An Analysis of the Acquisition and Disposition of Real Estate Assets

This research studies the acquisition and disposition of real estate assets by non-real estate firms from 1981 through 1986. Contrary to previous studies of real estate assets, we find no abnormal performance associated with the buyers of real estate assets and only weak evidence of excess returns for sellers. When combining our results with previous work, we conclude that real estate assets themselves offer the market no unique opportunity to earn excess return. However, it appears that selected organizational forms may be preferred for managing some real estate assets. Thus, when the acquisition or disposition of a realty asset has no change in the management structure of the assets, as in this study, no excess return is found. Our study is limited by the relatively small number of sellers available for analysis.