In multi-tenant office buildings, rental rates are determined by which factor?

• A. The age of the building
• B. The location of space in the building
• C. The occupancy rate
• D. The tenant credit quality

Answer: (B)

In a multi-tenant office building, the rent for a given space is driven by where that space is located inside the building. Spaces with better access to daylight, views, corners, proximity to the elevator bank, restrooms, and the lobby are more desirable, so they command higher rents. Interior or less convenient locations tend to rent for less. While factors like the building’s age, overall occupancy level, or the credit quality of a tenant can influence market conditions or lease terms across properties, the specific rental rate for a particular space in a building is primarily determined by its location within the building.