Abstract
This paper estimates the value firms place on access to city centers and how this has changed with COVID-19. Pre-COVID, across 89 U.S. urban areas, commercial rent on newly executed long-term leases declines 2.3% per mile from the city center and increases 8.4% with a doubling of zipcode employment density. These relationships are stronger for large, dense “transit cities” that rely heavily on subway and light rail. Post-COVID, the commercial rent gradient falls by roughly 15% in transit cities, and the premium for proximity to transit stops also falls. We do not see a corresponding decline in the commercial rent gradient in more car-oriented cities, but for all cities the rent premium associated with employment density declines sharply following the COVID-19 shock.
Original language | English (US) |
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Article number | 103381 |
Journal | Journal of Urban Economics |
Volume | 127 |
DOIs | |
State | Published - Jan 2022 |
Keywords
- Agglomeration
- COVID-19
- Commercial real estate
- Urban spatial structure
ASJC Scopus subject areas
- Economics and Econometrics
- Urban Studies