This paper investigates the impact of vertical location and tenant sorting on commercial office rents within the tall office towers of Amsterdam. In economic geography and urban economics' approach to productivity tall buildings constitute an important, density-increasing typology that fosters agglomeration. Through econometric modelling of 627 office rent transactions in 33 tall office buildings in Amsterdam rented during the period 2000-2016, this paper provides empirical evidence to the growing body of knowledge on the economics of height. This paper is the first to decompose the vertical rent premium whereby 27% is related to view, 3% to industry-level differences and the remaining 70% to firm-level signalling and other factors. The results indicate positive rent premiums for higher floor locations consistent across a wide range of specifications, strong premiums associated with the top output-per-job industry sectors and a weak presence of vertical sorting. Additional sorting evidence shows clear differences among industry sectors for height preference (law firms and consultancy & management practices), or lack of it despite high productivity (ICT sector). Relative price differentials for view and status were consistent across the various industry sectors with the exception of insurance carriers who seem to prefer status over the view aspect of height. The good performance of the OLS model with submarket fixed effects indicates the strong delineation of office submarkets in Amsterdam.
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