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Full-Text Articles in Real Estate

What Really Happens During Flight To Safety: Evidence From Real Estate Markets, Walter I. Boudry, Robert A. Connolly, Eva Steiner May 2018

What Really Happens During Flight To Safety: Evidence From Real Estate Markets, Walter I. Boudry, Robert A. Connolly, Eva Steiner

Working Papers

Flight to safety (FTS) affects the markets for risky assets such as stocks, corporate bonds, and commodities. Yet, little is known about the effects on commercial real estate. We show that REITs offer a partial hedge against FTS, with daily total returns being less sensitive to FTS than many other industries and measures of REIT liquidity actually improving on FTS days. However, a cluster of FTS days signals a decline in economic fundamentals in the long run. We find that the odds of a drop in REIT quarterly revenue increase by 15% after an FTS cluster, ceteris paribus. This effect ...


Reit Capital Structure: The Value Of Getting It Right, Eva Steiner Jun 2017

Reit Capital Structure: The Value Of Getting It Right, Eva Steiner

Eva Steiner

An analysis of the capital structure of commercial real estate investment trusts finds that the strongest REITs overall tend to employ lower leverage and longer debt maturity, maintain larger proportions of fixed-rate debt, rely less on secured debt, have a greater line of credit capacity but use it less, and hold smaller cash reserves. The REITs’ strength is measured by Tobin’s q, which expresses the ratio of the market value of assets relative to their book value. The study examines yearly data for the years 1993 through 2013 for 137 REITs based in the United States and the years ...


Reit Capital Structure: The Value Of Getting It Right, Eva Steiner Jun 2017

Reit Capital Structure: The Value Of Getting It Right, Eva Steiner

Center for Hospitality Research Publications

An analysis of the capital structure of commercial real estate investment trusts finds that the strongest REITs overall tend to employ lower leverage and longer debt maturity, maintain larger proportions of fixed-rate debt, rely less on secured debt, have a greater line of credit capacity but use it less, and hold smaller cash reserves. The REITs’ strength is measured by Tobin’s q, which expresses the ratio of the market value of assets relative to their book value. The study examines yearly data for the years 1993 through 2013 for 137 REITs based in the United States and the years ...


First Quarter 2016: Second Verse, Same As The First, Crocker H. Liu, Adam D. Nowak, Robert M. White Jr. Apr 2016

First Quarter 2016: Second Verse, Same As The First, Crocker H. Liu, Adam D. Nowak, Robert M. White Jr.

Cornell Real Estate Market Indices

Our Standardized Unexpected Price (SUP) metric continues to show a decline in the price of large hotels and positive momentum for the price of small hotels. Although investors are currently experiencing positive leverage, with return on invested capital greater than borrowing costs, dark clouds have appeared in the form of higher interest rates for hotels, higher credit spreads, and higher volatility relative to other commercial real estate. Our financing, risk, and early warning indicators all continue to suggest that hotel prices should start to level off or decline. This is report number 18 of the index series.


Third Quarter 2015: Have Hotel Prices Peaked?, Crocker H. Liu, Adam D. Nowak, Robert M. White Oct 2015

Third Quarter 2015: Have Hotel Prices Peaked?, Crocker H. Liu, Adam D. Nowak, Robert M. White

Cornell Real Estate Market Indices

The price of large and small hotels appears to have peaked, based on our Standardized Unexpected Price (SUP) metric. Hotel investment based on operating performance is in the black (breakeven). Indicators that hotel prices should start to level off or decline include the historical cycle analysis, a continued rise in cost of debt financing, a widening of the relative risk premium for hotels, higher total risk for hotels relative to other commercial real estate, and continued declines in the hotel REIT index, business confidence index, and the architecture billings index. This is report number 16 of the index series.


Diversification Benefits Of Reit Preferred And Common Stock: New Evidence From A Utility Based Framework, Walter I. Boudry Ph.D., Jan A. Deroos Ph.D., Andrey D. Ukhov Ph.D. Sep 2014

Diversification Benefits Of Reit Preferred And Common Stock: New Evidence From A Utility Based Framework, Walter I. Boudry Ph.D., Jan A. Deroos Ph.D., Andrey D. Ukhov Ph.D.

Cornell Real Estate and Finance Working Papers

We study the diversification benefits of REIT preferred and common stock using a utility based framework in which investors segment based on risk aversion. Taking the view of a long run investor, we conduct our analysis using data from 1992 to 2012. We examine optimal mean-variance portfolios of investors with different levels of risk aversion given access to different classes of assets and establish two main results. First, REIT preferred and common stock provides significant diversification benefits to investors. REIT common stock helps low risk aversion investors attain portfolios with higher returns, while REIT preferred stock helps high risk aversion ...


Reit To Deal With Hdb Demand-Supply Challenges, Chor Hao Ong, David Kuo Chuen Lee Jul 2014

Reit To Deal With Hdb Demand-Supply Challenges, Chor Hao Ong, David Kuo Chuen Lee

David LEE Kuo Chuen

A group of academics from the Singapore Management University (SMU) and a noted property consultant are making the case for a REIT comprising Housing and Development Board (HDB) residential and commercial units.


Sound Off #1-2 Industry Professional Response, David Lesser Jun 2014

Sound Off #1-2 Industry Professional Response, David Lesser

Cornell Real Estate Review

[Excerpt] As Chairman and Chief Executive Officer of Power REIT, I bring with me 25 years of experience in real estate investment and finance. Prior to Power REIT I held leadership roles with several public real-estate investment trusts (REITs). My experience in the REIT sector and previous investment experience with renewable energy projects allowed me to understand how renewable energy and real estate intersect, and how REIT ownership would be a powerful structure for investing in and reducing the cost of capital for renewable energy projects.


Sound Off #1-2 Industry Professional Response, Dave Feldman Jun 2014

Sound Off #1-2 Industry Professional Response, Dave Feldman

Cornell Real Estate Review

The U.S. solar industry has been able to dramatically decrease system costs over the past 5 years through the mobilization of global manufacturing and a more mature deployment workforce. Despite these successes, U.S. prices are still higher than they are in many parts of the developed world. Some of this gap will be narrowed in the coming years through public and private sector initiatives to lower customer acquisition costs, and relieve permitting and interconnection issues. However, one of the largest levers the industry aims to use is gaining access to public capital markets. If the solar industry can ...


Us Real Estate Investment Performance: 1983-2012, John F. Kerrigan Jan 2014

Us Real Estate Investment Performance: 1983-2012, John F. Kerrigan

Honors Theses and Capstones

This study provides an overview of real estate investment performance over a 1983-2012 time period. The results show that although equity REITs outperformed all other assets on average annual return, on a risk-adjusted basis both private retail and apartment real estate outperformed all other assets. The study also found a recent trend in increased correlation between common stocks and REITs.


Reit To Deal With Hdb Demand-Supply Challenges, Chor Hao Ong, David Kuo Chuen Lee Aug 2013

Reit To Deal With Hdb Demand-Supply Challenges, Chor Hao Ong, David Kuo Chuen Lee

Research Collection Lee Kong Chian School Of Business

A group of academics from the Singapore Management University (SMU) and a noted property consultant are making the case for a REIT comprising Housing and Development Board (HDB) residential and commercial units.


Attribution Analysis Tool, Walter I. Boudry, Matthew C. Green, Crocker H. Liu, Andrey D. Ukhov Jan 2013

Attribution Analysis Tool, Walter I. Boudry, Matthew C. Green, Crocker H. Liu, Andrey D. Ukhov

Center for Real Estate and Finance Tools

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Scroll down to "Additional Files" to access the calculator.

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The attribution analysis spreadsheet is developed based on the model discussed in the Center for Real Estate and Finance at Cornell report called "Measuring the Value Added of Hotel REIT Managers Using MSA Benchmarks: A Return-Based Attribution Analysis Approach" by Walter I. Boudry, Crocker H. Liu, and Andrey D. Ukhov.

Attribution analysis also known as style analysis allows investors and managers to assess the extent to which managers add value to their firm’s common stock returns. Given a set of passive indices, the excel worksheet constructs a benchmark portfolio that ...


On The Hybrid Nature Of Reits, Walter I. Boudry, N. Edward Coulson, Jarl G. Kallberg, Crocker H. Liu Jan 2012

On The Hybrid Nature Of Reits, Walter I. Boudry, N. Edward Coulson, Jarl G. Kallberg, Crocker H. Liu

Articles and Chapters

The consensus that emerges from the current research on the linkage between securitized and direct investment in real estate is that direct (private) real estate returns play a relatively minor role in the real estate investment trust (REIT) return generating process. However, this result may at least partially be due to the coarseness of the measures of direct real estate returns or the relatively short return horizons used in previous studies. This study takes a different and unique perspective. Unlike earlier studies we do not use aggregated, average appraisal based returns on direct real estate investment. Instead, we use the ...


Does The Reit Tale Wag The Dog? The Relationship Between Tenant Ownership And The Volatility Of Retail Reit Stock Returns, Dana G. Staley Jan 2012

Does The Reit Tale Wag The Dog? The Relationship Between Tenant Ownership And The Volatility Of Retail Reit Stock Returns, Dana G. Staley

CMC Senior Theses

This paper will assess the relationship between tenant characteristics and public REIT volatility. Specifically, we focus on the retail REIT subset of the industry. Given that retail REITs are one the most transparent asset classes, they provide an interesting landscape for evaluating the relationship between the firm and the customers, or in this case, the tenants. Specifically, we assess how major tenant ownership, public or private equity owned, impacts the volatility of the REIT’s stock price using 2010 data on 30 retail REITs. Controlling for tenant credit quality, leverage, ROE, book-to-market, size, age, region and property focus, we find ...


An Examination Of Reit Dividend Payout Policy, Walter I. Boudry Jan 2011

An Examination Of Reit Dividend Payout Policy, Walter I. Boudry

Articles and Chapters

This paper proposes a new methodology for decomposing real estate investment trust (REIT) dividends into discretionary and nondiscretionary components. By examining the tax characteristics of dividends, I am able to accurately measure the discretionary component of a REIT's dividend. This methodology provides new insights into our understanding of REIT dividend payout policy. Unlike previous studies that find limited explanations for discretionary dividend payouts, I find a systematic explanation. Discretionary dividends tend to be large on average making up between 18% and 35% of a REIT's total dividend and display considerable variation through time and across firms. The main ...


Real Estate Investment Trusts: A Review Of The Financial Economics Literature, John B. Corgel, Willard Mcintosh, Steven H. Ott Jan 1995

Real Estate Investment Trusts: A Review Of The Financial Economics Literature, John B. Corgel, Willard Mcintosh, Steven H. Ott

Articles and Chapters

This paper is a survey of the literature on Real Estate Investment Trusts, commonly as REITs. The literature is separated into three major research topics: investment financing decisions, and return and risk issues. The central papers addressing each optics are described and their results are summarized. Suggestions for further also are provided.


An Analysis Of Real-Estate Risk Using The Present Value Model, Crocker H. Liu, Jianping Mei Jan 1994

An Analysis Of Real-Estate Risk Using The Present Value Model, Crocker H. Liu, Jianping Mei

Articles and Chapters

The current study uses a present value model that allows for a time-varying expected discount rate in conjunction with a VAR process to decompose real-estate risk. The study finds that the variance of unexpected returns accounts for most of the total risk with cash-flow risk accounting for twice as much of the unexplained real-estate risk although discount rate risk is also an important factor. This dominance of cash-flow risk is found to result in a weaker mean reversion process for real estate relative to stocks. Another finding is that real estate investors tend to become apprehensive about the future when ...