The location of commercial spaces in multistory buildings affects their values. We developed a three-level mixed-effects spatial hedonic model in which the nested structure of individual commercial units in multistory buildings is explicitly taken into account in the price determination process. The proposed modeling framework is intuitive and flexible from both substantive and technical perspectives, as evidenced by its diverse extensions to accommodate both the spatial autocorrelation and the complex heteroscedasticity inherent in property values. A unique data set based on the assessed values of commercial properties and officetels, collected by the National Tax Service of Korea in 2012, is merged with structural and location information on buildings for a case study. We found both the floor level and building effects are important factors when valuing commercial units in multistory buildings. We show that model fit is significantly affected if the spatial autocorrelation at the individual level is not included in hedonic price models.