In a recent interview with Globe Street, Norm Miller, Hahn Chair of Real Estate Finance at the Burnham-Moores Center for Real Estate at the University of San Diego School of Business, discussed safety, security and why they should be considered at all levels.
GlobeSt.com: How is the issue of safety going to continue to impact the market?
Miller: It already did, and then it passed out of our memories. Many tenants moved out of theSears Tower (now Willis Tower) in the two or three years after 9/11, as well as other famous buildings like the Empire State Building, John Hancock building and the Transamerica Building. Rents plummeted by 20% to 40% in these famous tall buildings for about two years, and then rents started to climb back up. By 2007 or 2008, we were fully back to normal rents in these buildings, so our memories last about seven years. After a major hurricane hits the coast of Florida, prices dip for a few years in the neighborhood most affected, but quickly people forget. The BP spill in the Gulf caused a lot of property stigma; however, we soon forgot about it as soon as the beaches were cleaned.