Download this Paper Open PDF in Browser

Exogenous Shocks and Real Estate Rental Markets: An Event Study of the 9/11 Attacks and their Impact on the New York Office Market

22 Pages Posted: 15 Sep 2005  

Franz Fuerst

University of Cambridge - Department of Land Economy; University of Melbourne; City University of New York - Center for Urban Research

Date Written: September 7, 2005

Abstract

Any attempt to measure the impact of the 9/11 attacks is faced with the difficulty of separating the effects of the attacks from the impact of a wider economic recession and other simultaneous events. This study attempts to isolate the effect on New York office rental and vacancy rates by applying an event study methodology. The results support the hypothesis of significant effects of the September 11 attacks in the New York office market. These effects seem to be limited, however, in terms of their spatial and temporal impact. While the New York office market as a whole has demonstrated remarkable resiliency in the wake of the attack, the downtown market and particularly the World Trade Center submarket have been affected more clearly. Measured three years after the attack, however, cumulative abnormal changes in vacancy rates are moderate in the downtown submarket, indicating a much weaker medium-term impact of the attack than expected in its aftermath.

Keywords: office rental market, real estate, 9/11, terrorist attacks, impact, World Trade Center, New York, event study, abnormal returns, vacancy rates

JEL Classification: R33, G14

Suggested Citation

Fuerst, Franz, Exogenous Shocks and Real Estate Rental Markets: An Event Study of the 9/11 Attacks and their Impact on the New York Office Market (September 7, 2005). Available at SSRN: https://ssrn.com/abstract=800006 or http://dx.doi.org/10.2139/ssrn.800006

Franz Fuerst (Contact Author)

University of Cambridge - Department of Land Economy ( email )

19 Silver Street
Cambridge, CB3 9EP
United Kingdom

HOME PAGE: http://www.landecon.cam.ac.uk/directory/dr-franz-fuerst

University of Melbourne ( email )

185 Pelham Street, Carlton, Victoria 3053
Melbourne, Victoria 3010
Australia

City University of New York - Center for Urban Research

CUNY The Graduate Center
New York, NY 10011
United States

Paper statistics

Downloads
412
Rank
58,297
Abstract Views
7,123