Flight to Quality? An Investigation of the Attributes of Sold Properties in Hot and Cold Markets

Franz Fuerst, Pat McAllister () and Petros Sivitanides ()
Additional contact information
Pat McAllister: School of Real Estate & Planning, Henley Business School, University of Reading
Petros Sivitanides: Neapolis University

Real Estate & Planning Working Papers from Henley Business School, University of Reading

Abstract: This paper uses sales transaction data in order to examine whether flight from risk phenomena took place in the US office property investment market during the financial crisis of 2007-2009. The effect of the crisis on the pricing of property quality attributes, mainly summarized by the class category of each building, is investigated. In addition, the paper examines how turnover levels were affected by the market downturn and whether there were significant variations between different real estate quality types. The results of the hedonic regression models suggest that the price spread between property classes A, B and C grew significantly during the downturn. We also find that property attributes such as size, height and age are priced significantly different in 'hot' and 'cold' markets.

Keywords: Real estate cycles; risk-return relationship; investment (search for similar items in EconPapers)
JEL-codes: D4 D92 R33 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2011
New Economics Papers: this item is included in nep-ure
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Citations: View citations in EconPapers (1)

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