Designer Buildings and the Economic Value of Signature Architecture

33 Pages Posted: 16 Apr 2009 Last revised: 1 Jul 2010

See all articles by Franz Fuerst

Franz Fuerst

University of Cambridge - Department of Land Economy; University of Melbourne; City University of New York - Center for Urban Research

Patrick M. McAllister

University of Reading - Department of Real Estate and Planning

Claudia Beatriz Murray

University of Reading - Department of Real Estate and Planning

Date Written: April 15, 2009

Abstract

This study investigates whether commercial offices designed by signature architects in the United States achieve rental premiums compared to commercial offices designed by non-signature architects. Focusing on buildings designed by winners of the Pritzker Prize and the Gold Medal awarded by the American Institute of Architects, we create a sample of commercial office buildings designed by signature architects drawing on CoStar's comprehensive national database. We use a combination of hedonic regression model and a logit model to estimate the various price determinants. The results of the hedonic analysis suggest that, compared to buildings in the same submarket, office buildings designed by signature architects have rents that are 5-7% higher and sell for prices 17% higher. The results from the second-stage logit estimation suggest a rental premium of approximately 5% for signature architects in large architectural practices while the sales price premium identified in the first stage hedonic regression was not confirmed.

Keywords: commercial real estate appraisal, rental price determination, design and branding of architecture

JEL Classification: R33, M31, C31, C25

Suggested Citation

Fuerst, Franz and McAllister, Patrick M. and Murray, Claudia Beatriz, Designer Buildings and the Economic Value of Signature Architecture (April 15, 2009). Available at SSRN: https://ssrn.com/abstract=1383162 or http://dx.doi.org/10.2139/ssrn.1383162

Franz Fuerst (Contact Author)

University of Cambridge - Department of Land Economy ( email )

19 Silver Street
Cambridge, CB3 9EP
United Kingdom

HOME PAGE: http://www.landecon.cam.ac.uk/directory/dr-franz-fuerst

University of Melbourne ( email )

185 Pelham Street
Carlton, Victoria 3053
Australia

City University of New York - Center for Urban Research

CUNY The Graduate Center
New York, NY 10011
United States

Patrick M. McAllister

University of Reading - Department of Real Estate and Planning ( email )

Reading RG6 6AW
United Kingdom

Claudia Beatriz Murray

University of Reading - Department of Real Estate and Planning ( email )

Reading RG6 6AW
United Kingdom

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