IDEAS home Printed from https://ideas.repec.org/a/jre/issued/v17n11999p3-32.html
   My bibliography  Save this article

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

Author

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.

Suggested Citation

  • Mark Gallagher & Antony P. Wood, 1999. "Fear of Overbuilding in the Office Sector: How Real is the Risk and Can We Predict It?," Journal of Real Estate Research, American Real Estate Society, vol. 17(1), pages 3-32.
  • Handle: RePEc:jre:issued:v:17:n:1:1999:p:3-32
    as

    Download full text from publisher

    File URL: http://pages.jh.edu/jrer/papers/pdf/past/vol17n01/v17p003.pdf
    File Function: Full text
    Download Restriction: no

    References listed on IDEAS

    as
    1. John Benjamin & G. Donald Jud & Daniel T. Winkler, 1998. "The Supply Adjustment Process in Retail Space Markets," Journal of Real Estate Research, American Real Estate Society, vol. 15(3), pages 297-308.
    2. Amemiya, Takeshi, 1981. "Qualitative Response Models: A Survey," Journal of Economic Literature, American Economic Association, vol. 19(4), pages 1483-1536, December.
    3. Jacques Gordon & Paige MosbaughTodd Canter & Todd Canter, 1996. "Integrating Regional Economic Indicators with the Real Estate Cycle," Journal of Real Estate Research, American Real Estate Society, vol. 12(3), pages 469-501.
    4. Grenadier, Steven R, 1995. "The Persistence of Real Estate Cycles," The Journal of Real Estate Finance and Economics, Springer, vol. 10(2), pages 95-119, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Stephen A. Pyhrr & Stephen E. Roulac & Waldo L. Born, 1999. "Real Estate Cycles and Their Strategic Implications for Investors and Portfolio Managers in the Global Economy," Journal of Real Estate Research, American Real Estate Society, vol. 18(1), pages 7-68.

    More about this item

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jre:issued:v:17:n:1:1999:p:3-32. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (JRER Graduate Assistant/Webmaster). General contact details of provider: http://www.aresnet.org/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.