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The Role of Accommodation in Office Organization Locations: Consequences for Location Theory

By: Naveed Ahmad1
1Real state agent, Canada.

Abstract

Location factors are crucial in understanding the spatial distribution of economic activities and the selection of locations by companies. Essentially, location factors represent the spatial manifestation of the production factors a company needs. One such factor, accommodation, has often been overlooked, despite its significant relevance to location choice. The type and size of premises can impact a company’s productivity. Therefore, accommodation should be viewed as a cost item that varies by location. This article examines the role of accommodation in the search for a new office location. Our findings indicate that it plays a crucial role in this decision-making process, especially for companies looking to rent office space. This has implications for location theory, which typically assumes that companies will construct their own buildings. However, firms seeking rental office space are dependent on the available supply in the real estate market. We conclude that location theory does not adequately address the search for office space through the rental market or the issue of supply and demand mismatches.