This is the first book that looks at how offices and office
markets in cities have changed over the last 30 years. It
analyses the long-term trends and processes within office markets,
and the interaction with the spatial economy and the planning of
cities. It draws on examples around the world, and looking
forward at the future consequences of information communication
technologies and the sustainability agenda, it sets out the
challenges that now face investors.

The traditional business centres of cities are losing their
dominance to the brash new centres of the 1980s and 1990s, as the
concept of the central business district becomes more
diffuse. Edge cities, business space and office parks have
entered the vocabulary as offices have also decentralised.
The nature and pace of changes to office markets set within
evolving spatial structures of cities has had implications for
tenants and led to a demand for shorter leases. The
consequence is a rethink of the traditional perception of property
investment as a secure long term investment, and this is reflected
in reduced investment holding periods by financial
institutions.

Office Markets & Public Policy analyses these
processes and policy issues from an international perspective and
covers:

* A descriptive and theoretical base encompassing an historical
context, a review of the fundamentals of the demand for and supply
of the office market and offices as an investment. Embedded
within this section is a perspective on underlying forces
particularly the influence of technological change.

* A synthesis of our understanding of the spatial structure and
dynamics of local office markets at the city level.

* An assessment of the goals and influence of planning policies,
and the evaluation of policies designed toward the long term
sustainability of cities as services centres.

This goes beyond standard real estate and urban economics books
by assessing the changing shape of urban office markets within a
spatial theoretical and policy context. It will be a useful
advanced text for honours and postgraduate students of land
economy; land management; property and real estate; urban planning;
and urban studies. It will also be of interest to researchers,
property professionals, policy-makers and planning
practitioners.

Colin Jones is professor of Estate Management at Heriot-Watt University. He has published widely on spatial commercial, industrial and housing property markets, urban regeneration and the economics of housing policy.

This is the first book that looks at how offices and office markets in cities have changed over the last 30 years. It analyses the long-term trends and processes within office markets, and the interaction with the spatial economy and the planning of cities. It draws on examples around the world, and looking forward at the future consequences of information communication technologies and the sustainability agenda, it sets out the challenges that now face investors.

The traditional business centres of cities are losing their dominance to the brash new centres of the 1980s and 1990s, as the concept of the central business district becomes more diffuse. Edge cities, business space and office parks have entered the vocabulary as offices have also decentralised. The nature and pace of changes to office markets set within evolving spatial structures of cities has had implications for tenants and led to a demand for shorter leases. The consequence is a rethink of the traditional perception of property investment as a secure long term investment, and this is reflected in reduced investment holding periods by financial institutions.

Office Markets & Public Policy analyses these processes and policy issues from an international perspective and covers:

• A descriptive and theoretical base encompassing an historical context, a review of the fundamentals of the demand for and supply of the office market and offices as an investment. Embedded within this section is a perspective on underlying forces particularly the influence of technological change.
• A synthesis of our understanding of the spatial structure and dynamics of local office markets at the city level.
• An assessment of the goals and influence of planning policies, and the evaluation of policies designed toward the long term sustainability of cities as services centres.

This goes beyond standard real estate and urban economics books by assessing the changing shape of urban office markets within a spatial theoretical and policy context. It will be a useful advanced text for honours and postgraduate students of land economy; land management; property and real estate; urban planning; and urban studies. It will also be of interest to researchers, property professionals, policy-makers and planning practitioners.

Acknowledgements ix

Preface xi

1 Introduction 1

History of offices 2

City office markets 6

Overview of office market trends 19

Book structure 20

2 Market Fundamentals 25

Growth of services 26

New technology, new work and new offices 28

New specialist office forms 31

The office stock 31

Constraining influences on the office property market 33

Office market cycles 37

Repeating the 'mistakes' 42

Conclusions 44

3 Submarkets and the Changing Nature of the Traditional

Central Business District 47

Economics of cities and office location 48

The Central Business District and intra-urban rent structures 50

Office submarkets 55

Identifying submarkets 59

Changing submarkets and a polycentric office market 67

Summary 69

4 Decentralisation and Edge City Office Centres 73

The information age 74

The motor age and urban forms 75

Deconstructing agglomeration economies 78

Decentralisation processes 82

Suburban offices and edge cities 84

Spatial structure of urban office markets 87

Spatial pattern of rents 90

Congestion, decentralisation and public policy 92

Conclusions 95

5 Investment, Risk Premiums and Office Market Dynamics 97

Obsolescence of offices and depreciation 98

Institutional office investment trends in the UK since the 1980s 101

Investment in offices 102

Establishment of office parks as an investment class 104

Mixed-use development 108

Institutional investment and office cycles 113

Credit crunch, cycles and bubbles 118

Conclusions 121

6 Public Policy and Competitiveness 125

Offices, competitiveness and the urban economy 127

Overview of public policy 130

Competitiveness and property market constraints 132

Public policy and office location constraints 134

Logic of property-led local economic development policies 140

Sustainable markets 145

Case studies of public policy initiatives 148

Concluding comments 157

7 Green Offices, Office Markets and Sustainability 161

A sustainable city? 163

Offices and the environmental dimension 165

Tall office towers and the economic dimension 168

Greening the office stock 171

Arguments for paying higher rents for green offices 173

Green refurbishment of existing offices 177

Current and changing occupier attitudes 178

Towards a green office rental market 179

Green investment 188

Conclusions 189

8 Market Changes and Challenges 193

Evolving offices 194

Evolving office markets 196

Office market cycles, bubbles and globalisation 199…