Rental Concessions and Property Values

Abstract

This paper examines apartment rental concessions and their effect on property values through apartment rent and occupancy rates. A simultaneous equation model is used to estimate rent and occupancy equations in linear, semilog and logged form. The results show that rental concessions have a positive effect on both rent and occupancy rates. This would indicate that concessions have a positive effect on property values since higher capitalized value should follow. The results also reveal that various amenities and services provided by apartment units have significant effects on rent.