Environmental Contamination and Industrial Real Estate Prices

• Published in: The Journal of real estate research Vol. 23; no. 1/2; pp. 179 - 200
• Main Author: Jackson, Thomas O.
• Format: Journal Article
• Language: English
• Published: Clemson The American Real Estate Society 01.01.2002; Taylor & Francis Ltd
• Subjects: Case studies; Chemical contaminants; Conditional sales; Contamination; Cost estimates; Cost of sales; Costs; Environmental cleanup; Environmental remediation; Environmental risk; Housing prices; Industrial buildings; Industrial property; Industrial real estate; Industrial space; Landfill; Mathematical models; Office buildings; Offices; Prices; Property values; Real estate; Real estate appraisal; Sales; State court decisions; Stigma; Terms of sale; Valuation; United States > US; California
• ISSN: 0896-5803; 2691-1175
• DOI: 10.1080/10835547.2002.12091073

This article is the winner of the Industrial Real Estate manuscript prize (sponsored by Society of Industrial and Office REALTORS) presented at the American Real Estate Society Annual Meeting. This article examines the effects of environmental contamination on the sales prices of industrial properties. Two general questions are addressed. The first is the extent to which sales prices may be impacted by contamination. The second is whether sales price effects due to contamination persist subsequent to the remediation of previously contaminated industrial properties. Using data on industrial property sales in Southern California, this study estimates sales price models that address these two questions. The results show that there are statistically significant impacts on property values in the period before and during remediation, but that these effects dissipate subsequent to cleanup.