38 Pages Posted: 29 Jun 2012
Date Written: June 1, 2012
Prior research on the impact of REIT ownership on property performance is very limited and provides inconclusive empirical evidence. Whether REITs add value at the microlevel remains a puzzle. Utilizing a dataset of detailed accounting information for individual hotels across 5 US states, we re-examine the performance of REIT-owned properties. Unlike prior research that focuses on revenue-based performance measures, we examine both the top-line and bottom-line performance of hotel operations. We find that REIT ownership favorably impacts property performance in that REIT-owned hotels have higher profit margins than other lodging properties. The greater cost efficiency is likely attributable to savings in non-distributed operating expenses and fixed charges. We document no outperformance by REITs in revenue growth.
Suggested Citation: Suggested Citation
Howton, Shawn D. and Howton, Shelly and Lee, Johnny and Luo, Mi (Meg), REIT Ownership and Property Performance: Evidence from the Lodging Industry (June 1, 2012). Available at SSRN: https://ssrn.com/abstract=2096298 or http://dx.doi.org/10.2139/ssrn.2096298
By Bing Han