1. Negative Externalities of Structural Vacant Offices
Sabira El Messlaki, Philip Koppels, Hilde Remøy and Clarine van Oel

2. Introduction Negative Externalities and Structural Vacancy
High levels of vacancy
Concentration in specific areas and buildings
Social security, criminality
Negative externalities related to structural vacant buildings?
Positive externalities are often assumed
Landmark buildings
Spatially lagged dependent variable specification

21. Structural Vacancy Operationalization
“Structural” nature: three consecutive years
Visibility of vacancy: at least 50% of the building is vacant

27. Research Method Hedonic Pricing Data sample: 128 buildings
274 transactions

28. Research Method
Hedonic Equation

29. structural vacant office buildings
450 m
50 m
r=500m
300 m
office buildings
structural vacant office buildings
Building size (GFA) m²
500 m²

30. 450 m
50 m
r=500m
Impact depends on:
Distance
Building size
300 m

31. Results Fit Statistics -2 Log Likelihood -282.2
AIC (smaller is better)
-252.2
AICC (smaller is better)
-250.3
BIC (smaller is better)
Covariance Parameter Estimates
Subject
Estimate
Intercept
Building
Time period
Residual

32. Results Solution for Fixed Effects Effect Estimate Std. Error DF
t Value
Pr > |t|
Intercept
52.631
0.2703
121
19.47
<.0001
Ln Age
137
-3.06
0.0027
Ln Distance Tram or Metro
-2.25
0.0263
Ln Amenities (r=500m)
119
2.31
0.0224
Ln employment industry (r=500m)
120
-2.86
0.0050
Ln employment F&B (r=500m)
2.75
0.0070
Ln inverse parking ratio
0.1862
3.44
0.0008
Garage No
-3.18
0.0019
Yes
Façade
Low
-3.38
0.0010
Standard
118
-3.53
0.0006
High
Company Logo
-2.53
0.0129
Sp lagged vacancy
61.5
-2.30
0.0246

33. Predicted rent levels: No structural vacant neighbors € 155,-
Age 10
Distance Tram or Metro
400
Amenities (r=500m) 18
Employment industry (r=500m)
1000
Employment F&B (r=500m)
4500
Parking ratio (1:LFA)
110
Garage
Yes
Façade
High
Company Logo
Predicted rent levels:
No structural vacant neighbors
€ 155,-
2 structural vacant neighbors of 10,000 GFA and at distance 50m
€ 148,-
50 m
r=500m
50 m

34. Results

35. Conclusion & Discussion
Base model seems plausible
Significant relationship structural vacant offices and rent prices nearby buildings
Vicious circle?
Collective action
Some issues to consider
Proxy
Weight matrix specification
Submarket dummies

36. Questions?
Contact author: