The avenue effect, landmark externalities, and cubic transformation: Manhattan office valuation
- Cite this article as:
- Shilton, L. & Zaccaria, A. J Real Estate Finan Econ (1994) 8: 151. doi:10.1007/BF01097035
A functional form for the valuation of office buildings is a third-order function that replicates the constrained cost function in which one of the inputs, land, is fixed. The third-order transformation improves a hedonic regression pricing model and reduces the autocorrelation. The presence of neighborhood landmarks, selected avenue address, and building size influence the office building value. The data set includes 103 midtown Manhattan office building sales transactions from 1980 to first quarter 1990.