REITs, Growth Options and Beta

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Tarih

2016-11-08

Dergi Başlığı

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Cilt Başlığı

Yayıncı

Springer New York LLC

Erişim Hakkı

info:eu-repo/semantics/closedAccess

Araştırma projeleri

Organizasyon Birimleri

Dergi sayısı

Özet

Are REITs income stocks, only? Following Myers (1977) and Bernardo et al. (2007), we examine empirically REITs’ unlevered betas, betas of growth options, betas of assets-in-place and the difference between the latter two in detail for 1983–2012, and also for three sequential, distinct, and mutually-exclusive REIT sub-periods. We find that, (i) the betas of growth options are larger than those of assets-in-place, (ii) there are differences in these betas across Equity REITs’ sub-sectors and sub-periods, (iii) REITs with a high growth profile tend to employ more short-term debt and are mainly listed on NASDAQ, and (iv) the Global Financial Crisis has influenced considerably the beta estimates across all sub-sectors and REIT types. These findings raise a question mark about the ‘income stock, only’ description of REITs. Our findings have important implications for the cost of capital of REITs and their capital budgeting practices. We discuss them, when appropriate, with numerical examples.

Açıklama

Anahtar Kelimeler

Assets-in-place, Beta, Cost of capital, Growth option, REIT Maturity Era, REITs, Asset price dynamics, Corporate-investment, Systemaic-risk, Cross-section, Returns, Duration, Equity

Kaynak

Journal of Real Estate Finance and Economics

WoS Q Değeri

Q3
Q3

Scopus Q Değeri

Q1

Cilt

55

Sayı

3

Künye

Tırtıroğlu, D., Nguyen, T. H., Tırtıroğlu, E., & Wee, T. C. (2017). REITs, growth options and beta. The Journal of Real Estate Finance and Economics, 55(3), 370-394. doi:10.1007/s11146-016-9590-z