Corporate Governance and the Leverage of REITs: The Impact of the Advisor Structure

18 Pages Posted: 21 Mar 2013

See all articles by Nicolai C. Striewe

Nicolai C. Striewe

European Business School (EBS) Wiesbaden

Nico B. Rottke

European Business School (EBS) Wiesbaden - Department Finance, Accounting & Real Estate

Joachim Zietz

EBS University, EBS Business School

Abstract

This paper examines the impact of the adviser structure on the leverage of 265 real estate investment trusts (REITs) in the United States. The study employs panel data for the period 1994 to 2010. Externally advised REITs tend to choose lower leverage, a result that differs from that of Capozza and Seguin (2000) for the old REIT era (1985-1992). We find no evidence for an agency problem related to the choice of leverage for more recent data. The lower leverage makes economic sense since externally-advised REITs bear higher costs of debt than their internally-advised counterparts.

Keywords: REIT, adviser, externally advised, internally advised

Suggested Citation

Striewe, Nicolai C. and Rottke, Nico B. and Zietz, Joachim, Corporate Governance and the Leverage of REITs: The Impact of the Advisor Structure. Journal of Real Estate Research, Vol. 35, No. 1, 2013. Available at SSRN: https://ssrn.com/abstract=2236261

Nicolai C. Striewe (Contact Author)

European Business School (EBS) Wiesbaden ( email )

Gustav-Stresemann-Ring 3
Wiesbaden, Hessen 65189
Germany

Nico B. Rottke

European Business School (EBS) Wiesbaden - Department Finance, Accounting & Real Estate ( email )

Gustav-Stresemann-Ring 3
Wiesbaden, Hessen 65189
Germany
0611-36 018 931 (Phone)
0611-36 018 902 (Fax)

HOME PAGE: http://www.rem-institute.org

Joachim Zietz

EBS University, EBS Business School ( email )

Gustav-Stresemann-Ring 3
Wiesbaden, Hessen 65189
Germany

Register to save articles to
your library

Register

Paper statistics

Downloads
95
Abstract Views
425
rank
272,698
PlumX Metrics