Banking Relationships and REIT Capital Structure

This article examines the evolution of real estate investment trust (REIT) capital structure in the new REIT era with a focus on the effects of banking relationships on REIT capital structure. Using a unique sample of REITs from 1992 to 2003, we find that, after controlling for firm characteristics, REITs with banking relationships are more likely to obtain long‐term debt ratings and subsequently issue public debt. Moreover, REITs with banking relationships tend to use less secured debt and have lower leverage. These findings support the notion that banking relationships facilitate REITs' access to the public debt markets and help explain why REITs shift from traditional mortgage financing to bank debt and public capital market financing. The results also support the proposition that firm leverage should be positively related to the amount of a firm's secured debt.     

Explaining the Variation in REIT Capital Structure: The Role of Asset Liquidation Value

We test the Shleifer-Vishny hypothesis that asset liquidation values influence both firm leverage and the choice of debt maturity. Using panel data on real estate investment trusts, we estimate a simultaneous equation model and find that firms specializing in the most (least) liquid assets use more (less) leverage and longer (shorter) maturities. The evidence also suggests that, for REITs, debt maturity and leverage are substitutes, consistent with the theory and predictions of Barclay, Marx and Smith.     

REIT Dividend Determinants: Excess Dividends and Capital Markets

The determinants of excess dividend payments above mandatory requirements in real estate investment trusts (REITs) are evaluated. Payment of excess dividends is related to factors associated with reduced agency costs, strong operating performance, the implementation of a stock repurchase plan and an ability to access short-term bank debt. Recognizing that access to external capital is essential for long-term growth, REITs manage dividend policy to allow for capital acquisition in the form of both equity and debt. The acquisition and use of short-term bank debt provides REIT management flexibility in determining dividend policy.     

REIT Capital Budgeting and Equity Marginal q

Equity marginal  q  is the change in the market value of a company's equity in response to a one-unit unexpected change in its asset base. Hence, it is a profitability index that evaluates a firm's capital budgeting decisions at the margin. We estimate the equity marginal  q  for real estate–managing public corporations, namely, real estate investment trusts (REITs), in an attempt to understand how the various costs and benefits of being a public corporation play a role in managing this important asset class. Using the universe of equity REITs for the period from 1993 to 2005, we find that REITs with greater idiosyncratic volatility, higher stock turnover and smaller bid-ask spread have a higher equity marginal  q . In addition, both the holdings of institutional investors and their investment horizons are respectively positively related to equity marginal  q.  With these firm characteristics taken into account, firm size is found to be negatively related to equity marginal  q . Our findings are economically important as well, because the equity marginal  q  ratio alone accounts for approximately one-third of the total REIT shareholder wealth change during the study period.     

The Dynamics of REIT Capital Flows and Returns

This study examines the effects of capital flows into the REIT sector on REIT returns and, simultaneously, the effects of REIT returns on subsequent REIT capital flows. The dynamic relation between REIT capital flows and returns is estimated using vector autoregression (VAR) techniques. Unlike static regression techniques, our dynamic model produces estimates of the short-run relationships, long-run relationships, impulse response functions and forecast variance decompositions. We find evidence that REIT equity flows are significantly positively related to the prior quarter's flows and negatively related to flows from two quarters ago. The evidence on the responsiveness of flows to prior returns is time-period specific. In the important post-1992 subperiod, REIT returns do not significantly affect REIT flows in any of the VAR model specifications. Simultaneously, REIT capital flows do appear to have a significant influence on equity REIT returns.     

Changes in REIT Structure and Stock Performance: Evidence from the Monday Stock Anomaly

It is well documented that REITs in the 1990s experienced significant changes in their structure and attracted greater institutional participation. This article finds that REIT stocks with higher institutional holdings perform better on Monday than REITs with lower institutional holdings during the 1990s, but not in the 1980s. Furthermore, REITs that went public in the 1990s are the ones associated with the shift in the Monday return pattern. Our study supports the claim that the change in REIT structure and the increase in institutional participation in the REIT market in the 1990s make REIT stocks behave more like other equities in the stock market.     

Capital Structure Theory: Evidence from European Property Companies' Capital Offerings

This study examines the stock price reactions on announcements of both equity and debt offerings by European property companies. The unique setting in which corporate tax rates vary between different countries enables us to test established theories in the field of capital structure. In accordance with theory, we find a negative price reaction on equity offering announcements, which is less severe for low-tax countries and positive price reactions on the announcements of debt offerings. Besides tax arguments, we also test alternative explanations by analyzing variations in stock reactions based on differences in the relative size of the issue, the pre-offer leverage, the underlying property types, and operational performance. The results show that corporate taxation, issue size, and operational performance are significant explanatory factors in the negative price reactions.     

企业智力资本与企业资本结构优化

在新经济环境下，如何有效地利用和管理智力资本已成为创造企业竞争优势的重要手段之一。本文试图从智力资本的构成及其综合财务度量指标入手，建立在权衡智力资产创造企业价值的激励制度下的资本结构优化分析模型，通过这个模型的分析和简要案例的剖析得到结论：应用智力资产贡献率和贡献增长率指标在一定程度上可以度量智力资本的贡献；适宜的智力资产贡献激励能够促使代理人优化资本结构；在考虑智力资产贡献激励情况下，企业代理人会寻找更有效的手段（如资产负债综合重组优化）来优化企业资本结构。     

REIT Asset Sales: Opportunistic Versus Liquidation

This study provides novel evidence that the outcome from REIT sales of office and apartment property is signaled in the transaction price managers accept relative to the fundamental value. The identification strategy recognizes opportunistic sales as sold at prices above fundamental value. Opportunistic sales are followed by positive abnormal returns, measured relative to the market and associated benchmark indices. Assets sold below fundamental value are liquidated by firms with low profitability, low cash and low investment opportunities. Discounted transactions experience zero abnormal returns. Returns following asset sales are influenced by accounting measures, the flow of funds and financial constraints.     

Corporate Governance and Performance: The REIT Effect

Real estate investment trusts (REITs) offer a natural experiment in corporate governance due to the fact that they leave little free cash flow for management, which reduces agency problems. We exploit a unique and leading corporate governance database to test whether corporate governance matters for the performance of U.S. REITs. We document for a sample including governance ratings of more than 220 REITs that firm value is significantly related to firm-level governance for REITs with low payout ratios only. Repeating the analysis with the complete database that includes more than 5,000 companies and a control sample of firms with high corporate real estate ratios, we find a strong and significantly positive relation between our governance index and several performance variables, indicating that the partial lack of a relation between governance and performance in the real estate sector might be explained by a REIT effect.     

人力资本经营者财务:一个理论构架

根据两权分离的变异和人力资本的质态特征，笔者在本文中首次提出了人力资本经营者财务论，阐述了人力资本经营者财务的五大特点、四个职能和五个方面的内容，并分析了人力资本财务的分层结构，试图为人力资本经营者财务构建一个理论框架。     

多元资本结构在中国企业的实证研究

随着资本概念的多元化,相对于企业组织和市场配置方式而言,网络化配置更适应于现代经济生活中的资本概念。资本的网络化配置产生了资本网络系统,并使得资本结构从一元结构的优化转变为多元结构的优化。本文分析了各资本要素之间的因果关系,并利用结构化方程进行了实证检验。其结论有:财务资本对于人力资本存在投资转化作用;智力资本三要素之间存在着相互转化作用;财务资本和智力资本共同耦合创造企业价值。     

Focus, Transparency and Value: The REIT Evidence

We trace the effects of corporate focus by examining the relationships among focus, cash flows and firm value. In contrast to past studies that examine the effects of diversifying across SIC-code-defined industries, we show that diversification, even within a single industry, reduces value. Our evidence, drawn from a panel of real estate investment trusts, indicates that this reduction is not due to poor managerial performance. Project-level cash flows are actually higher for less focused firms. However, these gains are offset by higher management, administrative and interest expenses. Thus, the corporate cash flows available to shareholders are not related to focus. Finally, we provide empirical evidence that links the effect of focus on value to informational asymmetries which cause the equity of diversified firms to be less liquid. We attribute some of the effect of focus on the cost of both debt and equity to informational asymmetries or transparency costs.     

Capital Structure and the Cost of Capital for Untaxed Firms: The Case of REITs

REITs offer the opportunity to examine the relationship between capital structure and cost of capital in the absence of corporate earnings taxes. The evidence supports the leverage clientele effect as the motivation for the use of financial leverage by REITs.     

Rationale behind IPO Underpricing: Evidence from Asian REIT IPOs

This article examines the rationale behind IPO underpricing using a sample of REIT IPOs in Asia. Although the IPOs registered an average initial return of 3.08%, the issuers were able to sell the IPO shares above their fundamental values by timing the listings in periods when existing REIT stocks are traded at a premium to their net asset values (NAV). An IPO could therefore be underpriced and yet produce a net gain for the issuer. The issuers’ net gain from IPO is, however, negatively related to long‐run performance of REIT IPOs.     

Capital Structure Decisions in Real Estate Investment

This study examines the financing decisions of real estate investors and the choice of capital structure when acquiring income-producing properties. Drawing from the literature in finance and real estate, we develop a capital structure model for real estate investment and derive six hypotheses regarding the relationship of the overall loan-to-value ratio chosen by an investor to selected characteristics of the investment. The hypotheses are then tested using financing data from a sample of apartment and commercial transactions over a fifteen-year period in a specific real estate market. The empirical findings strongly support the importance of depreciation deductions, financial distress costs, capital constraints, tax rates, and interest rates as determinants of the capital structure of real estate investors.     

Asset Pricing Information in Vintage REIT Returns: An Information Subset Test

REIT return data prior to the new REIT era offer important asset pricing information. At issue is whether empiricists should focus attention on returns series covering only the new period. We use a generalized asset pricing and information subset test to disentangle REIT information from information available in several benchmark series. Results indicate that REIT returns are informative about the discounting process during the pre–new-era period. Thus, the distribution of vintage REIT returns is not fully explained by either broad market indexes or from size-based anomalies. This study should be viewed as a useful empirical precedent for those studying REIT data preceding the new REIT era.     

Short Sales and Fundamental Value: Explaining the REIT Premium to NAV

This study explores the role of short sale constraints in explaining the variation in premiums to Net Asset Value (NAV) in REIT pricing. We use proprietary information on short sales between June 2006 and September 2008 to examine how short sales and short sale constraints affect the variation in monthly REIT NAV premiums using panel vector autoregression models. We find that variation in short sale activity across individual REITs can account for at least one‐third of the variation in NAV premiums. Short sale constraints tend to be binding when there is strong demand and limited supply of shares to short. Excess demand leads to overvaluation and the correction of the overvaluation explains the under‐performance of premium REITs.     

Finance, Investment and Investment Performance: Evidence from the REIT Sector

We examine financing, investment and investment performance in the equity REIT sector over the 1981–1999 time period. Analysis reveals significant differences between the old-REIT (1981–1992) and new-REIT (1993–1999) eras. The sector experienced rapid growth in the new-REIT era, primarily from firm-level investment as opposed to new entry. Firm-level investment was largely financed by equity and long-term debt, with little reliance on retained earnings. Financing policy stabilized in the new-REIT era, and capital structures became more complex. We find that REITs provided returns over and above their cost of capital, where most of the value-added investment occurred in the new-REIT era by newer firms. Finally, we present novel evidence on IPO activity and new firm investment–investment performance relations that is consistent with Tobin's q theory of investment.     

REIT Leverage and Return Performance: Keep Your Eye on the Target

This article examines U.S. REIT leverage decisions and their effects on risk and return. We find that the speed at which REITs close the gap between current debt levels and target leverage levels is 17% annually. REITs that are highly levered relative to the average REIT tend to underperform REITs with less debt in their capital structure. However, REITs that are highly levered relative to their target leverage tend to perform better on a risk‐adjusted basis than under‐levered REITs. Taken together, our results show that REIT leverage has significant return performance effects conditional on deviations from target leverage.