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Full-Text Articles in Real Estate

The Consequences Of Reit Index Membership For Return Patterns, Andrey Pavlov, Eva Steiner, Susan Wachter Jul 2019

The Consequences Of Reit Index Membership For Return Patterns, Andrey Pavlov, Eva Steiner, Susan Wachter

Eva Steiner

The impact of stock market index membership on REIT stock returns is unclear. Returns may become more like those of other indexed stocks and less like those of their underlying properties. Taking advantage of the inclusion of REITs in major S&P indexes starting in 2001, we find that shared index membership significantly increases the correlation between REIT returns. However, index membership also enhances the link between REIT returns and the underlying real estate, consistent with improved pricing efficiency.


Financial Flexibility And Manager-Shareholder Confict: Evidence From Reits, Timothy Riddiough, Eva Steiner Jul 2019

Financial Flexibility And Manager-Shareholder Confict: Evidence From Reits, Timothy Riddiough, Eva Steiner

Eva Steiner

Using equity REIT data, we show empirically that the use of unsecured debt, which contains standardized covenants that place limits on total leverage and the use of secured debt, is associated with lower leverage outcomes. We then show that firm value is sensitive to leverage levels, where lower leverage is associated with higher firm value. In the presence of weak managerial governance, our results suggest that unsecured debt covenants function as a managerial commitment device that preserves the firm’s debt capacity to enhance financial flexibility.


Financial Flexibility And Manager-Shareholder Confict: Evidence From Reits, Timothy Riddiough, Eva Steiner Oct 2017

Financial Flexibility And Manager-Shareholder Confict: Evidence From Reits, Timothy Riddiough, Eva Steiner

Articles and Chapters

Using equity REIT data, we show empirically that the use of unsecured debt, which contains standardized covenants that place limits on total leverage and the use of secured debt, is associated with lower leverage outcomes. We then show that firm value is sensitive to leverage levels, where lower leverage is associated with higher firm value. In the presence of weak managerial governance, our results suggest that unsecured debt covenants function as a managerial commitment device that preserves the firm’s debt capacity to enhance financial flexibility.


The Consequences Of Reit Index Membership For Return Patterns, Andrey Pavlov, Eva Steiner, Susan Wachter Jun 2017

The Consequences Of Reit Index Membership For Return Patterns, Andrey Pavlov, Eva Steiner, Susan Wachter

Articles and Chapters

The impact of stock market index membership on REIT stock returns is unclear. Returns may become more like those of other indexed stocks and less like those of their underlying properties. Taking advantage of the inclusion of REITs in major S&P indexes starting in 2001, we find that shared index membership significantly increases the correlation between REIT returns. However, index membership also enhances the link between REIT returns and the underlying real estate, consistent with improved pricing efficiency.


The Consequences Of Reit Index Membership For Return Patterns, Andrey Pavlov, Eva Steiner, Susan Wachter Oct 2016

The Consequences Of Reit Index Membership For Return Patterns, Andrey Pavlov, Eva Steiner, Susan Wachter

Eva Steiner

We study the impact of S&P index membership on REIT stock returns. Given the hybrid nature of REITs, their returns may become more like those of other indexed stocks and less like those of their underlying properties. The existing literature does not offer clear predictions on these potential outcomes. Taking advantage of the inclusion of REITs in major S&P indexes starting in 2001, we find that shared index membership significantly increases the correlation between REIT returns after controlling for the stock characteristics that determine index membership. We also document that index membership enhances the link between REIT stock ...


Reit Capital Structure Choices: Preparation Matters, Andrey Pavlov, Eva Steiner, Susan Wachter Oct 2016

Reit Capital Structure Choices: Preparation Matters, Andrey Pavlov, Eva Steiner, Susan Wachter

Eva Steiner

Sun, Titman, and Twite (2015) find that capital structure risks, namely high leverage and a high share of short-term debt, reduced the cumulative total return of US REITs in the 2007-2009 financial crisis. We find that mitigating capital structure risks ahead of the crisis by reducing leverage and extending debt maturity in 2006, was associated with a significantly higher cumulative total return 2007-2009, after controlling for the levels of those variables at the start of the financial crisis. We further identify two systematic cross-sectional differences between those REITs that reduced capital structure risks prior to the financial crisis and those ...


The Consequences Of Reit Index Membership For Return Patterns, Andrey Pavlov, Eva Steiner, Susan Wachter Oct 2016

The Consequences Of Reit Index Membership For Return Patterns, Andrey Pavlov, Eva Steiner, Susan Wachter

Working Papers

We study the impact of S&P index membership on REIT stock returns. Given the hybrid nature of REITs, their returns may become more like those of other indexed stocks and less like those of their underlying properties. The existing literature does not offer clear predictions on these potential outcomes. Taking advantage of the inclusion of REITs in major S&P indexes starting in 2001, we find that shared index membership significantly increases the correlation between REIT returns after controlling for the stock characteristics that determine index membership. We also document that index membership enhances the link between REIT stock ...


Reit Capital Structure Choices: Preparation Matters, Andrey Pavlov, Eva Steiner, Susan Wachter Feb 2016

Reit Capital Structure Choices: Preparation Matters, Andrey Pavlov, Eva Steiner, Susan Wachter

Articles and Chapters

Sun, Titman, and Twite (2015) find that capital structure risks, namely high leverage and a high share of short-term debt, reduced the cumulative total return of US REITs in the 2007-2009 financial crisis. We find that mitigating capital structure risks ahead of the crisis by reducing leverage and extending debt maturity in 2006, was associated with a significantly higher cumulative total return 2007-2009, after controlling for the levels of those variables at the start of the financial crisis. We further identify two systematic cross-sectional differences between those REITs that reduced capital structure risks prior to the financial crisis and those ...


Perspectives On Timeshare Ownership: An Exploratory Study Of Markets In China, Kai-Li Chi Jan 2009

Perspectives On Timeshare Ownership: An Exploratory Study Of Markets In China, Kai-Li Chi

UNLV Theses, Dissertations, Professional Papers, and Capstones

This study aims to explore the attitudes of prospective customers in China about timeshares, and to identify potential marketing opportunities for timeshare companies targeting China. This exploratory study is the first of its kind and it intends to provide valuable information about the consumer potential for the timeshare industry in China. The findings indicate that consumer acceptance of timeshares in China is high. Six socio-demographic variables were identified as keys in predicting those with statistically significant likelihood of purchasing a timeshare within the next three years: age, occupation, marital status, annual household income, vacation frequency, and attendance at a previous ...


A Different Kind Of Pain & Gain For Hotel Investors During This Cycle, John B. Corgel Jul 2001

A Different Kind Of Pain & Gain For Hotel Investors During This Cycle, John B. Corgel

Articles and Chapters

[Excerpt] The performance of hotel markets during the 1980s was unique and in violation of the economic principles that govern these markets. The most direct evidence of this period-specific behavior comes from the fact that hotel occupancy rates noticeably and persistently declined during the decade while the supply of hotel rooms sky rocketed. Exhibit 1 contains information on hotel market indicators from the database of thousands of hotels that my firm manages. The average hotel occupancy rate in the U.S. began the decade in 1980 at 73.5 percent and ended at 65.2 percent. In direct contradiction with ...


Property-By-Property Valuation Of Publicly Traded Real Estate Firms, John B. Corgel Apr 1997

Property-By-Property Valuation Of Publicly Traded Real Estate Firms, John B. Corgel

Articles and Chapters

Because the assets held by publicly traded real estate companies are infrequently traded, their values must be estimated to determine the relationship between share prices and net asset values for investment purposes. Alternative modeling approaches may be followed to accomplish these valuations, including income-based and transaction-based models. The real estate values of publicly traded firms are estimated in this study using a hedonic pricing model that combines the market's valuation of the fundamental characteristics of the assets with the specific characteristics of each asset being valued. After converting asset values to estimates of net asset values, the net asset ...


Local Economic Base, Geographic Diversification, And Risk Management Of Mortgage Portfolios, John B. Corgel, Gerald D. Gay Oct 1987

Local Economic Base, Geographic Diversification, And Risk Management Of Mortgage Portfolios, John B. Corgel, Gerald D. Gay

Articles and Chapters

Variability of local economic conditions underlie, in part, the default and prepayment risks of mortgages originated in a metropolitan area. In this study we examine the benefits of diversifying across metropolitan areas for reducing these risks. Employment data for the thirty largest metropolitan areas in the United States, divided into eight industry groups, are analyzed with the aid of factor and principal component analysis to determine if the variances of employment changes across the thirty areas are independent. Independence is investigated to assess the potential for diversification. Mean-variance portfolio analysis is then used to measure the gains from geographic diversification ...


Financial Planning For Real Estate Production Decisions, Colin Balogh, John B. Corgel, Gregg Logan Apr 1987

Financial Planning For Real Estate Production Decisions, Colin Balogh, John B. Corgel, Gregg Logan

Articles and Chapters

Recently, the production and service components of the real estate business have evolved from collections of mom and pop operations to full-fledged industries comprised of highly competitive, small and medium-sized firms. This evolution to larger-scale business operations has important implications for the type of financial analysis to be conducted by real estate firms in the future. Specifically, the traditional project-specific financial analysis of real estate investment opportunities will be subsumed by strategic financial planning for real estate decisions at the firm level. Even with a radical change in emphasis and interpretation, the discounted cash flow tradition, firmly established in project-specific ...


The Impact Of Gnma Futures Trading On Cash Market Volatility, John B. Corgel, Gerald D. Gay Jul 1984

The Impact Of Gnma Futures Trading On Cash Market Volatility, John B. Corgel, Gerald D. Gay

Articles and Chapters

[Excerpt] A general conclusion that can be drawn from theoretical analyses of spot market volatility when futures markets exist is best summarized by Turnovsky [1983, p. 1364] who states "under their (theoretical studies) respective assumptions, the futures market almost certainly stabilizes the “spot price." This suggests that trading in futures contracts may originate when cash markets experience considerable volatility. Indeed, futures trading on a variety of financial instruments was initiated shortly after periods of historically high interest rates.