SSRN-Fear of Overbuilding in the Office Sector: How Real is the Risk and Can We Predict It? by Mark Gallagher, Antony Wood

  Paper Stats:
   Abstract Views: 366
   Downloads: 0

Fear of Overbuilding in the Office Sector: How Real is the Risk and Can We Predict It?

MARK GALLAGHER
F.W. Dodge The McGraw-Hill Companies - Market Analysis Group
ANTONY P. WOOD
John Hancock Real Estate Investment Group - General

Journal of Real Estate Research, Vol. 17, Issue 1/2

Abstract:
After a prolonged hiatus following the boom of the 1980s, the pace of office construction has begun to increase, raising the specter of overbuilding in several metropolitan areas (MSAs). Research has shown that commercial property markets are prone to overbuilding, however, there is a dearth of research on construction cycles at the MSA level. This article examines three techniques that can be used to examine the probability of overbuilding within the office sector. Based on quarterly data from 1977-1997, this research concludes that both base employment and the Space Market Index provide the most practical methods for assessing the risk of overbuilding. There is considerable variation across MSAs in terms of the risk of overbuilding. This has important implications for real estate investors from a tactical asset allocation viewpoint.

JEL Classifications: R33

Accepted Paper Series

Contact Information for MARK GALLAGHER (Contact Author) Email address for MARK GALLAGHER F.W. Dodge The McGraw-Hill Companies - Market Analysis Group Lexington , MA 02173 United States 781-860-6286 (Phone) 781-860-6684 (Fax)
Contact Information for ANTONY P. WOOD Email address for ANTONY P. WOOD John Hancock Real Estate Investment Group - General John Hancock Place, T-53 200 Clarendon Street Boston , MA 02117 United States 617-572-4714 (Phone) 617-572-3860 (Fax)

Email Abstract or URL

SSRN Resources

To search for other abstracts in the SSRN archival database, click here.

To order a membership to an SSRN Network or to subscribe to one or more of SSRN's journals, go to our online subscription request form.

To go to SSRN's main web site (www.ssrn.com), click here.