Task 2: First short writing assignment (10-15 minutes)
9/11 and the market for Manhattan office space
On September 11, 2001 (9/11), 13.4 million square feet (MSF) of Class A office property in New York City was destroyed and another 14.4 MSF damaged. This was more than the total vacant space in an already tight New York City office market. Immediately, a number of property analysts suggested that this reduction in supply would create an even tighter office market. It is easy to speculate that a reduction in supply with only a small reduction in demand should result in lower vacancies.
Miller, N.G., Markosyan, S., Florance, A., Stevenson, B., & Op’t Veld, H. (2003). The 9/11/2001 Impact on Trophy and Tall Office Property. Journal of Real Estate Portfolio Management, 9, 2: 107-125. Retrieved 18 October 2006 from: http://cbeweb-1.fullerton.edu/finance/jrepm/pdf/vol09n02/02.107_126.pdf
One of the most dramatic and surprising outcomes of the attack was on Manhattan’s (and the metropolitan area’s) office market. Demand for office space had been weakening and vacancy rates rising prior to the attack. After the attack, with an estimated 3 percent of Manhattan’s office space destroyed and another 3 percent rendered temporarily unusable, it was widely expected that a severe shortage of space would push down vacancy rates and cause a sharp spike in rents.
Bram, J., Orr, J., & Rapaport, C. (2002). Measuring the Effects of the September 11 Attack on New York City. FRBNY Economic Policy Review (November 2002): 5-20. Retrieved 18 October 2006 from: http://www.newyorkfed.org/research/epr/02v08n2/0211rapa.pdf
Discuss the short-run effects of the 9/11 attack on the market for Manhattan office space – reconciling educated predictions and facts.
Criteria: length ca. 500 words. So think carefully about what you can say.
Layout: check that your paper meets the formal requirements for the Faculty (e.g. cover page plus title, name etc., margins,...