IDEAS home Printed from https://ideas.repec.org/a/ire/issued/v16n022013p134-146.html
   My bibliography  Save this article

The Impact of REIT Ratings on Stock Price and Shareholder Wealth

Author

Listed:
  • Klaus S. Beckmann

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

  • ChanghaJin

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

Abstract

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
    as

    Download full text from publisher

    File URL: http://www.umac.mo/fba/irer/papers/past/vol16n2_pdf/01.pdf
    File Function: Full text
    Download Restriction: no

    References listed on IDEAS

    as
    1. Mark Shroder, 2001. "What Makes a Landlord? Ownership of Real Estate by US Households," Urban Studies, Urban Studies Journal Limited, vol. 38(7), pages 1069-1081, June.
    2. Hans Skifter Andersen, 2008. "Is the Private Rented Sector an Efficient Producer of Housing Service? Private Landlords in Denmark and their Economic Strategies," European Journal of Housing Policy, Taylor and Francis Journals, vol. 8(3), pages 263-286.
    3. Marietta Haffner & Marja Elsinga & Joris Hoekstra, 2008. "Rent Regulation: The Balance between Private Landlords and Tenants in Six European Countries," International Journal of Housing Policy, Taylor & Francis Journals, vol. 8(2), pages 217-233.
    4. Hans Skifter Andersen, 2008. "Is the Private Rented Sector an Efficient Producer of Housing Service? Private Landlords in Denmark and their Economic Strategies," International Journal of Housing Policy, Taylor & Francis Journals, vol. 8(3), pages 263-286.
    5. Gau, George W & Wang, Ko, 1994. "The Tax-Induced Holding Periods of Real Estate Investors: Theory and Empirical Evidence," The Journal of Real Estate Finance and Economics, Springer, vol. 8(1), pages 71-85, January.
    6. Gavin A. Wood & Yong Tu, 2004. "Are There Investor Clienteles in Rental Housing?," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 32(3), pages 413-436, September.
    7. Marietta Haffner & Marja Elsinga & Joris Hoekstra, 2008. "Rent Regulation: The Balance between Private Landlords and Tenants in Six European Countries," European Journal of Housing Policy, Taylor and Francis Journals, vol. 8(2), pages 217-233.
    8. Nordvik, Viggo, 2000. "Tenure flexibility and the supply of private rental housing," Regional Science and Urban Economics, Elsevier, vol. 30(1), pages 59-76, January.
    9. de Leeuw, Frank & Ekanem, Nkanta F, 1971. "The Supply of Rental Housing," American Economic Review, American Economic Association, vol. 61(5), pages 806-817, December.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

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

    JEL classification:

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

    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:ire:issued:v:16:n:02:2013:p:134-146. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (IRER Secretary Office/Webmaster). General contact details of provider: http://www.asres.org/ .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.