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Are REIT Investors Overly Optimistic after Equity Offerings?: Evidence from Analyst Forecast Errors

Author

Listed:
  • Elizabeth Devos

    (Eastern Michigan University, College of Business)

  • Erik Devos

    (College of Business Administration)

  • Seow Eng Ong

    (National University Singapore)

  • Andrew C. Spieler

    (Frank G. Zarb School of Business)

Abstract

Optimism around Initial Public Offerings is well documented. However, Seasoned Equity Offerings are often surrounded by less optimism. Based on analyst forecast properties for a large number of REITs, we find that REIT analysts tend to be relatively optimistic after IPOs, whereas this tends not to be the case surrounding SEOs. Our results are more pronounced when REITs are bigger and have more analysts following them. Our results are robust for a number of multivariate specifications. Our findings suggest that possible underperformance of REITs after the IPO may be caused by over-optimistic investors.

Suggested Citation

  • Elizabeth Devos & Erik Devos & Seow Eng Ong & Andrew C. Spieler, 2019. "Are REIT Investors Overly Optimistic after Equity Offerings?: Evidence from Analyst Forecast Errors," The Journal of Real Estate Finance and Economics, Springer, vol. 59(2), pages 148-165, August.
    • Handle: RePEc:kap:jrefec:v:59:y:2019:i:2:d:10.1007_s11146-017-9608-1
    DOI: 10.1007/s11146-017-9608-1
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    1. Coën, Alain & Desfleurs, Aurélie, 2022. "The relative performance of green REITs: Evidence from financial analysts’ forecasts and abnormal returns," Finance Research Letters, Elsevier, vol. 45(C).

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