This study examines the housing market impacts of the Obama Presidential Center (OPC) on Chicago's South Side during the pre-opening period (2013-2024). Using spatial hedonic difference-in-differences models, we analyze property sale prices across distance buffers surrounding Jackson Park to assess whether proximity to this high-profile anchor institution generated anticipatory price effects. Despite conditions typically associated with speculative appreciation, including extensive media coverage, documented investor activity, and expectations of neighborhood transformation, we find no statistically significant price increases in areas closest to the OPC (within 0-1.5 miles). Instead, significant appreciation emerges only at 1.5-2 miles from the site, where prices rose approximately 12 percent above market trends in 2023-2024. This counterintuitive spatial pattern challenges conventional proximity-based models of anchor institution effects. We explore potential explanations, including construction-related disruption, uneven policy coverage, forward-looking investor behavior, and pandemic-era market dynamics. Overall, the findings demonstrate that anticipatory price effects are conditional on local context rather than automatic responses to major developments.

The COVID-19 pandemic is evolving office building design and operation. Recent studies indicate that healthy building requirements, such as increased ventilation, higher air filtration, and temperature and humidity levels, could help mitigate the risk of airborne transmissions, such as COVID-19. As the risk of airborne diseases still exists, there is minimal information on the level current office building codes prevent or mitigate such risk. In response, this study aims to perform comparison of how building codes and rating tools recommend factors to mitigate airborne diseases. This study identified eight factors applicable to healthy buildings while mitigating the risk of airborne transmission allowing an effective comparison. The dataset included building codes for 15 states and cities and four rating tools, revealing several gaps in how codes and rating tools respond to airborne diseases. The study shows that, the benchmarked building codes lacked responsiveness to the risks of airborne diseases compared to building rating tools. The study results are expected to contribute to the effort of mitigating airborne transmission in office buildings, leading to healthier building design and operations in the future.

An increasing number of U.S. cities require commercial/office properties to publicly disclose their energy performance due to the adoption of energy benchmarking and disclosure policies. This level of transparency provides an additional in-depth assessment of a building's performance beyond a sustainability certification (e.g., Energy Star, LEED) and may lead less energy-efficient buildings to invest in energy retrofits, therefore improving their marketability. However, the research is scarce on assessing the impact of such policies on office building marketability. This study tries to fill this gap by investigating the impact of energy benchmarking policies on the performance of office buildings in four major U.S. cities (New York; Washington, D.C.; San Francisco; and Chicago). We use interrupted time series analysis (ITSA), while accounting for sustainability certification, public policy adoption, and property real estate performance. The results revealed that in some cities, energy-efficient buildings generally perform better than less energy-efficient buildings after the policy implementation, especially if they are Class A. The real estate performances of energy-efficient buildings also exhibited continuously increasing trends after the policy implementation. However, due to potentially confounding factors, further analysis is required to conclude the policy impacts on energy-efficient buildings are more positive than those on less energy-efficient buildings.

This paper performs a theoretical-empirical analysis of the effect of globalization on buildings’ height in Latin America and Southeast Asia. We develop a principal-agent model where global architecture firms use extra height as advertising in the tallest building per city, adding it to what determined by cities’ fundamentals of economic and geographic size. The model develops two ideas: (1) global architects have prestige advantages that allow them to add extra height, an advertising feature of their technical expertise and specialist competence, and (2) international architects of the Global South have additional reasons to use extra height compared to their Global North peers. The model is tested using a 2000–2018 panel database comprising 55 cities (from 25 countries). We find that in addition to economic and geography fundamentals, globalization and the location of architecture firms are strong determinants of buildings’ height, as predicted in our theoretical model of height as advertising.HIGHLIGHTSWe develop a behavioral high-rise construction model for Global South cities.The model is tested using panel data on 55 cities from 25 countries.Buildings’ height is determined by city fundamentals and globalization.Regression results prove the effect of architects on extra height.Keywords: Global citieshigh-rise constructionLatin AmericaSoutheast Asiaprincipal-agent model Disclosure statementNo potential conflict of interest was reported by the author(s).Notes1 Land availability refers to the total extension of the urbanized area for two reasons: (1) In theory, all the urban land is in the market at every point in time, not just fringe or vacant land. Furthermore, (2) highrise buildings are usually redevelopment projects in already consolidated central or pericentral locations.2 The figures correct the endogeneity between the variables: The larger urban economies are, by definition, the geographically larger metropolitan areas.3 Fuerst et al. (Citation2009) perform a similar exercise with USA data but emphasize differences in price, not in height. Nase et al. (Citation2019), emphasize the demand side (hedonic) contributions to building height in Amsterdam.4 A more general discussion of principal-agent models is offered in Sappington (Citation1991).5 Sappington (Citation1991, p. 45) highlights the essence of the principal-agent problem: “If you [the principal] want something done right, do it yourself.” However, in our complex economy, principals cannot do everything by themselves and, thus, need agents.6 For example, we could have revenues linearly positively related to extra height E, like the RD+βE with 0<β (instead of β=0, as in EquationEquation 2(2) ΠD=RD−(w+γ(HA−HD))(2) ). It can be verified that, by doing so, the predicted 0

The first year of COVID-19 tested the economic resilience of cities, calling into question the viability of density and the essential nature of certain types of services. This study examines built environment and socio-economic factors associated with the closure of customer-facing food businesses across urban areas of Seattle, Washington. The study covers 16 neighborhoods (44 census block groups), with two field audits of businesses included in cross-sectional studies conducted during the peak periods of the pandemic in 2020. Variables describing businesses and their built environments were selected and classified using regression tree methods, with relationships to business continuity estimated in a binomial regression model, using business type and neighborhood socio-demographic characteristics as controlled covariates. Results show that the economic impact of the pandemic was not evenly distributed across the built environment. Compared to grocery stores, the odds of a restaurant staying open during May and June were 24%, only improving 10% by the end of 2020. Density played a role in business closure, though this role differed over time. In May and June, food retail businesses were 82% less likely to remain open if located within a quarter-mile radius of the office-rich areas of the city, where pre-pandemic job density was greater than 95 per acre. In November and December, food retail businesses were 66% less likely to remain open if located in areas of residential density greater than 23.6 persons per acre. In contrast, median household income and percentage of non-Asian persons of color were positively and significantly associated with business continuity. Altogether, these findings provide more detailed and accurate profiles of food retail businesses and a more complete impression of the spatial heterogeneity of urban economic resilience during the pandemic, with implications for future urban planning and real estate development in the post-pandemic era.

The paper examines whether executive compensation packages within the US REIT industry are determined merely by performance or also by CEO power mechanisms that have an essential influence on board-level negotiations. We offer original insights into management compensation arrangements during and after the financial crisis. The relative importance of cash bonuses in CEO compensation contracts has more than halved after the crisis. Simultaneously, after the financial crisis, equity-based compensation became increasingly important. Concerning the pay-for-performance link, our results show no relationship during the financial crisis. However, after the crisis, we find a strong significant link between remuneration packages and corporate success.

PurposeCanterbury, New Zealand, experienced two significant earthquakes in 2010 and 2011 with a devastating impact on both houses and land. Negative media attention to the potential financial risks of living near or on the new Technical Category 3 (TC3) land or on land in a flood zone has fuelled the perception of uncertainty over the negative property price impacts. This research aims to determine if residents’ perceptions of the risks associated with various types of land zones (e.g. TC1, TC2 and TC3) are reflected in property prices.Design/methodology/approachThis research analyses sale price patterns and the relationship between sale prices and house characteristics before and after both earthquakes. A three-step approach was taken by applying: an average trend analysis, Geographic Information Systems’ (GIS) hotspot analysis to identify possible spatial differentiations between the before and after-effects of the earthquakes and hedonic modelling to quantify the effect of house characteristics on sale price while controlling for and comparing three land zones (TC1 to TC3).FindingsThe data suggest that average sale prices increased after both quakes in TC1 and TC2 in contrast to TC3 zones, while close to 8,000 structures were demolished in red zones from 2010-2013 (supply was reduced). The econometric modelling suggests that higher sale prices are achieved by: newer houses across all land zones and more recent sale agreements only in TC1 and TC2 zones. Other observations include the effect of certain exterior façade materials on sale prices on the overall data set and in the individual TC1 and TC3 zones. In conclusion, the results suggest that although caution might exist for the TC3 zone, the quality of the house can override the stigma attached to the TC3 zones.Research limitations/implicationsA confounding factor in the research was that approximately 7,800 homes were rezoned red and/or demolished between 2010 and 2013 changing the supply and demand balance. Further, banks and other lenders updated their requirements for new lending on properties in the Canterbury region, requiring a number of reports from professionals such as structural engineers, geotechnical engineers and valuers before any new lending would be approved. Additionally, immediately after the September and February earthquakes, there was a 21-day stand-down period for earthquake-cover in Canterbury and without adequate insurance cover banks would not advance mortgage money, causing a short-term slowdown in the residential property market.Practical/implicationsThe outcomes of this research will be of interest to government agencies tasked with assessing compensation for affected property owners. For example, the Earthquake Commission (EQC) developed aDiminution of Value Methodology for Increased Flooding Vulnerabilitythat formed the basis of a High Court declaratory judgment decision in December 2014 that cleared the way for the EQC to start settling properties with increased flooding vulnerability. The EQC methodology was informed by the results of similar studies to this one, from around the world. Homeowners and rating valuers will also be interested in the results to understand how house prices have been affected by market perceptions towards earthquake damage, particularly in the worst-affected areas.Originality/valueThis study fills a research void regarding the price impacts of residents’ perceptions of the risks associated with various types of land zones that reflect the expected future liquefaction performance of the land.

Although the number of Leadership in Energy and Environmental Design (LEED) certified office buildings continues to increase, research on their spatial distributions in comparison to non-LEED buildings and mass transit links need to be explored in depth. This paper focuses on these aspects using all the downtown Chicago Class A office buildings as the study area. The findings show that LEED buildings are 21% closer to each other, indicating possible proximity pressure. LEED-Gold buildings are also 18% closer to each other compared to Silver. Regarding mass transit, LEED compared to non-LEED buildings are on average 14% closer to a metro area commuter rail station (Metra) and 12% closer to a local commuter rail station (CTA). In addition, LEED and non-LEED buildings show some evidence of small group clustering in certain areas, while the econometric results indicate that buildings located along the most prominent office market street (Wacker Drive) achieved 12% higher LEED points compared to other LEED buildings. A similar result was experienced among buildings built after 1979 and those certified under LEED v.2009 (12% and 19%, respectively). Additionally, LEED-Silver buildings achieved a lower number of points compared to other certification levels by 20%.

The Christchurch area in New Zealand (NZ) experienced two significant earthquakes on September 4th, 2010 (7.1R) and February 22nd, 2011 (6.3R) with a devastating impact to both houses and land. Negative media attention to the potential financial risks of living near or on the new Technical Category 3 (TC3) land or on land in a flood zone has fuelled the perception of uncertainty over the negative property value impacts. However, the extent to which such attitudes are reflected in lower property values affected by these land categories is controversial. This paper outlines research to identify attitude changes based on the sale price patterns as well as the relationship between sale prices and house characteristics before and after both of the earthquakes. We take a three-step approach by applying: a) an average trend analysis, b) GIS hot-spot analysis to identify possible spatial differentiations between the before and after effects of the earthquakes and, c) hedonic modeling to quantify the effect of house characteristics on sale price while controlling for and comparing, three land zones (TC1 to TC3). The data suggests that average sale prices increased after both quakes in TC1 and TC2 rather than TC3 zones. GIS hot-spot results on house valuations provide evidence of limited differentiations after the two earthquakes compared to the before trends for Christchurch. In contrast, differentiations exist after the second earthquake in Selwyn for one of the TC1 zones as well as for a TC2 zone of the Waimakariri district after both earthquakes. The econometric modeling suggests that higher sale prices are achieved by: newer houses across all land zones and more recent sale agreements only in TC1 and TC2 zones. Other observations include the negative effect of exterior façade material such as fibrolite on sale prices on the overall dataset as well as the individual TC1 and TC3 zone, while mixture and roughcast have a positive effect. The roofing materials explored tend to have a diverse rather than a homogenous effect on sale prices. In conclusion, the results suggest that although caution might exist for the TC3 zone the quality of the house can overcome the media stigma attached to the TC3 zones.

Executive Summary. This is an empirical study of the economics of green (LEED and ENERGY STAR) designation among all downtown Chicago office transactions spanning 12 years. Green properties achieve on-average higher occupancies and prices / sf compared to non-green properties. The hedonic, repeat-sale, and transaction frequency models applied provide evidence of the price "bubble" in 2006–07 and the importance of green designation. LEED properties sold for a 23% price / sf premium, while an ENERGY STAR designation had no effect. Also, LEED Class A properties transacted 68% less than non-LEED, while ENERGY STAR Class B properties transacted 23% more than non-ENERGY STAR. These findings are consistent with the hypothesis that significant capital expenditures for achieving a greener property require longer cost recovery holding periods.

This paper examines office building sales in downtown Chicago for the period 1996 to 2007. Our analysis provides a conventional OLS approach and an exploration of spatial dependence. We find some evidence of spatial lag and spatial autocorrelation in our dataset but the results are similar to the OLS approach. The results indicate that high occupancy is a statistically significant factor only for Class B properties, suggesting that a low occupancy rate is a negative sign for these buildings of lower quality. Class A property receives a 44% price/sq. ft. boost due to the premium classification. This increase becomes more pronounced (90%) for floor plate efficient, neoclassical/revival facade and/or famous Class A properties built before 1972 when the comparison is with Class B properties of the same age.

The paper explores overall worldwide terrorism attacks and those targeting separately commercial and government facilities, through statistical analysis and cycling with a 40-year dataset. The results indicate a surge of lethal attacks after the Gulf War and the existence of cycles. The cyclicality of terrorist incidences in commercial buildings is estimated at 18.4 years (injury and fatality cycles are 7.8 and 8.4 years, respectively). Projections are offered until 2020, with the next period of increased casualties predicted from the end of 2008 through 2010. Concerns are raised on improvised explosive devices (IEDs), Trojan-horses, and building-system tampering. Vigilance, information-sharing, and use of technology by building personnel may reduce the predicted casualty trends. Historically, terrorist groups shared techniques (DHS, 2007) and improved those most likely to achieve their objectives. A shift in terrorist strategy towards an increase in the number of casualties was detected since the 1990s.1 This shift towards mass casualties, along with the concentration of people in high-density commercial structures (World Trade Center attacks (1993 and 2001)] and mass transit facilities [Madrid (2004) and London (2005) train bombings] has raised significant security concerns in recent years. Terrorists have always tried to exploit the vulnerabilities of their targets and selected the path of least resistance (Enders and Sandler, 1993; and Sandler and Enders, 2004). This type of attitude is an indication of a rational actor (in economics) who tries to maximize his ultimate goal with a given amount of resources and constraints (Landes, 1978; and Sandler, Tschirhart, and Cauley, 1983). The paper presents an empirical analysis of terrorist activity (incidents and casualties) using statistical and cyclicality modeling. Also raised are five concerns regarding private commercial buildings: (1) the possible use of Improvised Explosive Devices (IEDs); (2) suicide attacks; (3) the possibility of an implanted Trojan horse by a terrorist organization as an employee of an unaware tenant, as a contractor or a vendor with the main goal of information gathering and eventually inflicting mass casualties in the building or surrounding buildings; (4) the need to secure HVAC systems; and (5) oversight of centrally controlled building systems. More specifically, the dataset consists of the worldwide MIPT transnational terrorism data (1968-2006) in the form of overall attacks and their dissection in attacks targeting government and private commercial buildings. The methodology used verifies the general belief that the number of casualties increased in recent years and argues the existence of cycles in terrorism activity based on the forty years of observations. The results of the study indicate that the end of the Gulf War marked the beginning of a new and deadlier chapter in worldwide transnational terrorism, with overall fatalities increasing more than 100% and private commercial building fatalities increasing by almost 300%. The testing for the existence of cycles in terrorism activity (incidents and casualties) also proved to be true, allowing a short-term prediction through 2020. The empirical results suggest an increased likelihood of significant casualties (both injuries and deaths) caused by terrorist attacks targeting private commercial buildings with peaks estimated in 2009 and 2018-19. These results along with the downsizing of building security measures (due to the absence of another major incident in a commercial building and the high maintenance cost) are at least troubling considering the ultimate goal of a safe building environment. Awareness needs to be raised among building owners and security personnel to become proactive rather than reactive in defending their facility. After September 11, 2001 (9/11), a number of measures were taken but a continuous revaluation of security threats in coordination with local law enforcement and the Joint Terrorism Task Forces (JTTFs) is needed to apply new surveillance tactics/ techniques and detect/deter a possible attack. …

This study examines the effect of Leadership in Energy and Environmental Design (LEED) ratings and certification levels on Assessed (AV) and Market Values (MV), while controlling for a property's characteristics and its location. The overall dataset was developed by combining information from CoStar Group, U.S. Green Building Council (USGBC), and local Assessors/Treasurer. The results indicate that ENERGY STAR designation increases AV and MV substantially. The effect of LEED rating/level on both of these values (AV and MV) can be differentiated based on the level of geographic aggregation. LEED-Existing Building (EB) designation at the Gold level has a strong positive effect on AV, while LEED-EB at the Silver level has a similar effect on both AV and MV. This effect is absent among all LEED-EBs, when controlling only for MSAs. LEED-New Construction at the Gold level has a strong positive effect on MV, while LEED-Core & Shell at the Gold and Silver levels almost doubles that effect on AV, when controlling ...

This paper is an empirical study of the capitalization rates for 132 office building sales in downtown Chicago from 1996 to 2007. The capitalization rate is hypothesized to be a function of the classic capital asset pricing model variable and variables intended to capture the expectation that the real market value of the building will change. The results show that the capitalization rate for office buildings incorporates a very low value for "beta." A lower capitalization rate was associated with a smaller risk-free rate, a lower borrowing rate, class A buildings, newer buildings, buildings that had been renovated, a reduction in the vacancy rate in the downtown Chicago office market, and an increase in employment in the financial sector of the metropolitan area.

The attacks of September 11, 2001, and more recently the Madrid and London downtown train bombings, have raised concerns over both the safety of downtowns and the continuous efforts by terrorists to attack areas of such high density and significance. This article employs building-level data on vacancy rates to investigate the impact of an increased perception of terrorist risk after 9/11 on the office real estate market in downtown Chicago. Chicago provides the perfect laboratory to investigate the effects of an increase in the perceived level of terrorist risk in a major financial district. Unlike in New York, the 9/11 attacks did not restrict directly the available office space in downtown Chicago. However, the 9/11 attacks induced a large increase in the perception of terrorist risk in the Chicago Central Business District, which includes the tallest building in the US (the Sears Tower) and other landmark buildings which are potential targets of large-scale terrorist attacks. We show that, following the 9/11 attacks, vacancy rates experienced a much more pronounced increase in the three most distinctive Chicago landmark buildings (the Sears Tower, the Aon Center and the Hancock Center) and their vicinities than in other areas of the city of Chicago. Our results suggest that economic activity in Central Business Districts can be greatly affected by changes in the perceived level of terrorism.

. The effect of high-rise fires on building code changes is illustrated through three cases studies: one in Philadelphia and two more recent in Chicago. An indepth statistical analysis in the case of the two Chicago office building fires indicates that both fires register a statistically significant impact on vacancy levels of the non-sprinkled buildings as a result of the retrofitting process and tenant hesitation to lease non-sprinkled space. This effect is more evident in Class B buildings, which have commenced their retrofitting efforts, compared to Class C buildings, where the retrofitting process stalled because of the overwhelming cost in comparison to the more marginal property returns.

Executive Summary. This paper identifies the cyclical patterns of an office market under potential terrorism threat by comparing vacancy rates and rent per square foot trends before and after September 11, 2001. This study goes beyond identifying general market trends and focuses specifically on office trends among trophy, Class A, and Class B buildings in Chicago. The findings indicate that trophy buildings were severely impacted by 9/11 and did not recover until the end of 2005. Class A buildings were also significantly impacted, although less than the trophy buildings, while Class B experienced even less of an impact. In general, the Chicago office market cycles were estimated to be between 6.4 (sublease vacancy of Class B buildings) and 13 years (total vacancy of Class A buildings).

This paper provides an overview of government and independent research conducted in the wake of Hurricane Katrina in an effort to highlight additional areas in need of study. In addition to the overview of natural disasters and their impact on the United States, the aftermath of the San Francisco earthquake and the actions taken by the government, the local and private sector is also highlighted as providing some lessons learned but maybe forgotten in the wake of Hurricane Katrina.