Term structures in the office rental market in Stockholm

This paper contains an empirical study of the rental term structure in a property market that included a dramatic boom and bust cycle. The study is applied to office leases in commercial properties located in Stockholm CBD, Sweden. The time period under study is 1977-1991. The number of observations (lease contracts) that we were able to make full use of in the regression analyses is n = 861. For seven out of fifteen years studied, a significant term structure was observed. The estimated hedonic rent equation was also used to construct an office rental index.