ABSTRACT
This is the first chapter of Part E, which focuses on the analysis of commercial office markets. The purpose of this chapter is to first discuss the idiosyncrasies and economic fundamentals of office markets and then provide an overview of the major steps involved in analyzing them. Within this context, we first discuss the determinants of office project success within the context of the idiosyncrasies characterizing the marketplace for office space and, especially, its cyclical nature. We then elaborate on the demand and supply fundamentals of such a marketplace. On the demand side, the discussion focuses on the nature of the office-using employment sectors and the major determinants of demand for office space. On the supply side, the discussion focuses on the determinants of office construction investment, and specifically on income-related factors, cost-related factors, and the availability of capital. We conclude the chapter with a brief overview of the market analysis process, as an introduction to Chapters 15 and 16. These two chapters elaborate on the macroeconomic and microeconomic aspects of market research, as they pertain to office development projects.
