A Study on the Impact of Earthquake Risk on the Value of Office Buildings in the Six Words of Tokyo

Abstract

The purpose of this study is to verify the impact of the earthquake risk on the value of office buildings. To examine the effects of vulnerability to building and probable maximum loss on price, rent, and appraisal cap rates, the use of which is office, these dependent variables are regressed on characteristics of the property by cross-sectional hedonic model. As a result, it was found that the vulnerability to building collapse decrease unit prices of office buildings by 7.5% and rents of those by 7.6%. On the other hand, the vulnerability to building collapse didn’t impact on cap rates of office buildings.