The Financial Performance of REITs Following Initial Public Offerings
This study examines changes in operating performance among real estate investment trusts following an initial public offering (IPO). The purpose is to determine whether there is an enhancement in the value of the underlying asset that is related to the IPO. We separately analyze equity, mortgage and diversified REITs. We also compare the operating performance of recent IPOs to those of earlier years to address the impact of the 1993 Revenue Reconciliation Act on institutional investorsâ€™ demand for REIT stock. Unlike previous analyses of industrial firms, REITs were found to have significant increases in Return on Assets and selected measures of financial performance. The post-IPO cumulative stock price decline and recovery is illustrated.
Volume (Year): 16 (1998)
Issue (Month): 3 ()
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- Lynne B. Sagalyn, 1990. "Real Estate Risk and the Business Cycle: Evidence from Security Markets," Journal of Real Estate Research, American Real Estate Society, vol. 5(2), pages 203-220.
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Rodney L. White Center for Financial Research Working Papers
11-94, Wharton School Rodney L. White Center for Financial Research.
- Joseph Gyourko & Edward Nelling, 1996. "Systematic Risk and Diversification in the Equity REIT Market," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 24(4), pages 493-515.
- Ritter, Jay R, 1984. " Signaling and the Valuation of Unseasoned New Issues: A Comment," Journal of Finance, American Finance Association, vol. 39(4), pages 1231-37, September.
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