The 9/11/2001 Impact on Trophy and Tall Office Property

Abstract

Executive Summary: This study focuses on the possible impact of the events of September 11, 2001 on tall and trophy office buildings for market behavior that could influence value. The findings indicated that there is little evidence of any significant departure from general market trends for tall buildings or most “trophy” property, yet for a small subset of truly famous buildings in both New York City and Chicago, such as the Empire State Building and the Sears Tower, there are significant rental and value losses. Sublease activity appears to work well as an indicator of future occupancy trends. Using an additional survey aimed at property managers, there is little evidence of tenant flight away from tall buildings, or dense urban areas, yet property managers do expect significant design changes in the future as a result of September 11 and most have tightened security procedures.