The Determinants of the Debt Maturity Decision for Real Estate Investment Trusts

Using the maturity of incremental bond issues and the weighted-average maturity of all outstanding debt, we test various theories from the corporate debt maturity literature to discover if REIT debt maturity is influenced by liquidity risk, asymmetric information, personal taxes, and agency problems. We jointly test all four theories and find little to no evidence for the liquidity and asymmetric information hypotheses; however, we do find evidence that personal taxes influence the maturity of REIT incremental debt issues, and agency problems play a role in determining the incremental and average debt maturity of REITs