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Who Follows REITs?

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  • Elizabeth Devos
  • Erik Devos
  • Seow Eng Ong
  • Andrew C. Spieler

Abstract

In this paper, we provide evidence that investment bank analysts active in underwriting services at full-service and syndicate banks are the primary issuers of real estate investment trusts' (REITs') recommendations. Analysts at brokerage houses and independent research houses rarely issue REIT recommendations, which suggests that underwriting activities drive issue recommendations for REITs. We also find these recommendations are optimistic after Regulation FD. Non-REIT recommendations differ in the type of issuer and the level of optimism. These systematic differences do not diminish over time. Additional analysis finds book runners of a REIT SEO are more optimistic but that reputational concerns may curb some of the optimism.

Suggested Citation

  • Elizabeth Devos & Erik Devos & Seow Eng Ong & Andrew C. Spieler, 2016. "Who Follows REITs?," Journal of Real Estate Research, Taylor & Francis Journals, vol. 38(1), pages 129-164, January.
    • Handle: RePEc:taf:rjerxx:v:38:y:2016:i:1:p:129-164
    DOI: 10.1080/10835547.2016.12091436
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    Cited by:

    1. 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.
    2. 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).
    3. Elizabeth Devos & Erik Devos & Seow Eng Ong & Andrew C. Spieler, 2019. "Information Asymmetry and REIT Capital Market Access," The Journal of Real Estate Finance and Economics, Springer, vol. 59(1), pages 90-110, July.

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

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