172 research outputs found

    Local Economic Development Incentives in New York City

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    This report provides the first systematic and comprehensive analysis of datasets on economic development incentives in New York City over the last fifteen years

    Predictable or Not? Forecasting Office Markets with a Simultaneous Equation Approach

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    The main objective of this paper is to elucidate the capability of time-series regression models to capture and forecast movements in occupancy patterns, rental rates and construction activity. The model presented is a three-stage simultaneous equation model. The first stage incorporates the office space market in terms of occupied space and absorption of new space. The second stage captures the adjustment of office rents to changing market conditions and the third stage specifies the supply response to market signals in terms of construction of new office space. The standard simultaneous model is subsequently modified to account for the specific characteristics using the New York market as a case study. The results demonstrate that the market reacts efficiently and predictably to changes in market conditions. The significance of the estimated parameters underscores the general validity and robustness of the simultaneous equation approach in modeling real estate markets. The modifications of the standard model, notably the inclusion of sublet space in the rent equation, contributed considerably to improving the explanatory power of the model. Finally, we test whether a non-linear function performs better than the original linear approach and find mixed evidence based on the limited empirical dataset of this study.forecasting; real estate; office markets; dynamic models; simultaneous equation approach; multivariate regression models;

    The Aftermath of the 9/11 Attack in the New York City Office Market: A Review of Key Figures and Developments

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    Although almost eight years have passed since the terrorist attacks of September 11, 2001, researchers continue to investigate the consequences of this far-reaching event in a variety of scientific disciplines and subject areas. In economic research, a number of more recent publications have added to existing body of literature by elucidating the medium- and long-term impact of the attacks using new methods and/or data. This paper is more modest in scope in that it reviews the impact of the attacks on the Manhattan's office inventory, employment and rents. Overall, there is scant evidence that the attack have had a long-lasting impact on the Manhattan office market. Of the companies that decided not to return to Lower Manhattan after 9/11, the majority relocated to Midtown Manhattan. Taken together, the core markets of Midtown and Downtown Manhattan captured about 80 percent of the stream of displaced tenants after 9/11, while areas outside of these two core clusters captured only 20 percent, which bodes well for Manhattan's ability to remain a prime office location even in the face of a severe crisis. Moreover, the set of so-called "trophy" buildings proved to be less affected by the recession than the general market, a finding that runs counter to initial assumptions about the future of office high-rises. In addition to a drastic reduction in leased space, accommodation of displaced tenants within the existing office space portfolio of large companies contributed further to lower occupancy rates than had been expected after the destruction of 10 percent of the inventory. This phenomenon, also known as backfill, caused overall absorption to be negative in the quarters following 9/11, since the positive demand created by displaced tenants was more than offset by losses incurred in the accelerated recession.Economics of commercial real estate, September 11 attacks, New York real estate market

    Spatial Patterns of Office Employment in the New York Region

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    This study analyzes the regional spatial dynamics of the New York region for a period of roughly twenty years and places the effects of the 9/11 terrorist attacks in the context of longer-term regional dynamics. The analysis reveals that office-using industries are still heavily concentrated in Manhattan despite ongoing decentralization in many of these industries over the last twenty years. Financial services tend to be highly concentrated in Manhattan whereas administrative and support services are the least concentrated of the six major office-using industry groups. Although office employment has been by and large stagnant in Manhattan for at least two decades, growth of output per worker has outpaced the CMSA as well as the national average. This productivity differential is mainly attributable to competitive advantages of office-using industries in Manhattan and not to differences in industry composition. Finally, the zip-code level analysis of the Manhattan core area yielded further evidence of the existence of significant spillover effects at the small-scale level.agglomeration economies, office employment, spatial concentration measures, employment data, industry composition urban economics

    Exogenous shocks and real estate rental markets: An event study of the 9/11 attacks and their impact on the New York office market

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

    Green noise or green value? Measuring the price effects of environmental certification in commercial buildings

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    This paper investigates the price effects of environmental certification on commercial real estate assets. It is argued that there are likely to be three main drivers of price differences between certified and non-certified buildings. First, certified buildings offer a bundle of benefits to occupiers relating to business productivity, image and occupancy costs. Second, due to these occupier benefits, certified buildings can result in higher rents and lower holding costs for investors. Third, certified buildings may require a lower risk premium. Drawing upon the CoStar database of US commercial real estate assets, hedonic regression analysis is used to measure the effect of certification on both rent and price. We first estimate the rental regression for a sample of 110 LEED and 433 Energy Star as well as several thousand benchmark buildings to compare the sample to. The results suggest that, compared to buildings in the same metropolitan region, certified buildings have a rental premium and that the more highly rated that buildings are in terms of their environmental impact, the greater the rental premium. Furthermore, based on a sample of transaction prices for 292 Energy Star and 30 LEED-certified buildings, we find price premia of 10% and 31% respectively compared to non-certified buildings in the same metropolitan are