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Equity REIT Property Acquisitions: Do Apartment REITs Pay a Premium?

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Author Info
William G. Hardin, III () (Mississippi State University Mississippi State, MS 39762-9580)
Marvin L. Wolverton () (Washington State University Pullman, WA 99164)
Abstract

Negotiation theory and implied agency costs provide the foundation for the research hypothesis that equity real estate investment trusts (EREITs) may have paid premiums when making real property acquisitions during the 1990s REIT boom. Using a simultaneous equations model and data from the Atlanta, Phoenix and Seattle apartment markets, this research finds that apartment EREITs have paid above market prices for property acquisitions. In Atlanta, a 26.1% premium was evident; in Phoenix, a 27.5% premium was evident; while in Seattle, a premium was not evident. At the property level, the returns to EREITs and private sector or non-securitized investors may differ substantially.

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File URL: http://aux.zicklin.baruch.cuny.edu/jrer/papers/pdf/past/vol17n01/v17p113.pdf
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Publisher Info
Article provided by American Real Estate Society in its journal Journal of Real Estate Research.

Volume (Year): 17 (1999)
Issue (Month): 1 ()
Pages: 113-126
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:jre:issued:v:17:n:1:1999:p:113-126

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Postal: American Real Estate Society Clemson University School of Business & Behavioral Science Department of Finance 401 Sirrine Hall Clemson, SC 29634-1323
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Postal: Diane Quarles American Real Estate Society Manager of Member Services Clemson University Box 341323 Clemson, SC 29634-1323
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Find related papers by JEL classification:
L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Brent W. Ambrose & Esther Ancel & Mark D. Griffiths, 1992. "The Fractal Structure of Real Estate Investment Trust Returns: The Search for Evidence of Market Segmentation and Nonlinear Dependency," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 20(1), pages 25-54. [Downloadable!] (restricted)
  2. Halvorsen, Robert & Palmquist, Raymond, 1980. "The Interpretation of Dummy Variables in Semilogarithmic Equations," American Economic Review, American Economic Association, vol. 70(3), pages 474-75, June. [Downloadable!] (restricted)
  3. Fred A. Forgey & Ronald C. Rutherford & Michael L. VanBuskirk, 1994. "Effect of Foreclosure Status on Residential Selling Price," Journal of Real Estate Research, American Real Estate Society, vol. 9(3), pages 313-318. [Downloadable!]
  4. Michael T. Bond & James R. Webb, 1995. "Real Estate versus Financial Asset Returns and Inflation: Can a P* Trading Strategy Improve REIT Investment Performance?," Journal of Real Estate Research, American Real Estate Society, vol. 10(3), pages 327-334. [Downloadable!]
  5. Joseph Gyourko & Donald B. Keim, . "What Does the Stock Market Tell Us About Real Estate Returns? (Revision of 18-91) (Reprint 030)," Rodney L. White Center for Financial Research Working Papers 11-92, Wharton School Rodney L. White Center for Financial Research.
  6. William G. Hardin, III & Marvin L. Wolverton, 1996. "The Relationship between Foreclosure Status and Apartment Price," Journal of Real Estate Research, American Real Estate Society, vol. 12(1), pages 101-109. [Downloadable!]
  7. Daniel C. Quan & John M. Quigley, 1989. "Inferring an Investment Return Series for Real Estate from Observations on Sales," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 17(2), pages 218-230. [Downloadable!] (restricted)
  8. Joseph Gyourko & Donald B. Keim, 1992. "What Does the Stock Market Tell Us About Real Estate Returns?," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 20(3), pages 457-485. [Downloadable!] (restricted)
  9. Thomas M. Carroll & Terrence M. Clauretie & Helen R. Neill, 1997. "Effect of Foreclosure Status on Residential Selling Price: Comment," Journal of Real Estate Research, American Real Estate Society, vol. 13(1), pages 95-102. [Downloadable!]
  10. Liu, Crocker H & Mei, Jianping, 1992. "The Predictability of Returns on Equity REITs and Their Co-movement with Other Assets," The Journal of Real Estate Finance and Economics, Springer, vol. 5(4), pages 401-18, December.
  11. Liu, Crocker H, et al, 1990. "The Integration of the Real Estate Market and the Stock Market: Some Preliminary Evidence," The Journal of Real Estate Finance and Economics, Springer, vol. 3(3), pages 261-82, September.
  12. Jun Han & Youguo Liang, 1995. "The Historical Performance of Real Estate Investment Trusts," Journal of Real Estate Research, American Real Estate Society, vol. 10(3), pages 235-262. [Downloadable!]
  13. John Quigley, 2006. "Urban Economics," Berkeley Program on Housing and Urban Policy, Working Paper Series 1072, Berkeley Program on Housing and Urban Policy. [Downloadable!]
  14. James R. Follairi, 1989. "Inferring an Investment Return Series for Real Estate from Observations on Sales," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 17(2), pages 231-234. [Downloadable!] (restricted)
  15. Joseph L. Pagliari, Jr. & James R. Webb, 1995. "A Fundamental Examination of Securitized and Unsecuritized Real Estate," Journal of Real Estate Research, American Real Estate Society, vol. 10(4), pages 381-426. [Downloadable!]
  16. James D. Shilling & John D. Benjamin & C.F. Sirmans, 1990. "Estimating Net Realizable Value for Distressed Real Estate," Journal of Real Estate Research, American Real Estate Society, vol. 5(1), pages 129-140. [Downloadable!]
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. John D. Benjamin & Peter Chinloy & William G. Hardin III, 2007. "Institutional-Grade Properties: Performance and Ownership," Journal of Real Estate Research, American Real Estate Society, vol. 29(3), pages 219_240. [Downloadable!]
  2. Fayez A. Elayan & Thomas O. Meyer & Jingyu Li, 2006. "Evidence from Tax-Exempt Firms on Motives for Participating in Sale-Leaseback Agreements," Journal of Real Estate Research, American Real Estate Society, vol. 28(4), pages 381-410. [Downloadable!]
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