Flight to Quality? An Investigation of Changing Price Spreads in Commercial Real Estate Markets
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Publication Date
2015Journal Title
Studies in Economics and Finance
ISSN
1086-7376
Publisher
Emerald
Volume
32
Pages
2-16
Language
English
Type
Article
Metadata
Show full item recordCitation
Fuerst, F., McAllister, P., & Sivitanides, P. (2015). Flight to Quality? An Investigation of Changing Price Spreads in Commercial Real Estate Markets. Studies in Economics and Finance, 32 2-16. https://doi.org/10.1108/SEF-10-2013-0155
Abstract
This paper uses sales transaction data in order to examine whether flight from risk
phenomena took place in the US office market during the financial crisis of 2007-
2009. The effect of the crisis on the pricing of asset quality attributes is investigated.
Hedonic regression procedures are used to test the hypothesis that the spread between
the pricing of low quality and high quality characteristics increased during the crisis
period compared to the pre-crisis period. The results of the hedonic regression models
suggest that the price spread between Class A and other properties grew significantly
during the downturn.
Sponsorship
The authors wish to thank the CoStar Group for providing a large database of property transactions to enable this research. Franz Fuerst also wishes to acknowledge the generous support of the Cambridge University Land Society (CULS).
Identifiers
External DOI: https://doi.org/10.1108/SEF-10-2013-0155
This record's URL: https://www.repository.cam.ac.uk/handle/1810/247491
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