Institutional Investment in Reits: Evidence and Implications

Posted: 11 Nov 1998

See all articles by Su Han Chan

Su Han Chan

City University of New York (CUNY) - Department of Real Estate

Wai Kin Leung

The Chinese University of Hong Kong (CUHK) - School of Hotel and Tourism Management

Ko Wang

City University of New York (CUNY) - Baruch College - Zicklin School of Business

Abstract

It has been documented that institutional investors did not participate actively in the real estate investment trust (REIT) stock market prior to 1990 and that the percentage of institutional holdings of a REIT stock is positively correlated with the performance of the REIT stock. This article documents a reversal in trend in institutional investors? preference for investing in REIT stocks and in other stocks. The study shows that prior to 1990, institutional investors invested more of their funds in other stocks than in REITs, whereas after 1990 they invest more of their funds in REITs than in other stocks in the market. The strategies of institutional investors investing in REITs are also analyzed. The findings of the study have implications for the agency and corporate control issues prevailing in the REIT stock market.

JEL Classification: L85

Suggested Citation

Chan, Su Han and Leung, Wai Kin and Wang, Ko, Institutional Investment in Reits: Evidence and Implications. Available at SSRN: https://ssrn.com/abstract=137835

Su Han Chan

City University of New York (CUNY) - Department of Real Estate

One Bernard Baruch Way
New York, NY New York 10010
United States

Wai Kin Leung

The Chinese University of Hong Kong (CUHK) - School of Hotel and Tourism Management ( email )

Hong Kong
(011852) 2609-8592 (Phone)
(011852) 2603-7724 (Fax)

Ko Wang (Contact Author)

City University of New York (CUNY) - Baruch College - Zicklin School of Business ( email )

55 Lexington Ave., Box B13-260
New York, NY 10010
United States

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