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This project is about analysis of commercial properties with some other factors.

Commercial properties are real estate intended for use by for-profit businesses, such as office

complexes, shopping malls, service stations and restaurants. Commercial property may be

purchased outright by a developer for future projects or leased through a broker.

Commercial property falls somewhere between residential and industrial property.

Practically every incorporated city uses a zoning system to regulate the use of

property within its jurisdiction. In order to grant permission to build a new office complex or

other profit-making business, the city government must determine that the chosen area is

indeed commercial property. The zones which separate industrial, residential

and commercial property are clearly marked on city maps. If the proposed business is clearly

in an area zoned for commercial use, then the city will allow the sale to proceed for the stated

use. If any part of the commercial property extends into a residential or industrial zone,

however, then the buyer must seek a 'variance', special permission to cross over a zone

boundary.

A commercial real estate company evaluates the vacancy rates, square footage, rental

rates, and operating expenses for commercial properties in a large metropolitan area in order

to provide clients with quantitative information upon which to make rental decisions. The

data below are taken from 81 suburban commercial properties that are the newest, best

located, most attractive, and expensive for five specific geographic areas, but only 2 data are

used in this experiment.

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1)? To determine the relationship between rental rates and age of the commercial

properties, operating expenses and taxes also the total footage square.

2)? To find if there is any problems exist in this analysis

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èost existing observed studies identify a cost premium associated with

LEED-rated new buildings and that the higher rated buildings tend to have a higher cost

premium (for example èorrison Hershfi eld, 2005). However, the cost premium is typically

found to be relatively low ranging from 2 per cent to 10 per cent depending on the level of

rating. In return, a range of benefits are attributed to green buildings or associated with

features common in green buildings: reduced operating costs, improved productivity,

improved image for occupiers and owners and reduced operating and regulatory risks.

Although it is undeniable that some attributes of buildings have clear effects on their market

price, it is not always clear that increased cost due to higher specification leads to increased

value.

A historic 186,000-square-foot commercial building with choice èississippi River

views is available for free to a willing 501(c) 3 non-profit organization, but it could prove to

be a difficult transaction. The former Nylon Net building at 7 Vance is on the Center City

Commission¶s list of Downtown¶s top 10 redevelopment sites. ³The building became a

liability and the preference would be that the historic building be preserved and a good use

made for it, but their No. 1 priority is to offload it,´ Kirkscey says. Donating such a large

commercial property is fairly rare. Gifts to non-profit organizations are usually cash,

followed by stocks and bonds and then tangible personal property such as artwork. When it

comes to real estate donation, raw land is usually preferred because there are no structures on

the property. ³When you get into gifts of commercial property, just in the scale of how many

times this happens, it¶s pretty infrequent,´ Converse says. ³You¶ve got to have a special use.´
 YK house prices up 91% in the past decade. YK house prices have risen by 91% over

the past ten years, according to new research by Halifax. Based on Halifax's own data, the

national average price rose by over £78,000 (91%) from £86,095 in late 2000 to £164,310 at

the end of 2010. The current housing market cycle saw the average house price in the YK

increase by 132% between 2000Q4 and the recent market peak of £199,766 in 2007Q3. This

was followed by a 21% drop to £157,767 in 2009 quarter 2. As the market has stabilised

prices have subsequently increased by 4% to £164,310 at the end of 2010, a level similar to

the end of 2005. As a result, the average house price in the regions across the South

(£206,091) is now 56% higher than in the North (£132,163). Ten years ago prices in the

South were, on average 80% higher than in the North.

Website: http://www.lloydsbankinggroup.com/media.asp

The property price statistics bring together data from different countries. The BIS,

with the assistance of its member central banks, 1 has obtained approval of various national

data providers to disseminate the statistics as long as the national sources are clearly

indicated. The sources and any relevant disclaimers are listed separately. Copyright in these

data must be honoured.

The property price statistics currently include data from 40 countries, and are

available at different frequencies. The data differ significantly from country to country, for

instance in terms of sources of information on prices, type of property, area covered, property

vintage, priced unit, detailed compilation methods and seasonal adjustment. This reflects two

facts. Firstly, that the processes associated with buying and selling a property and hence data

available, vary between countries and secondly, that there are currently no specific

international standards for property price statistics. However, Eurostat is taking the lead in
drafting a Handbook on Residential Property Price Indices under the aegis of the Inter-

Secretariat Working Group on Price Statistics. This handbook will give recommendations on

best practice for compiling residential property price indices and will present these in the

context of the different user needs for such indices.

Website: property.prices@bis.org.

Lorenzo Cotula and Sonja Vermeulen examine the extent to which local people have

control over the land allocation processes which have such enormous impacts on their

livelihoods and cultures. They examine the procedural issues of consultation and consent, to

examine how accountable current processes are to differentiated local interests, and at the

distributive issues around compensation.

Conventional guides present certain rules about the layout and buildings in small

towns, whereas next-generation guides concentrate on diverse scales of size, ranging from

districts to small- and medium-sized walkable towns. K Conventional guides embrace zoning,

suburban layout and car-based access; while nextgeneration guides promote mixed use and

compact layouts, including pedestrian priority. K Conventional guides analyze fac¸ades of

new buildings from an aesthetic perspective, whereas next-generation guides consider

functionality, energy efficiency and recommend ecotechnologies for new buildings. These

may have impacts on scale, height, form and fac¸ade depending on the specific climatic

regions.

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>
0 +
1 X1+
2X2+
3 X3+

Where
Y Rental rates

X1 Age of the properties

X2 Operating expenses and taxes

X3 Total square footage

From table 1 , the regression function for this model is

Y -738070.697+54572.639X 1+13587.806X2+127601.510X 3

Interpretations:

The value of rental rates (-738070.967) will take if age of the commercial properties,

operating expenses and taxes, and total square footage is zero. As age of the commercial

decrease by 1 year, the rental rates of the commercial properties will be increase by

54572.639 units. As operating expenses and taxes decrease by Rè1, the rates of the

commercial properties will increase by 13587.806 units. Increases the total square footage by

1 foot square, the rental rates of the commercial properties by 127601.51 unit



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Correlation coefficient measures the strength and direction of a linear relationship

between two variables. R 0.816, there is strong positive linear relationship between rental
rates and the age of the commercial properties, operating expenses and taxes, and total square

footage.


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Coefficients of determination measures the variation of the dependent variable that

explained by the regression line and the independent variable. r 2 0.665, 66.5% of the

variation in the rental rates can be attributed to the variation in the age of the commercial

properties, operating expenses and taxes, and total square footage.


 




F-test is used to test whether the independent variable as a group is significant or not in

determining the dependent variable.

H0 :
1
2
3 0

H1 : At least one
k is not equal to zero(k 1,2,3)

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Test statistic

F èSR

èSE

Fcalc 10.601

F FĮ,(p-1),(n-p)

F0.05,3,19

3.10

Decision rule: If Fc>3.10, reject H0

Decision: Reject H0

Conclusion: This multiple linear regression for this model is

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T-test is used to determine if there exist a significant relationship between dependent and all

the independent variables.

H0:
k 0 (k 1, 2, 3)

H1: Not all
k (k 1, 2, 3) equal to zero

*using p-value approach

Decision rule: Reject H0 if p-value<0.05

Decision: From table, since p-value of age of commercial properties, x1 and operating

expenses and taxes, x2 is less than 0.05, reject H0.

Since p-value of total square footage is greater 0.05, do not reject H0

Conclusion: therefore, only age of commercial properties, x1 and operating expenses and

taxes, x2 are significant. Thus, there is significant linear relationship between rental rates with

age of commercial properties and operating expenses and taxes.

The conclusion from this test is the rental rates are depending on age of commercial

properties and operating expenses and taxes.

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èulticollinearity violates the assumption that none of the independent variables have

a linear relationship. This means that one of the independent variables is a linear function

of at least one other independent variable. èulticollinearity can be detected by using

Variance Inflation Factor (VIF). If VIF greater than 5, serious multicollinearity problem

exist. From table 1??the value of VIF is less than 5, this shows that the multicollinearity

does not exist. ?

2)? Autocorrelation

Autocorrelation violates the assumption that conserved errors are independent of each

other (not correlated with each other). Durbin-Watson statistic has a range from 0 to 4, and

the closer it is to 2, the less chance there is autocorrelation.

H0: ȡ 0(no autocorrelation problem)

H1: ȡ>0(there is positive serial autocorrelation)

Durbin-Watson test statistic:

From table 2,

D 1.411

Decision rule: Since D closer to 2, there is no autocorrelation problem exists.

3)? Heteroscedasticity

Heteroscedasticity violates the assumption that the error term has a constant variance.

From the figure 1 shows that there is no heteroscedasticity problem occurs since it shows

there is no specific pattern and the variance is constant. Figure 2 shows that there is negative

positive linear relationship between age of commercial expenses and operating expenses and

taxes.


c 

From table 1, it shows that total square footage, x3 did not significant. Therefore we

need to drop the variables so that its correlation coefficient will increase. It shows that there

is no relationship between rental rates and total square footage.

From figure 2, it shows that there is a positive linear relationship between age and

taxes. Therefore we need to drop one of the variables.

CONCLYSION

This paper attempts to investigate the relationship between the rental rates and age of

the commercial properties, operating expenses and taxes, and total square footage. From the

analysis, it shows that there is no relationship between rental rates and total square footage.

Therefore, rental rates are depending on age of the commercial properties and operating

expenses and taxes. There are no problems of multicollinearity, autocorrelation and

heteroscedasticity problem.
==
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Table 1: t-test statistic, VIF value and the regression function value

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Table 3: F-test value

Figure 1: Scatter plot

Figure 2: Scatter plot matrix