IDEAS home Printed from https://ideas.repec.org/p/arz/wpaper/eres2006_301.html
   My bibliography  Save this paper

Open End Real Estate Funds - Diamonds Or Danger?

Author

Listed:
  • Steffen Sebastian
  • Marcel Tyrell

Abstract

Open end funds for private investors offer in general daily redemption of outstanding shares. A high liquidity of shares is in sharp contrast to the illiquidity of real estate. Therefore, the typical construction for real estate funds which are designed for a broader public is closed ended. Attempts to establish open end funds have regularly let to crises comparable to bank runs, e.g. the RODAMCO case in the Netherlands, or the actual crisis of German open end funds. Liquidity transformation as a typical function of banks also bears inevitably to the danger of bank runs. Therefore we offer a framework based on the recent works in bank theory of Diamond/Dybvig 1983, Allen/Gale1998, and Diamond/Rajan 2001 which examine whether open end funds can represent a stable investment design for real estate. Furthermore we show that the open end construction delivers a monitoring function with respect to the fund managers. Full paper available at www.real-estate-finance.de.

Suggested Citation

  • Steffen Sebastian & Marcel Tyrell, 2006. "Open End Real Estate Funds - Diamonds Or Danger?," ERES eres2006_301, European Real Estate Society (ERES).
    • Handle: RePEc:arz:wpaper:eres2006_301
    as

    Download full text from publisher

    File URL: https://eres.architexturez.net/doc/oai-eres-id-eres2006-301
    Download Restriction: no
    ---><---

    Citations

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


    Cited by:

    1. Philipp Gerlach & Raimond Maurer, 2020. "The Growing Importance of Secondary Market Activities for Open-end Real Estate Fund Shares in Germany," Schmalenbach Business Review, Springer;Schmalenbach-Gesellschaft, vol. 72(1), pages 65-106, February.
    2. repec:zbw:rwirep:0454 is not listed on IDEAS
    3. Thomas L. Hogan & William J. Luther, 2016. "The Implicit Costs of Government Deposit Insurance," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 31(Summer 20), pages 1-13.
    4. Stein, Michael, 2013. "German Real Estate Funds – Changes in Return Distributions and Portfolio Favourability," Ruhr Economic Papers 454, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    5. Sebastian Schnejdar & Michael Heinrich & René-Ojas Woltering & Steffen Sebastian, 2017. "The Discount to NAV of distressed German open-ended real estate funds," ERES eres2017_160, European Real Estate Society (ERES).
    6. Christian Weistroffer & Steffen Sebastian, 2015. "The German Open-End Fund Crisis – A Valuation Problem?," The Journal of Real Estate Finance and Economics, Springer, vol. 50(4), pages 517-548, May.
    7. Michael Stein, 2013. "German Real Estate Funds – Changes in Return Distributions and Portfolio Favourability," Ruhr Economic Papers 0454, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.

    More about this item

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arz:wpaper:eres2006_301. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Architexturez Imprints (email available below). General contact details of provider: https://edirc.repec.org/data/eressea.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.