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A Note on Commercial Mortgage Flows and Construction

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Abstract

This note presents a model of commercial construction activity that incorporates the availability of mortgage funds as well as the mortgage rate. Empirical tests show that mortgage availability is an important determinant of construction. The model is used to indicate that the flood of mortgage capital in the late 1980s contributed to a real estate "bubble" that produced nearly a billion square feet of excess space.

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  • S. Michael Giliberto, 1992. "A Note on Commercial Mortgage Flows and Construction," Journal of Real Estate Research, American Real Estate Society, vol. 7(4), pages 485-492.
    • Handle: RePEc:jre:issued:v:7:n:4:1992:p:485-492
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    References listed on IDEAS

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    1. William C. Wheaton, 1987. "The Cyclic Behavior of the National Office Market," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 15(4), pages 281-299, December.
    2. David Hartzell & John S. Hekman & Mike E. Miles, 1987. "Real Estate Returns and Inflation," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 15(1), pages 617-637, March.
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    Cited by:

    1. Ron Donohue & Patric H. Hendershott, 2004. "Fund Flows and Commercial Real Estate Investment: Evidence from the Commercial Mortgage Market," Journal of Real Estate Research, American Real Estate Society, vol. 26(4), pages 417-442.
    2. Stanley D. Smith & Larry R. Woodward, 1996. "The Effect of the Tax Reform Act of 1986 and Regional Economies on Apartment Values," Journal of Real Estate Research, American Real Estate Society, vol. 11(3), pages 259-276.
    3. Stanley D. Smith & Larry R. Woodward & Craig T. Schulman, 2000. "The Effect of the Tax Reform Act of 1986 and Overbuilt Markets on Commercial Office Property Values," Journal of Real Estate Research, American Real Estate Society, vol. 19(3), pages 301-320.

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    JEL classification:

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

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