The Motivation for Institutional Real Estate Sales and Implications for Asset Class Returns |
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| Authors: | David Guilkey Mike Miles Rebel Cole |
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| Institution: | Economics Department, University of North Carolina, Chapel Hill, North Carolina 27514.;School of Business Administration, University of North Carolina, Carroll Hall 012 A, Chapel Hill, North Carolina 27514.;Federal Reserve Bank, Station K, 400 S. Akard, Dallas, Texas 75202. |
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| Abstract: | Since real estate assets are sold infrequently, analyses that use samples of exclusively sold properties to estimate pricing models may be seriously in error. This paper uses data on samples of sold and unsold properties and an appropriate statistical methodology to evaluate the extent of this bias. The results clearly show that it is important to control for sales motivations and that pricing equations that ignore this source of bias may be misleading. |
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