IDEAS home Printed from https://ideas.repec.org/a/eme/jpifpp/v26y2008i2p132-150.html
   My bibliography  Save this article

Real estate private equity: the case of US unlisted REITs

Author

Listed:
  • John Corgel
  • Scott Gibson

Abstract

Purpose - The purpose of this paper is to demonstrate how fixed‐share prices, as a structural flaw in private equity funds targeted to small‐unit investors, economically disadvantages those investors in favor of sponsors. Design/methodology/approach - The theoretical model incorporates fixed share prices with continuous investment opportunity and evaluates the wealth transfer from long‐term investors to marketing affiliates and soliciting dealers in the form of fees paid on the sale of shares to follow‐on investors. Findings - This result holds in the presence of high‐payout dividend policy that attempts to compensate for wealth transfer. Research limitations/implications - Should share prices be marked‐to‐market using real estate appraisals or another method, the unlisted REIT and related offerings, such as tenant‐in‐common funds, will be profitable for sponsors without economically disadvantaging long‐term investors. Practical implications - The findings from this research are useful to fund sponsors who design real estate investment products for small‐unit investors. These products may retain the advantageous characteristics of existing products while eliminating the disadvantageous features. Originality/value - This is the first academic research on private equity capital raised from small‐unit investors.

Suggested Citation

  • John Corgel & Scott Gibson, 2008. "Real estate private equity: the case of US unlisted REITs," Journal of Property Investment & Finance, Emerald Group Publishing Limited, vol. 26(2), pages 132-150, March.
    • Handle: RePEc:eme:jpifpp:v:26:y:2008:i:2:p:132-150
    DOI: 10.1108/14635780810857881
    as

    Download full text from publisher

    File URL: https://www.emerald.com/insight/content/doi/10.1108/14635780810857881/full/html?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://www.emerald.com/insight/content/doi/10.1108/14635780810857881/full/pdf?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1108/14635780810857881?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

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


    Cited by:

    1. Thomas Paul & Thomas Walther & André Küster-Simic, 2022. "Empirical analysis of the illiquidity premia of German real estate securities," Financial Markets and Portfolio Management, Springer;Swiss Society for Financial Market Research, vol. 36(2), pages 203-260, June.
    2. Dan W. French & Thibaut G. Morillon & Adam S. Yore & Andrew E. Kern, 2023. "The impact of exchange listing on corporate governance: Evidence from direct listings," The Financial Review, Eastern Finance Association, vol. 58(2), pages 197-234, May.
    3. Gianluca Marcato, 2018. "Liquidity Pricing of Illiquid Assets," ERES eres2018_215, European Real Estate Society (ERES).

    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:eme:jpifpp:v:26:y:2008:i:2:p:132-150. 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: Emerald Support (email available below). General contact details of provider: .

    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.