An Interactive Econometric Model to Evaluate Offices

Abstract

In this paper it is proposed a mass appraisal model aimed to evaluate the real estate property in the high tertiary sector offices market. This model consists in a set of integrated and interactive tools developed in order to support municipal power and private agent policies and decisions, as well as their implementation, and are actually being applied to the Oporto city (Portugal). This model has three main integrated components: for Porto city).A management information system that consists of two databases. The first one gathers information about three main issues: the physical and location features of the offices and their buildings, the economic and financial features of the high tertiary sector firms, and the costs of urbanization and construction according to location. The second consists in information about different urban indicators, referring to issues such as activities location, accessibility to the central business district, public investments in many different areas, number of people working in the high tertiary sector, and plans and regulations. A statistical econometric hedonic model was developed in order to allow the evaluation of offices real estate according to the information collected (determination of the expected selling price). The main factors that affect office price levels are identified and quantified.An interactive simulation and cartographic interface, implementedthrough geographic information systems immediately displays the effects of simulated alternative urban policies upon office price levels.