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Medical Service Quality and Office Rent Premiums: Reputation Spillovers

June 1, 2022 - Goodman, C. Allen and Smith, C. Brent

Citation: Goodman, C. Allen and  Smith, C. Brent, “Medical Service Quality and Office Rent Premiums: Reputation Spillovers” The Journal of Real Estate Finance and Economics (2021)

Research Summary: 

Physicians and healthcare providers looking for medical office space may benefit from the reputation spillover of a nearby hospital known for its high-quality service. This study finds that office rental rates will be higher near hospitals with a reputation for high quality service because physicians are willing to pay a premium for the anticipated spillover of that reputation. Hospital proximity and reputation are both linked to a higher base rent over similar office space in the market.