Simon Kempf has developed hedonic (quality-adjusted) office rent indices for German metropolitan areas. His study explores new territory as it constructs, for the first time, such indices for Germany. The author thereby has taken into account the different qualities of the underlying lease contracts regarding location factors, lease factors, building factors, equipment and layout factors of the office rental unit - using more than 22,005 office lease contracts stored in the Rental Databank of IPD GmbH in Wiesbaden. This hedonic index construction methodology is well known among real estate researchers and statisticians, but it has been mainly used in the residential sector. As a second novelty the multiple imputation method in the statistical analysis to solve the problem of missing data is employed. Quality-adjusted office rent indices serve as market and economic indicators as well as a bench-marking instrument.

Dr. Simon Kempf wrote his dissertation at the Real Estate Management Institute (REMI) of the EBS European Business School.

1;PREFACE OF THE EDITORS;6 2;PREFACE OF THE AUTHOR;8 3;CONTENT OVERVIEW;9 4;APPENDIX;12 5;CONTENT;13 6;LIST OF FIGURES;21 7;LIST OF TABLES;24 8;LIST OF ABBREVIATIONS;37 9;LIST OF SYMBOLS;39 10;1 Introduction;42 10.1;1.1 Research Problem;42 10.2;1.2 Aim and Objectives;49 10.3;1.3 Research Approach and Methodology;50 10.3.1;1.3.1 Research Approach;50 10.3.2;1.3.2 Research Methodology;53 10.3.3;1.3.3 Theoretical Framework;55 10.4;1.4 Relevance of the Study;57 10.5;1.5 Outline of the Research;60 11;2 Theory of the Construction of Hedonic Price Indices;64 11.1;2.1 Hedonic Function (Estimation Stage);64 11.1.1;2.1.1 Demand or User Side;66 11.1.2;2.1.2 Supply, Producer, or Landlord Side;68 11.1.3;2.1.3 Market Equilibrium;70 11.1.4;2.1.4 Interpretation of Regression Coefficients in Hedonic Functions;71 11.2;2.2 Construction Methodology for Hedonic Price Indices (Composition Stage);75 11.2.1;2.2.1 Time Dummy Variable Method;75 11.2.2;2.2.2 Adjacent Period Dummy Variable Method;76 11.2.3;2.2.3 Characteristics Price Index Method;76 11.2.4;2.2.4 Comparison and Evaluation of the Index Construction Method;78 11.3;2.3 Chapter Summary;79 12;3 Fundamentals of the Office Property Market and the Implications for Hedonic Price Indices;81 12.1;3.1 Characteristics of Office Property;81 12.1.1;3.1.1 Characteristics of Real Estate;81 12.1.2;3.1.2 Office Property and Its Differences from Other Property Types;82 12.2;3.2 Defining Principles;86 12.2.1;3.2.1 Rent;86 12.2.2;3.2.2 Price;88 12.2.3;3.2.3 Value;89 12.2.4;3.2.4 Worth;90 12.3;3.3 Office Market Dynamics;91 12.3.1;3.3.1 User Market;91 12.3.2;3.3.2 Financial Asset Market;93 12.3.3;3.3.3 Development Market;94 12.3.4;3.3.4 Land Market;96 12.3.5;3.3.5 Adjustment Processes for the Office Property Markets and the Importance of Rent;97 12.4;3.4 Office Property Market Efficiency;99 12.4.1;3.4.1 Definitions and Forms of Property Market Efficiency;99 12.4.2;3.4.2 Causes of Office Property Market Inefficiency;100 12.4.3;3.4.3 Implications of Inefficient Office Property Markets;101 12.5;3.5 Real Estate Office Rental Cycles;102 12.5.1;3.5.1 Causes for Real Estate Cycles and Cycle Phases;102 12.5.2;3.5.2 Office User and Landlord Behaviour during Cycle Phases and its Implication for Hedonic Price Indices;108 12.6;3.6 Chapter Summary;110 13;4 Office Rent Determinants;112 13.1;4.1 International Literature Review;112 13.1.1;4.1.1 Location Factors and Spatial Relationships;112 13.1.2;4.1.2 Building Factors;126 13.1.3;4.1.3 Equipment and Layout Factors of Office Space;135 13.1.4;4.1.4 Lease Factors;136 13.1.5;4.1.5 Market Situation and Bargaining Power;145 13.2;4.2 German Office Property Market;148 13.2.1;4.2.1 City Profile of Major Office Property Markets;148 13.2.2;4.2.2 Office Market Data and Research Situation;160 13.2.3;4.2.3 Legal and Economic Foundation of German Office Leases;162 13.3;4.3 Survey among German Real Estate Professionals;167 13.3.1;4.3.1 Methodology and Statistical Tests;167 13.3.2;4.3.2 Empirical Results;174 13.4;4.4 Implications for the Development of Hedonic Office Rent Indices;186 13.4.1;4.4.1 Selection of Variables;186 13.4.2;4.4.2 Location Delimitation of German Office Markets;187 13.5;4.5 Chapter Summary;188 14;5 Hedonic Analysis of German Office Rents;190 14.1;5.1 Data Source;190 14.1.1;5.1.1 Data Provider and Representativeness of Lease Contract Data;190 14.1.2;5.1.2 Representativeness of Lease Contract Data (Initial Dataset);192 14.1.3;5.1.3 Database Structure;193 14.2;5.2 Step 1A: Data Mining;195 14.2.1;5.2.1 Variable Selection (Initial Dataset to Working Dataset 1);196 14.2.2;5.2.2 Plausibility Checks and Data Transformation (Working Dataset 1 to Working Dataset 2);196 14.2.3;5.2.3 Descriptive Statistics of Working Dataset 2;204 14.3;5.3 Step 1B: Data Mining - Missing Value Analysis;207 14.3.1;5.3.1 Types of Missingness;208 14.3.2;5.3.2 Strategies for Handling Missing Data;210 14.3.3;5.3.3 Missing Value Analysis;217 14.3.4;5.3.4 Adopted Strategies for Handling Missing Data;219 14.4;5