The Journal of Real Estate Finance and Economics

, Volume 46, Issue 2, pp 260–281 | Cite as

Estimating Transaction-Based Price Indices of Local Commercial Real Estate Markets Using Public Assessment Data

  • Dean Gatzlaff
  • Cynthia Holmes


This study examines the feasibility of constructing reliable commercial property price indices using property tax records. We employ the Clapp and Giacotto (Journal of American Statistical Association, 87(418), 300–306, 1992) assessed-value method to estimate price indices for commercial properties in Florida. The estimated Florida commercial property price index is compared to the Moody’s/REAL Commercial Property Price Index (CPPI) and to the transaction-based index (TBI) produced at MIT. Our results are promising, suggesting that this widely-available data source can be used to produce commercial property price indices for a variety of precise market locations and specific investor segments. A secondary but interesting objective of this paper is to use our rich and comprehensive database to examine the price performance of two specific subsets of properties in more detail. First, we narrow our range to focus on just the office sector for Florida. We compare price movements for the Florida office sector with the comparable CPPI. Estimates produce very similar price movements providing support to both methods. Second, we contrast the price performance of higher- and lower-valued properties and reject the hypothesis that their periodic price index levels are equal. The mean price changes of Florida commercial properties assessed at $2.5 million and above are observed to be slightly higher than for properties assessed below $2.5 million, although not statistically different. In particular, higher-valued properties had higher mean price changes relative to lower-valued properties during periods of economic expansion. This economic difference represents an important contribution toward beginning to understand the relative performance of smaller and investment-grade commercial properties.


Commercial property prices Repeat-sales indices Assessed-value indices 



We are grateful for the comments from participants at the 2010 MNM Symposium in Boston, MA. In particular, we thank John Clapp and Jeffrey Fisher for their insights, and David Geltner, our MNM symposium discussant, for his detailed suggestions and estimates of the Florida-specific CPPI used in this paper. In addition, we acknowledge the Real Estate Research Institute and the Kislak Family Fund for their support of this work.


  1. Bokhari, S., & Geltner, D. (forthcoming, 2011). “Estimating Real Estate Price Movements for High Frequency Tradable Indexes in a Scarce Data Environment,” Journal of Real Estate Finance and Economics.Google Scholar
  2. Clapp, J. M., & Giaccotto, C. (1992). Estimating price indices for residential property: a comparison of repeat sales and assessed value methods. Journal of American Statistical Association, 87(418), 300–306.CrossRefGoogle Scholar
  3. Fisher, J., Geltner, D., Gatzlaff, D., & Haurin, D. (2003). Controlling for the impact of variable liquidity in commercial real estate price indices. Real Estate Economics, 31(2), 269–303.CrossRefGoogle Scholar
  4. Fisher, J., Geltner, D., & Pollakowski, H. (2007). A quarterly transactions-based index of institutional real estate investment performance and movements in supply and demand. Journal of Real Estate Finance and Economics, 34(1), 5–33.CrossRefGoogle Scholar
  5. Gatzlaff, D., & Geltner, D. (1998). A transaction-based index of commercial property and its comparison to the NCREIF index. Real Estate Finance, 15, 7–22.Google Scholar
  6. Gatzlaff, D., & Ling, D. (1994). Measuring changes in local house prices: an empirical investigation of alternative methodologies. Journal of Urban Economics, 35, 221–244.CrossRefGoogle Scholar
  7. Geltner, D., & Goetzmann, W. (2000). Two decades of commercial property returns: a repeated-measures regression-based version of the NCREIF index. Journal of Real Estate Finance and Economics, 21(1), 5–21.CrossRefGoogle Scholar
  8. Ziering, B., & McIntosh, W. (1999). Property size and risk: why bigger is not always better. Journal of Real Estate Portfolio Management, 5(2), 105–112.Google Scholar

Copyright information

© Springer Science+Business Media, LLC 2011

Authors and Affiliations

  1. 1.Center for Real Estate Education & Research, College of BusinessFlorida State UniversityTallahasseeUSA
  2. 2.Department of Finance, Ted Rogers School of ManagementRyerson UniversityTorontoCanada

Personalised recommendations