The Value of Royal Gold Gold Gold AWARDED ARCHITECTS Study Medal Medal Medal Architects who won the lifetime achievement awards ↓ and/or innovation awards Results Design in Organization Organization Organization RIBA AIA UIA Aldo Rossi 557 Broadway How often How often How often '90 When controlling for location and transaction 555 Broadway Real Estate Annual Annual Triennial time, building features and transaction First awarded First awarded First awarded features, the result of the hedonic analysis 1848 1907 1984 Alvar Alto 809 UN Plaza Award Criteria '63 suggests that buildings designed by awarded Development → From 1950 From 1950 From 1950 69 awarded 59 awarded 26 awarded architects/firms are transacted with a Jean Nouvel '01 '08 45-47 W 53rd St This study investigates the financial performance A total of 18 awarded architects/firms have 23.1% premium than buildings that are de- Golden Innovator National of awarded architectural design for commercial designed 56 buildings in Manhatta, and 89 César Pelli 3 World Financial Center signed by non-awarded architects. Lion Awards Desgin Award '95 office buildings in Manhattan, New York. transactions were observed. Within the 18 4 World Financial Center 900 3rd Avenue 35 firms, 4 firms have received more than 2 Organization Organization Organization NY Mercantile Exchange Venice WSJ Cooper Hewitt 32.1% *** awards from 3 award categories Biennale How often How often How often Annual Annual Norman Foster '83 '94 '99 610 Lexington Avenue Biennial First awarded First awarded 425 Park Avenue 30 First awarded 2010 2000 2000 From 1950 From 1950 Fumihiko Maki 51 Astor Place ↓ Control Group Data From 1950 7 awarded 26 awarded '11 '93 '93 12 awarded Mies van der Rohe '59 '60 Seagram Building In order to understand the effect of the 25 awarded architects and firms on the transac- Architecture Pritzker 23.1% *** Firm Award Prize Philip Johnson '78 '79 5 East 44th Street tion price, we matched each of the awarded Sony Plaza About the Project 20.9% *** Awarded design is based on the buildings in this sample to nearby commer- Organization Organization Lipstick Building achievement of the architect and/or AIA Pritzker the architecture firm receiving presti- cial buildings in the similar location using the How often Foundation 20 gious awards from the industry such Walter Gropius '56 '59 200 Park Avenue cONTROL GROUP DATA as the Pritzker prize, AIA Architecture Geographic Information System (GIS). Annual How often 17.7% * PROcESS, GIS Firm Award, the Architectural Innova- First awarded Annual tion Award of the Wall Street Journal to 1962 First awarded name just a few. To measure financial AWARDED ARCHITECTS & FIRMS From 1950 1978 performance, I use several datasets, Architects/firms who won both award groups Real Capital Analytics, Compstak, 55 awarded From 1950 15 Walkscore and NYC public data for 41 awarded New York City. To identify awarded Edward L. Barnes 499 Park Avenue design and compare it to non-awarded '07 '80 design, I employ a matched-pair anal- 7 Byant Park ysis. I find 846 building transactions AWARDED FIRMS with 89 awarded design transactions 10 that are matched geographically to Architecture firms who won the AIA Architecture Firm Award I.M.Pei '10 '14 '68 JP Morgan Chase HQ 757 nonawarded design transactions Deutsche Bank HQ within a quarter mile radius over the 31 West 52nd Street 2000 to 2017 period. The results of Davis Brody Bond 100 William '79 '83 '03 '75 750 Seventh Avenue the multivariate hedonic analysis sug- Five Manhattan West gest that, compared with buildings in the quartermile neighborhood, office 5 buildings designed by awarded archi- Kevin Roche 125 West 55th Street Gensler 233 Spring Street '93 '82 '74 tects and awarded architecture firms '00 Ave of Americas Plaza 161 6th Avenue have a statistically and economically 787 Seventh Avenue significant transaction premium of 23.1 percent, ceteris paribus, with a model that explains just under 90 KPF 745 7th Avenue '90 Skidmore Orell & 12 West 57th Street percent of the variation in transac- Five TIme Square '57 '83 '88 0 (%) tion price. Results of this analysis are Merril (SOM) Paine Webber Building One Vanderbilt intended as way for designers to have Marine Midland Bank 111 Murray Street '96 Awarded Awarded Awarded Awarded agency in the design build develop- Bertelsmann Building ment practice and for developers and 1100 6th Avenue Designs Architects Firms Architects 300 Madison Avenue investors to understand the value of 441 8th Avenue & Firms engaging in awarded design effects. 34-36 East 51st Street 10 Hudson Yards One Manhattan West Significance*** About the Lab Asterisks in a regression table indicate the level of the statistical significance of a The MIT Real Estate Innovation Lab is Two Manhattan West regression coefficient. an R&D lab at the MIT’s SA+P, Center Murphy / Jahn ‘05 425 Lexington Avenue 450 Lexington Avenue *** p<0.01, ** p<0.05, * p<0.1 for Real Estate that works with public 65 East 55th Street 461 5th Avenue and private data providers to link Coefficient % design and innovation to financial 510 5th Avenue The standard error is our estimate of the standard deviation of the coefficient. performance in the built environment. Worldwide Plaza Hugh Stubbins Citi Group Center '67 830 3rd Avenue NOTE: Support The regression model controls for location and transaction time, building features We are grateful for the support of our (age, number of floors, building area, land parcel area, building class, renovation, data providers, and in particular, the and walk score), and transaction features (buyer type, seller type, and lender type) founding lab partners.

THE VALUE OF DESIGN FALL 2018 The series of maps show the Building Designed by identify All Other Office Buildings location of the treated buildings, Create 0.25 Mile Radius quarter mile radius, and the Awarded Architect / Firm identification in Database within Radius filtered data points.

The Value of Awarded Design in Real Estate Development Control Group Data 47