Commercial Real Estate Returns and Innovation
Journal of Real Estate Research, Forthcoming
39 Pages Posted: 18 Mar 2022 Last revised: 4 Nov 2022
Date Written: October 15, 2022
Abstract
We investigate the relation between commercial real estate (CRE) returns and regional innovativeness and find that regions with more innovation exhibit higher total returns on commercial property. And, when we investigate the extent to which income return and capital return on commercial properties are related to local innovativeness, we report a positive relation between innovativeness and income return but little to no association between innovativeness and capital return. Our paper also provides some initial evidence suggesting that local innovativeness is related to better future CRE performance. Overall, this paper suggests that the innovativeness of a region is economically and statistically positively related to CRE returns, adding to a budding literature investigating CRE returns and extensive literature researching innovation.
Keywords: Innovation, Patent, Commercial Real Estate, Return, NCREIF
JEL Classification: R11, R33, O30
Suggested Citation: Suggested Citation