydney.Research limitations/implications– Rent premiums from an asset owner's perspective could emerge as a result of occupancy premiums, market timing or agent bias combined with statistically insignificant rental price differentials.Practical implications– Tenants are likely indifferent to energy costs because the paper demonstrates that energy efficiency lacks financial salience and legal obligation in Sydney. This means that split incentives between owner and tenant are not a substantial barrier to energy efficiency investment in this market.Originality/value– This study is the first to thoroughly examine energy efficiency rent price premiums at the tenancy scale in response to disclosure of measured performance. It also presents evidence against the common assumption that rent premiums at the asset scale reflect tenant willingness to pay for energy efficiency.

Preliminary studies on green multi-tenanted office buildings in the United States, Europe and Australia have widely reported the presence of price premiums for certified green or energy-efficient buildings. When researchers look at sales and rental premiums, it is generally concluded that both are present relative to uncertified office buildings. The scale employed in the vast majority of these studies is the building scale, not individual tenancies. Because of this, an alternative explanation for energy efficiency rental premiums is that they originate in the methodology used to calculate a single rental rate that represents the heterogeneous mix of rents within a single building. To test the robustness of rent premiums in Australia, we self-construct a dataset of lease transaction data covering all NABERS Energy-certified buildings in central Sydney directly from lease contracts. The characteristics of each transaction are placed in a hedonic regression model to explain annual base rent per square metre. We find neither significant premiums for highly rated buildings nor significant discounts for poorly rated buildings, implying that the alternative explanation of green rental premiums arising from the process of calculating a single rent for an entire building has merit. Incentives and net effective rent are also considered, to test if Sydney rents are shadow prices. We conclude that green building price premiums in Sydney are paid by owners, not tenants.

Rainwater harvesting is effectively mandated in several urban areas of New Zealand. To understand the costs and benefits of rainwater harvesting from an end-user perspective, semistructured interviews were conducted with 14 homeowners in northern Auckland affected by these regulations. Residents report differences in four aspects of urban rainwater infrastructure - security of supply, water quality, the learning process and financial costs - that could represent key values for public acceptance. When responses are examined from the perspective of experience that has built empirical knowledge, participants explained how their satisfaction with rainwater harvesting increased over time. We hypothesise that for those lacking experience, urban rainwater consumption is a function of empirical knowledge and has initially rising marginal utility. Regulation that recognises the costs of social learning is likely to be a more effective pathway towards maximising the social benefits associated with integrated urban water management.

Monitoring results are presented as an annual water balance from the pioneering Landcare Research green building containing commercial laboratory and office space. The building makes use of harvested roof runoff to flush toilets and urinals and irrigate glasshouse experiments, reducing the demand for city-supplied water and stormwater runoff. Stormwater treatment devices also manage the runoff from the carpark, helping curb stream degradation. Composting toilets and low-flow tap fittings further reduce the water demand. Despite research activities requiring the use of large volumes of water, the demand for city-supplied water is less than has been measured in many other green buildings. In line with the principles of sustainability, the composting toilets produce a useable product from wastes and internalise the wastewater treatment process.