Leverage and Foreign Investment in U.S. Real Estate
Despite the large-scale purchase of U.S. real estate by foreign investors, empirical evidence has recently been offered that suggests that such investments may not be efficient for portfolio optimization. From the foreign perspective, free-floating exchange rates appear to introduce a level of risk to U.S. real estate assets that overrides any potential diversification benefits. For many years, corporate managers have borrowed in the home-country currency of their foreign assets to limit exchange risk exposure. This study investigates this strategy by examining the utility of U.S. dollar-denominated leverage to foreign investors in U.S. real estate. Specifically, efficient frontiers are constructed for British and Japanese investors to estimate the diversification gains available from including dollar-leveraged U.S. real estate in their respective investment portfolios.
Volume (Year): 7 (1992)
Issue (Month): 1 ()
|Contact details of provider:|| Postal: |
Web page: http://www.aresnet.org/
|Order Information:|| Postal: Diane Quarles American Real Estate Society Manager of Member Services Clemson University Box 341323 Clemson, SC 29634-1323|
Web: http://pages.jh.edu/jrer/about/get.htm Email:
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Elton, Edwin J & Gruber, Martin J & Padberg, Manfred W, 1976. "Simple Criteria for Optimal Portfolio Selection," Journal of Finance, American Finance Association, vol. 31(5), pages 1341-57, December.
- W. B. Brueggeman & A. H. Chen & T. G. Thihodeau, 1984. "Real Estate Investment Funds: Performance and Portfolio Considerations," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 12(3), pages 333-354.
When requesting a correction, please mention this item's handle: RePEc:jre:issued:v:7:n:1:1992:p:33-58. 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: (JRER Graduate Assistant/Webmaster)
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.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 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.