Development of View Analysis Metrics and Their Financial Impacts on Office Rents

43 Pages Posted: 17 Feb 2021

See all articles by Irmak Turan

Irmak Turan

Massachusetts Institute of Technology (MIT)

Andrea Chegut

Massachusetts Institute of Technology

Daniel Fink

Massachusetts Institute of Technology (MIT)

Christoph Reinhart

Massachusetts Institute of Technology (MIT) - School of Architecture and Planning

Date Written: February 12, 2021

Abstract

A view contributes to a person’s visual perception, comfort, and health in a building—reducing stress, improving concentration, increasing productivity, and bolstering creativity. Yet, what makes a view alluring is also what makes it ineffable and difficult to characterize. We introduce two new metrics to quantitatively assess view access in open floorplans, and using the metrics, we measure the economic impact of views on office rents in Manhattan, New York City. We evaluate spatial view access in 5,154 office spaces; and then, combining the view analysis results with rent transaction data, we model the financial performance of rents paid by tenants with varying views whilst controlling for other vital factors impacting office rents. We find that spaces with high access to views have a 6% net effective rent premium over spaces with low access to views. This financial impact is independent of other values drivers like daylight. In the case where there is both high daylight and view access, there is also a 6% effective rent premium. Office tenants value views and have historically paid for them. The metrics introduced in this work can be used in architectural design and planning to analyze the potential for views in new and existing buildings. The value of views is evident in human health data and, as shown in this paper, in tenant lease prices; the method proposed in this work provides a systematic means by which to further explore the value of views.

Keywords: views, viewshed analysis, hedonic pricing regression, office property values, visual comfort

Suggested Citation

Turan, Irmak and Chegut, Andrea and Fink, Daniel and Reinhart, Christoph, Development of View Analysis Metrics and Their Financial Impacts on Office Rents (February 12, 2021). MIT Center for Real Estate Research Paper No. 21/03, Available at SSRN: https://ssrn.com/abstract=3784759 or http://dx.doi.org/10.2139/ssrn.3784759

Irmak Turan

Massachusetts Institute of Technology (MIT) ( email )

77 Massachusetts Avenue
50 Memorial Drive
Cambridge, MA 02139-4307
United States

Andrea Chegut (Contact Author)

Massachusetts Institute of Technology ( email )

77 Massachusetts Avenue
50 Memorial Drive
Cambridge, MA 02139-4307
United States

HOME PAGE: http://https://web.mit.edu

Daniel Fink

Massachusetts Institute of Technology (MIT) ( email )

77 Massachusetts Avenue
50 Memorial Drive
Cambridge, MA 02139-4307
United States

Christoph Reinhart

Massachusetts Institute of Technology (MIT) - School of Architecture and Planning ( email )

United States

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