Mixed-Use Price Premiums

By: Dr. Dominic F. Minadeo, Colliers Turley Martin Tucker

Release Date: April 2009

Mixed Use Price Premiums

This study of eight office markets in the Southeast and Midwest employed a hedonic pricing model to exact the rent premium associated with commercial buildings in mixed-use developments. The results uncovered the effect of a mixed-use development on rents for the final product, testing the question, "Does one square foot of office or retail in a mixed-use development garner higher rents per square foot than a comparable product in a single use development?" Thus, NAIOP members will be better able to gauge a building's relative competitiveness and more accurately estimate fair market rents. Furthermore, one ultimately hopes to determine if the price premium is adequate for overcoming higher construction costs and zoning hurdles often associated with mixed-use developments. Markets studied include:

  • Nashville
  • Dallas
  • Charlotte
  • Seattle
  • Indianapolis
  • Minnesota
  • Philadelphia
  • Phoenix