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Environmental Risk Perceptions of Commercial and Industrial Real Estate Lenders

Author

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  • Thomas O. Jackson

    (Real Property Analytics, Inc., Bryan, TX)

Abstract

This study analyzes the risk perceptions of commercial and industrial mortgage lenders related toenvironmental contamination. Two research questions are addressed. The first is whether perceived risks vary with a property’s remediation/cleanup status. The second is whether market conditions have an intervening effect on environmental risk. An analysis of national lender survey data found significant differences in perceived risk before, during and after cleanup, with most lenders unwilling to make a loan before cleanup and a majority willing to loan at typical rates and terms after cleanup. The study also found that strong market demand significantly reduces risk while weak demand increases risk.

Suggested Citation

  • Thomas O. Jackson, 2001. "Environmental Risk Perceptions of Commercial and Industrial Real Estate Lenders," Journal of Real Estate Research, American Real Estate Society, vol. 22(3), pages 271-288.
    • Handle: RePEc:jre:issued:v:22:n:3:2001:p:271-288
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    Citations

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    Cited by:

    1. Xu, Minhong & Xu, Yilan, 2017. "Environmental Hazards and Mortgage Credit Risk: Evidence from Texas Pipeline Incidents," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258019, Agricultural and Applied Economics Association.
    2. Robert A. Simons & Ron Throupe, 2012. "Debundling Property Rights for Contaminated Properties: Valuing the Opportunity Cost of the Right to Sell, Using Cumulative Options," International Real Estate Review, Global Social Science Institute, vol. 15(2), pages 231-252.
    3. Minhong Xu & Yilan Xu, 2020. "Environmental Hazards and Mortgage Credit Risk: Evidence from Texas Pipeline Incidents," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 48(4), pages 1096-1135, December.
    4. Robert A. Simons & Jesse Saginor, 2010. "Determining Off-Site Damages to Non-Residential Property from Leaking Underground Storage Tanks Using Contingent Valuation Analysis," International Real Estate Review, Global Social Science Institute, vol. 13(2), pages 134-156.
    5. Lucia Gibilaro & Gianluca Mattarocci, 2016. "Are Real Estate Banks More Affected by Real Estate Market Dynamics?," International Real Estate Review, Global Social Science Institute, vol. 19(2), pages 151-170.
    6. Sandy Bond & Sofia Dermisi, 2014. "Using GIS to Measure the Impact of the Canterbury earthquakes on House Prices in Christchurch, NZ," LARES lares_2014_923-1215-1-dr, Latin American Real Estate Society (LARES).
    7. Tahsin, Salman, 2022. "Home price growth and minority access to mortgage credit," Journal of Economics and Business, Elsevier, vol. 120(C).

    More about this item

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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