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Designer Buildings: Estimating the Economic Value of ‘Signature’ Architecture

Author

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  • Franz Fuerst
  • Patrick McAllister
  • Claudia B Murray

Abstract

This study investigates whether commercial offices designed by ‘signature architects’ in the United States achieve rental premiums compared with commercial offices designed by nonsignature architects. Focusing on buildings designed by winners of the Pritzker Prize and the Gold Medal awarded by the American Institute of Architects, we create a sample of commercial office buildings designed by signature architects, drawing on CoStar's comprehensive national database. We use a combination of hedonic regression model and a logit model to estimate the various price determinants. The results of the hedonic analysis suggest that, compared with buildings in the same submarket, office buildings designed by signature architects have rents that are 5%–7% higher, and sell for prices 17% higher. The results from the second-stage logit estimation suggest a rental premium of approximately 5% for signature architects in large architectural practices, while the sales-price premium identified in the first stage hedonic regression was not confirmed.

Suggested Citation

  • Franz Fuerst & Patrick McAllister & Claudia B Murray, 2011. "Designer Buildings: Estimating the Economic Value of ‘Signature’ Architecture," Environment and Planning A, , vol. 43(1), pages 166-184, January.
    • Handle: RePEc:sae:envira:v:43:y:2011:i:1:p:166-184
    DOI: 10.1068/a43270
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    3. Kholodilin, Konstantin A & Mense, Andreas & Michelsen, Claus, 2017. "The market value of energy efficiency in buildings and the mode of tenure," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 54(14), pages 3218-3238.
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    5. Aydin, Yusuf Cihat & Mirzaei, Parham A. & Akhavannasab, Sanam, 2019. "On the relationship between building energy efficiency, aesthetic features and marketability: Toward a novel policy for energy demand reduction," Energy Policy, Elsevier, vol. 128(C), pages 593-606.
    6. Liao, Wen-Chi & Jing, Kecen & Lee, Chaun Ying Rachel, 2022. "Economic return of architecture awards: Testing homebuyers’ motives for paying more," Regional Science and Urban Economics, Elsevier, vol. 93(C).
    7. Matt Patterson, 2012. "The Role of the Public Institution in Iconic Architectural Development," Urban Studies, Urban Studies Journal Limited, vol. 49(15), pages 3289-3305, November.
    8. Jason Barr & Jennifer Johnson, 2020. "Skyscrapers and the Happiness of Cities," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 46(2), pages 344-377, April.
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    10. Vogt, Christine A. & Andereck, Kathleen L. & Pham, Kim, 2020. "Designing for quality of life and sustainability," Annals of Tourism Research, Elsevier, vol. 83(C).

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