Advanced Search
MyIDEAS: Login

Is Value-Added and Opportunisitc Real Estate Investing Beneficial? If So, Why?

Contents:

Author Info

  • James D. Shilling

    ()
    (DePaul University)

  • Charles H. Wurtzebach

    ()
    (DePaul University)

Registered author(s):

    Abstract

    There has been a great deal of interest in the question of whether value-added and oppor- tunistic real estate investing has resulted in appropriate risk-adjusted returns. However, a satisfactory answer to this question has not been agreed upon. In this paper, data from the National Council of Real Estate Investment Fiduciaries (NCREIF) property database are examined to bring new evidence to bear on the subject. Using these data, ex post returns are calculated for all sold properties. Then groups are formed based on these returns. A series of discriminant functions are then estimated to relate mem- bership in these groups over time to value-added and opportunistic indicator variables (i.e., risk exposures) and market conditions. Results demonstrate that while value-added and opportunistic private equity real estate investments have higher returns than core investments, their superior returns are driven primarily by market conditions and the use of cheap debt rather than by risk exposure.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://aux.zicklin.baruch.cuny.edu/jrer/papers/pdf/new_current/vol34n04/01.429_462.pdf
    File Function: Full text
    Download Restriction: no

    Bibliographic Info

    Article provided by American Real Estate Society in its journal journal of Real Estate Research.

    Volume (Year): 34 (2012)
    Issue (Month): 4 ()
    Pages: 429-462

    as in new window
    Handle: RePEc:jre:issued:v:34:n:4:2012:p:429-462

    Contact details of provider:
    Postal: American Real Estate Society Clemson University School of Business & Behavioral Science Department of Finance 401 Sirrine Hall Clemson, SC 29634-1323
    Email:
    Web page: http://www.aresnet.org/

    Order Information:
    Postal: Diane Quarles American Real Estate Society Manager of Member Services Clemson University Box 341323 Clemson, SC 29634-1323
    Email:
    Web: http://aux.zicklin.baruch.cuny.edu/jrer/about/get.htm

    Related research

    Keywords:

    Find related papers by JEL classification:

    References

    No references listed on IDEAS
    You can help add them by filling out this form.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Peter Chinloy & William Hardin & Zhonghua Wu, 2013. "Transaction Frequency and Commercial Property," The Journal of Real Estate Finance and Economics, Springer, vol. 47(4), pages 640-658, November.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:jre:issued:v:34:n:4:2012:p:429-462. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (JRER Graduate Assistant/Webmaster).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.