Abstract

https://ssrn.com/abstract=158634
 


 



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


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 Classification: R33


Not Available For Download

Date posted: April 30, 1999  

Suggested Citation

Gallagher, Mark and Wood, Antony P., Fear of Overbuilding in the Office Sector: How Real is the Risk and Can We Predict It?. Journal of Real Estate Research, Vol. 17, Issue 1/2. Available at SSRN: https://ssrn.com/abstract=158634

Contact Information

Mark Gallagher (Contact Author)
F.W. Dodge The McGraw-Hill Companies - Market Analysis Group ( email )
Lexington, MA 02173
United States
781-860-6286 (Phone)
781-860-6684 (Fax)
Antony P. Wood
John Hancock Real Estate Investment Group ( email )
John Hancock Place, T-53
200 Clarendon Street
Boston, MA 02117
United States
617-572-4714 (Phone)
617-572-3860 (Fax)
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