With property characteristics unobserved or difficult to measure, there are returns to evaluation, due diligence and performance. Buyers can invest in observable human capital signals including location and experience that lower search costs. Buyers with local experience have lower search costs,...

During an asset boom a property can develop a new usage. Appreciation investors emerge to change a property's occupant mix or letter grade. Rental investors not intending to change the mix or grade are outbid. Sellers receive a capitalized premium from the new type of bidder. For apartments in...

The firm’s inventory-sales ratio prices exposure to the housing cycle with a predictable sign. The buyer of a new home holds a pre-construction contract at a guaranteed price with the right to cancel at any date up to delivery. The demand for contracts rises with falling user costs while lot...

Metrics using repeat sale data assume that frequently and infrequently sold properties are similar in capital expenditures, maintenance and other characteristics. Value-added investors concentrate on repositioning properties which requires capital investment and managerial skills. Returns using...

We examine the impact of information asymmetry on a firm’s choice between cash and credit lines for corporate liquidity management using a panel data set from real estate investment trusts (REITs). Information asymmetry, as measured by analyst forecast error and dispersion, is negatively...

The impact of bank mergers on Real Estate Investment Trust (REIT) loan pricing and takeover likelihood is assessed. REITs that lose their primary banking relationship due to bank mergers pay higher interest rates on future borrowings. Bank consolidation reduces bank competition for REIT loans...

This study is one of the first to investigate brokerage intermediation effects in the income producing commercial property market. Employing multifamily sales data from the Atlanta and Phoenix markets under alternative brokerage specifications, little evidence to support the existence of...

Investment and liquidity management are analyzed in a sector in which firms are exogenously cash constrained and empirical estimates of Tobin's "q" provide reliable measures of investment opportunity. Across the entire sector, we document substantial realized investment as well as high...

This article examines the evolution of real estate investment trust (REIT) capital structure in the new REIT era with a focus on the effects of banking relationships on REIT capital structure. Using a unique sample of REITs from 1992 to 2003, we find that, after controlling for firm...