:. Office oversupply cycles in many countries--USA, Australia, South Africa, UK, Sweden, Singapore, Thailand, Malaysia, Japan, China, etc.--in some cases over several macroeconomic cycles--1920s, 1970s, 1980s, 1990s--have cost hundreds of billions of dollars directly through lost rents on vacant space, rent declines throughout the market, and project negative net present values. Non-performing
... [Show full abstract] commercial property assets contribute to financial intermediary insolvency and net worth write-offs and therefore to recessions as lenders are forced to reduce lending to maintain capital adequacy ratios. This paper presents a system dynamics model of an office market which allows experimentation with information feedbacks and decision policies controlling office supply responses. Model results lead to suggestions for system redesign to reduce the severity of office oversupply cycles. Reducing supply response delays through demand forecasting and shorter planning lags, and spreading pr...