A repeat sales index for office buildings in New York City, 1900-2000
Author(s)Templeton, Cesarina A. (Cesarina Antoinette), 1971-; Baranski, Mark S. 1966-
Massachusetts Institute of Technology. Dept. of Urban Studies and Planning.
William C. Wheaton.
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This paper comments on one of the real estate and financial world's most common adages: that real estate is a safe long-term investment that will perform equal to or exceed other common investments, particularly over long stretches of time. With data drawn from a wide range of primary and secondary sources, a repeat sales index of large (250,000+ square foot) commercial building sales in the Midtown and Downtown sub-markets of New York City is created to illustrate how these properties have performed as an inflation-adjusted investment from 1900 through 2000. It differs from other papers that focused on hedonic modeling of building attributes and locational characteristics or that created appraisal-, lease- or property-share returns indices. Although our findings were not statistically significant, appreciation is found to be rather flat over time, appreciating on average between 1/4 to 2/3 percent per year and mirrors the findings of Eichholtz 1997 and Eichholtz & Geltner 2002. This suggests that while commercial office properties may provide investment opportunities when purchased and sold at the right points in the cycle, it tends to under-perform other investment options when carried over time.
Thesis (S.M.)--Massachusetts Institute of Technology, Dept. of Urban Studies and Planning, 2002.Includes bibliographical references.
DepartmentMassachusetts Institute of Technology. Dept. of Urban Studies and Planning.
Massachusetts Institute of Technology
Urban Studies and Planning.