Inflation and Real Estate Investments

Case, Brad; Wachter, Susan M.

doi:10.2139/ssrn.1966058

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Inflation and Real Estate Investments

U of Penn, Inst for Law & Econ Research Paper No. 11-33

23 Pages Posted: 29 Nov 2011 Last revised: 18 Aug 2016

See all articles by Brad Case

Susan M. Wachter

University of Pennsylvania - Wharton School, Department of Real Estate ; University of Pennsylvania - Finance Department

Date Written: November 29, 2011

Abstract

This paper analyzes the inflation sensitivity of real estate investments, comparing them to other inflation-sensitive assets. The most transparent source of real estate investment returns comes from publicly traded stocks of real estate investment trusts (REITs). The authors examine the available return data, with an emphasis on their relationship to US inflation, although conclusions may apply elsewhere as well.

Keywords: Property, securities, real estate investment trusts, REIT, REITs, hedge effectiveness, illiquid assets, portfolio allocation, Sharpe ratio, inflation protection, inflation sensitivity

JEL Classification: E31, G11, G21

Suggested Citation: Suggested Citation

Case, Bradford and Wachter, Susan M., Inflation and Real Estate Investments (November 29, 2011). U of Penn, Inst for Law & Econ Research Paper No. 11-33, Available at SSRN: https://ssrn.com/abstract=1966058 or http://dx.doi.org/10.2139/ssrn.1966058