Stock Price and Management Changes: The Case of REITs

This paper examines the relationship between a Real Estate Investment Trust's (REIT's) stock returns and top management changes. The results indicate an inverse relationship between the probability of a management change and a REIT's recent stock price performance. This is consistent with internal monitoring of management activities by the board of directors, other top managers, or large block shareholders.     

Real Estate and Economies of Scale: The Case of REITs

Building on past research in the economies-of-scale debate, we test for scale economies in real estate investment trusts (REITs) by examining growth prospects, revenue and expense measures, profitability ratios, systematic risk and capital costs. Overall, we find that large REITs are increasing growth prospects while succeeding at lowering costs, leading to a direct relationship between firm profitability and firm size. Additionally, we find an inverse relationship between equity betas and firm size, and for all cost of capital measures we find significant scale economies. Further evidence from the stochastic frontier analysis suggests efficiency opportunities appear possible through continued growth and consolidation in REITs.     

Ownership Dynamics with Multiple Insiders: The Case of REITs

We study ownership dynamics of multiple strategic risk-averse insiders facing a moral hazard problem. We show that, when insiders cannot commit,  ex ante , to an ownership policy, the aggregate insider stake gradually declines toward the competitive market allocation. Both the speed of adjustment and the long-term equilibrium aggregate insider ownership level are greater for companies with a larger number of insiders,  ceteris paribus . Using data from U.S. real estate investment trusts, we then test the model and find that the predictions of the model are verified empirically.     

保障性住房融资中运用REITs的探讨

目前我国保障性住房面临着资金瓶颈问题,这是制约保障性住房供给的重要因素之一,借鉴房地产投资信托基金(REITs)有助于解决这一问题.文章借鉴中国香港、美国和新加坡等国家的REITs运作经验,探讨了在我国保障性住房建设中运用REITs的可能性和条件,以及运作模式.在此基础上分析了在我国金融和房地产市场现状下发展保障性住房REITs存在的问题,提出了相应的对策.     

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.     

我国电网企业融资方式及相关问题探讨

针对电力体制改革过程中电网企业资金困难,重点分析了电网企业融资障碍,提出了适合电网企业的融资方式,最后对电网企业融资实现及创新提出了建议。     

The Information Content of Method of Payment in Mergers: Evidence from Real Estate Investment Trusts (REITs)

We provide evidence on the information content of the method of payment in mergers by examining shareholder returns in a sample of REIT mergers over the period 1994–1998. When the target firm is publicly held, we find that transactions are always stock-financed, and that acquiring firm shareholders sustain small negative returns around the announcement date. When the target is privately held, cash financing, mixed (stock and cash) financing, and placement of blocks of acquirer stock with target owners are more prevalent. Acquirer returns are positive in stock-financed mergers when the target is private, which is consistent with both the information signaling and monitoring by blockholders hypotheses. Further analysis supports the information signaling hypothesis as the dominant explanation. The effects of other explanatory variables are similar whether the target is public or private. Most significantly, acquiring shareholder returns are negatively related to the acquirer's size, but positively related to the acquirer's use of the UPREIT organizational structure. The positive wealth effects of the UPREIT structure are not fully explained as the capitalization of tax benefits.     

The Pricing of Seasoned Equity Offerings: Evidence from REITs

Real estate investment trusts (REITs) have been a very active sector in the capital market over the last few years. This paper examines the pricing of seasoned equity offers by equity REITs during 1991–1996. Consistent with Parsons and Raviv's model, we find that SEOs by REITs are underpriced with respect to both the closing price on the day before and the closing price on the day of the offer. Underpricing depends on the institutional ownership of the firm's common stock. Issues by firms with higher institutional ownership are more underpriced for post-1990 REITs. Further, consistent with the notion that theories of IPO pricing apply to SEOs as well, the underpricing of SEOs is a function of the issue size and of the underwriter's reputation.     

The Ex–Dividend Pricing of REITs

Past studies have shown that ex–dividend stock prices are not fully reflective of dividend payments. A tax–induced clientele effect and micromarket limitations in stock pricing have been used to explain this pricing anomaly. This study focuses on the ex–dividend behavior of real estate investment trusts (REITs). Due to a low correlation between dividend size and dividend yield, REITs permit a cleaner examination of a tax–induced clientele effect. The results indicate that tick constraints in pricing ex–dividend stocks create the appearance of a tax–induced clientele effect in REITs when none should exist.     

浅谈中小企业融资问题——以潍坊市中小企业融资为例

中小企业融资难问题是世界各国普遍关注的问题,在我国由于长期的"抓大放小"政策,中小企业发展缓慢,管理不健全,信用不佳,难以融资。而资金不足,又限制了企业发展。经过银行业体制改革和金融危机的冲击,融资难更成为中小企业发展瓶颈。本文主要以潍坊为例,分析了融资难的问题,并提出了与当地实际相符的解决方案。     

The Wealth Effects of Property Acquisitions: Evidence from Japanese and Singaporean REITs

This article examines the wealth effects of 228 property acquisition announcements made by REITs publicly traded in Singapore and Japan, which are the two largest REIT markets in Asia. Adopting an aggressive growth‐by‐acquisition strategy, the newly listed REITs acquired a number of properties within a short time period. Despite their regular activities, we observe the acquisition announcements are associated with a significantly positive abnormal increase in shareholder wealth averaging 0.38% in a 5‐day window around the event date. Controlling for the method of payment, buyer's acquisition strategy and seller's relationship with the acquiring REIT, the regression results show that the likely sources of economic gains associated with acquisitions are economies of scale and better management by acquiring firms. We also find strong evidence that the market reacts less favorably to acquisitions involving a portfolio of properties as opposed to a single property and weaker evidence that it reacts less favorably to mixed‐use acquisitions. These findings suggest the presence of premiums on transparency and corporate focus.     

Asset Growth and Stock Performance: Evidence from REITs

In this article, we examine the impact of asset growth rates on the future stock performance of 308 publicly traded real estate investment trusts (REITs). We observe that fast‐growing REITs tend to underperform slow growing REITs. However, we find evidence that the growth effect is significantly less negative for REITs selling at a premium to net asset value. In addition, we observe the asset growth effect only in the subsample of REITs that engages in equity issuance over the next 12 months. The combined evidence suggests contemporaneous equity dilution, which has not been considered in previous studies, may provide an explanation for the underperformance of fast‐growing firms.     

建筑工程项目业主与监理的信息不对称分析

运用委托——代理理论，对工程建设市场上业主与监理之间的信息不对称问题进行了分析，以完善建筑工程项目监理制度，在此基础上，提出了解决招投标阶段和合同履约阶段信息不对称问题的办法。     

Elective Stock Dividends and REITs: Evidence from the Financial Crisis

In response to the recent financial crisis, the U.S. Government introduced new rules which allow Real Estate Investment Trusts (REITs) to issue elective stock dividends (ESDs), i.e., noncash dividends, to satisfy their distribution requirements. The purported goal of these rules was to provide temporary relief to REITs facing cash flow problems. We investigate how the introduction of these rules affects dividend policy of REITs. Surprisingly, we document that only 17 REITs chose to issue elective stock dividends. We examine the characteristics of these REITs and find that their cash flows are similar to REITs that do not select these dividends. This suggests that cash flow problems are unlikely to be the primary determinant of the ESD issuance decision. Instead, our findings indicate the decision to pay ESDs is related to the level of loans that are close to maturity, REIT size, growth prospects and poor performance during the financial crisis. Furthermore, we find that the same factors determine the ratio, amount and frequency of stock dividends issued by these REITs. We also examine the response of shareholders to ESDs announcements and find positive abnormal returns surrounding these dividend announcements.     

Risk and Return on Real Estate: Evidence from Equity REITs

We analyze monthly returns on an equally weighted index of eighteen to twenty-three equity (real property) real estate investment trusts (REITs) that were traded on major stock exchanges over the 1973–87 period. We employ a multifactor Arbitrage Pricing Model using prespecified macroeconomic factors. We also test whether equity REIT returns are related to changes in the discount on closed-end stock funds, which seems plausible given the closed-end nature of REITs.
Three factors, and the percentage change in the discount on closed-end stock funds, consistently drive equity REIT returns: unexpected inflation and changes in the risk and term structures of interest rates. The impacts of these variables on equity REIT returns is around 60% of the impacts on corporate stock returns generally. As expected, the impacts are greater for more heavily levered REITs than for less levered REITs. Real estate, at least as measured by the return performance of equity REITs, is less risky than stocks generally, but does not offer a superior risk-adjusted return and is not a hedge against unexpected inflation.     

Publication of Information and Market Response: The Case of Airline on Time Performance Reports

This paper investigates market response to publication of on time performance information. Theory suggests that reduction in search costs generates more honest airlines and better quality service, a distribution of price-quality bundles, increased demand, exit by inefficient airlines and reduction of price rigidity. An ARIMA study of U.S. domestic airline operations finds that after publication of performance information the market generated better performance, increased quality distribution, enhanced demand, exit by four of fourteen airlines and reduced price-quality rigidity. Publication of information may improve performance in markets characterized by asymmetric information and high search costs.     

The Sources of Risk Spillovers among U.S. REITs: Financial Characteristics and Regional Proximity

In this article, we estimate the risk spillovers among 74 U.S. Real Estate Investment Trusts (REITs) using the state‐dependent sensitivity value‐at‐risk approach. This methodology allows for the quantification of the spillover size as a function of a company's financial condition. We show that the size of risk spillovers is more than twice as large when REITs are in financial distress and find evidence for the impact of geographical proximity. Our results provide new insights concerning the relevance of geographical diversification for REITs and have important implications for the investment and risk management decisions of real estate investors, mortgage lenders, home suppliers and policy makers.     

Financial Flexibility and Manager–Shareholder Conflict: Evidence from REITs

Using equity Real Estate Investment Trust 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.     

Inside Ownership, Risk Sharing and Tobin's q-Ratios: Evidence from REITs

We investigate relations among inside ownership, managerial expenses, risk sharing and equity valuations. Our engine of analysis—Real Estate Investment Trusts (REITs)—provides a unique and rich framework for analysis since we can calculate extremely accurate measures of asset replacement costs, and hence relative valuation (Tobin's q ). Further, the nature of the financial statements allows us to examine the impact of insider ownership on agency costs since we can accurately measure the costs of the entire management team. Our results show that firms with greater insider holdings tend to invest in assets with lower systematic risk and use less debt in their capital structure. At the same time, managerial expenses are lower as inside ownership increases. Finally, higher levels of insider ownership are associated with higher relative valuation as measured by both higher premiums to net asset value and higher multiples of cash flows. The results have implications for the design of optimal management contracts for both REITs and firms in general.     

Industrial tail exposure risk and asset price: Evidence from US REITs

In this study, we investigate the impact of industry-based tail dependence risk on the cross-section of stock returns. To this end, we propose a novel tail risk dependence measure (industrial tail exposure risk [ITER]), which captures the tail risk exposure of individual stocks to multiple industries. Using US equity real estate investment trusts (REITs) data from 1993 to 2020, we document that stocks in the highest ITER portfolio outperform stocks in the lowest ITER portfolio by 8.40% per annum. This positive return spread is significant even after controlling for well-known firm characteristics. The return premium of ITER is stronger for small, value, and highly levered stocks and is substantially high during recession periods. Finally, the effects of ITER are cross-sectionally more associated with REITs that have greater degrees of the following factors: bivariate tail exposure risks of major industries, exposure to local industry tail risk, geographical concentration, and ownership of home-biased investors. Overall, our results suggest that REIT investors are indeed averse to tail risks that are associated with various sectors.