Dissertations, Theses, and Capstone Projects

Date of Degree

2-2015

Document Type

Dissertation

Degree Name

Ph.D.

Program

Business

Advisor

Su Han Chan

Subject Categories

Finance and Financial Management

Abstract

This dissertation is composed with two essays on real estate investment trusts. The first chapter examines REIT IPOs initial-day, short-run and long-run performance using a large sample of 370 REIT IPOs from four continents (14 different countries) during the 1996-2010 period. The result shows that (1) the newly-established REITs in other countries exhibit similar initial-day return pattern as in the U.S., (2) the low initial-day return might be caused by the fund-like structure of REITs together with the real estate assets they hold, (3) the slightly positive initial-day return is offset by the poor performance in the 190-day days subsequent to the IPO, and (4) the change in U.S. REIT IPO performance before and after 1990 is more likely due to a change in the REIT structure than to the growing maturity of the REIT industry or an increase in institutional investor participation in the REIT market.

The second chapter analyzes the announcement dates and market dates of 483 entry and 439 exit events of publicly-traded Real Estate Investment Trusts (REITs). The study finds that changes in asset supply (via entries or exits of REITs) affect the stock returns of incumbent REITs. Furthermore, the study partitions the sample based on the reasons for entries and exits as well as REIT asset type and management style in order to disentangle alternative explanations for the stock responses to the entry and exit events. The conclusion is that the stock responses documented in this study cannot be explained by the signaling, changes in competitive environment or market timing hypotheses.

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