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Are REIT Investors Overly Optimistic after Equity Offerings?: Evidence from Analyst Forecast Errors

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  • Elizabeth Devos
  • Erik Devos
  • Seow Eng Ong
  • Andrew Spieler

Abstract

Optimism around Initial Public Offerings is well documented. However, Seasoned Equity Offerings are often surrounded by less optimism. Based on analyst forecast properties for a large number of REITs, we find that REIT analysts tend to be relatively optimistic after IPOs, whereas this tends not to be the case surrounding SEOs. Our results are more pronounced when REITs are bigger and have more analysts following them. Our results are robust for a number of multivariate specifications. Our findings suggest that possible underperformance of REITs after the IPO may be caused by over-optimistic stock markets.

Suggested Citation

  • Elizabeth Devos & Erik Devos & Seow Eng Ong & Andrew Spieler, 2017. "Are REIT Investors Overly Optimistic after Equity Offerings?: Evidence from Analyst Forecast Errors," ERES eres2017_129, European Real Estate Society (ERES).
    • Handle: RePEc:arz:wpaper:eres2017_129
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    Cited by:

    1. Elizabeth Devos & Erik Devos & Seow Eng Ong & Andrew C. Spieler, 2019. "Information Asymmetry and REIT Capital Market Access," The Journal of Real Estate Finance and Economics, Springer, vol. 59(1), pages 90-110, July.

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    More about this item

    Keywords

    Analyst Behavior; Ipo; Over-optimism; REIT; SEO;
    All these keywords.

    JEL classification:

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

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