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The Impact of REIT Ratings on Stock Price and Shareholder Wealth


  • Klaus S. Beckmann

    () (University of Texas-Pan American, 1201 W. University Drive BA-120H, Edinburg,)

  • ChanghaJin

    () (Hanyang University, AnsanKyunggi-do, South Korea 426-791)


We have analyzed the market reaction to REIT preferred stock ratings announced by Moody's Investors Service from 1999 to 2009 that are related to four types of rating events; first time ratings, outlook changes, reviews and actual rating changes. The results suggest a significant market reaction to rating upgrades of 1.08% abnormal return, and downgrades and negative outlooks of -2.28% and -2.67% abnormal returns, respectively. Compared to the non-REIT literature, the abnormal returns are smaller in magnitude which implies a relatively smaller information asymmetry within the REIT market with diversification opportunities for global investors.

Suggested Citation

  • Klaus S. Beckmann & ChanghaJin, 2013. "The Impact of REIT Ratings on Stock Price and Shareholder Wealth," International Real Estate Review, Asian Real Estate Society, vol. 16(2), pages 134-146.
  • Handle: RePEc:ire:issued:v:16:n:02:2013:p:134-146

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    More about this item


    REITs; Preferred Stock Rating; Information Asymmetry; Asset Pricing; Investment Strategy;

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services


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