Author: S. Michael Giliberto

Start Page: 485
End Page: 492
Volume: 7
Issue Number: 4
Year: 1992
Publication: Journal of Real Estate Research

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.