What is the value of architectural design on office building income? This empirical study of 296 office building located in 11 Metropolitan Statistical Areas (MSA) hopes to quantitatively determine if a plain vanilla cereal box suburban office building commands more or less net operating income than an office building with a higher level of design. Previous empirical studies have found a strong influence of design on rents but were limited in geography, building characteristics and total number of observations. In an important study by Vandell and Lane (1990), they found that good architecture commanded a premium of over 20% in office rents. Also, their study showed that good design cost more to produce on average, but not necessarily in every case. Data was gathered from a portfolio of US office buildings and consisted of building metrics and property level 2000-2005 Net Operating Income (NOI). This base data set, MSA dummy variables and architectural attribute dummy variables (created by the authors) formed the backbone of the research. Multiple log linear regression analysis was conducted to identify the economic effects of good design.
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