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Abstract
Executive Summary. An equilibrium model of a commercial real estate market is proposed for pedagogical and research purposes. A long-run equilibrium vacancy rate (“natural” vacancy rate) is determined along with rent and quantity of space. The model is shown to be consistent with one of the models of search in real estate markets that has been proposed to explain the existence of a natural vacancy rate. Previous empirical studies of rent and vacancy in commercial real estate markets are reviewed from the perspective of the model.