Assessing the impacts of urban rail transit on local real estate markets using quasi-experimental comparisons

A number of studies have concluded that recent rail transit investments have impacted the form and land use character of American cities far less than their counterparts a century or so ago. This study compares a number of measures of market performance between office submarkets located at selected rail transit stations in Washington, DC and Atlanta, with otherwise similar office submarkets lacking transit service. Comparisons are made over the period between 1978 and 1989. Although there were notable exceptions, the research finds that office projects located at or near transit stations enjoyed a slight office rent premium over their freeway-oriented competitors. In addition, office projects near rail stations tended to be slightly larger, and lease up somewhat more rapidly than office projects at the nonrail control sites. Other comparisons of office market performance tended to be more equivocal. These results suggest that although rail transit service does generate some benefits for the owners of commercial properties near transit stations, such benefits tend to be quite small.