Rushing to Overpay: Modeling and Measuring the REIT Premium

Akin, S. Nuray; Lambson, Val E.; McQueen, Grant Richard; Platt, Brennan C.; Slade, Barrett A.; Wood, Justin

doi:10.1007/s11146-012-9372-1

Cited by 4 publications

(13 citation statements)

References 37 publications

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“…For instance, institutional real estate investors may have been more prominent in buying land during the recession compared with private buyers. Some evidence has shown that institutional investors, with a cost of capital advantage, may outbid other market participants for real estate (seeAkin et al, 2013).…”

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confidence: 99%

Big‐Box Stores and Urban Land Prices: Friend or Foe?

Slade

2017

Real Estate Economics

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This study examined the effect of a new Walmart store on nearby U.S. urban land prices and found that, within one quarter mile of a new Walmart store locale, land prices increased by almost 39% over the four‐year development time period. Supercenters and commercial land sales were instrumental in driving the positive price effects. Robustness tests found a positive land price effect with other big‐box stores, suggesting that the land price effect was not limited to Walmart stores, but in fact, was a big‐box store effect.

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confidence: 99%

Big‐Box Stores and Urban Land Prices: Friend or Foe?

Slade

2017

Real Estate Economics

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“…Several studies provide evidence of a clientele effect for REITs, who appear to pay significantly higher prices for acquisitions in the property market (Hardin and Wolverton , Lambson, McQueen and Slade , Ling and Petrova , Akin et al . ). For an individual firm, such behavior is puzzling.…”

Section: Introductionmentioning

confidence: 97%

“…REITs uphold a preference for acquiring institutional‐grade, newer and larger commercial properties (Akin et al . )—a cohort of the market that is especially thin. Yet, REIT buyers represent a nontrivial component of institutional‐grade commercial property transactions, ranging from 12% to 26% for the property types considered in this study.…”

Section: Introductionmentioning

confidence: 99%

“…Akin et al . () estimate the premium paid by REITs to be 30% for commercial real estate after controlling physical property characteristics. Yet, when a repeat‐sales approach is applied, the estimated premium reduces to 6.4%.…”

Section: Introductionmentioning

confidence: 99%

“…According to Akin et al . (), a REIT has essentially one year to deploy new capital into real estate holdings, or jeopardize REIT status. However, REITs can and often do use new capital raised for financing purposes, such as capital restructurings.…”

Section: Introductionmentioning

confidence: 99%

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NAV Premiums & REIT Property Transactions

Kim

Wiley

2018

Real Estate Economics

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This study explores the outcome for REIT investment in response to NAV premiums considering (1) the volume of acquisition activity, and (2) relative prices paid for individual assets. Regarding the first, we provide evidence that REIT managers increase real estate investment following positive changes in NAV premiums. Regarding the second, we use a large sample of transactions for retail, office and multifamily property and find that REITs appear to pay significantly higher prices relative to other investors. Transaction prices paid by REIT managers for all three property types are positively and significantly affected by market-wide NAV premiums.

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A green winner's curse? Investor behavior in the market for eco-certified office buildings

2017

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This paper contributes to the growing literature on the economics of green buildings: by merging auction theory and hedonic regression analysis we investigate the relationship between market concentration and price premiums in the American market for eco-certified real estate assets. Auction theory is used to model price formation where eco-investors may differ in their valuation of assets. Controlling for a large number of features, the empirical results provide evidence of a significant and positive relationship between investors' eco-certified market share and prices of eco-certified space. Contributing to the recent debate over the nature of the green premium, we find that eco-investors are creating clientele effects and that they may be subject to a green winner's curse.

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Rushing to Overpay: Modeling and Measuring the REIT Premium

Cited by 4 publications

References 37 publications

Big‐Box Stores and Urban Land Prices: Friend or Foe?

Big‐Box Stores and Urban Land Prices: Friend or Foe?

NAV Premiums & REIT Property Transactions

A green winner's curse? Investor behavior in the market for eco-certified office buildings

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