Are REIT IPOs Unique? The Global Evidence

Posted: 8 Nov 2013

See all articles by Su Han Chan

Su Han Chan

Johns Hopkins University - Carey Business School

Jiajin Chen

CUNY Baruch College

Ko Wang

CUNY Baruch College

Date Written: November 7, 2013

Abstract

Previous studies of real estate investment trust (REIT) IPOs have focused primarily on REITs listed in the U.S. exhibit an abnormally low initial-day return and mixed long-run performance. Our study examines this puzzle using a large sample of 370 REIT IPOs from four continents (14 different countries) during the 1996-2010 period. We find that (1) the newly-established REITs in other countries exhibit similar initial-day return pattern as in the U.S., (2) the low initial-day return might be caused by the fund-like structure of REITs and the re-deployable assets (real estate) they hold, (3) the slightly positive initial-day return is offset by the poor performance in the 190 days subsequent to the IPO, and (4) the change in U.S. REIT IPO performance before and after 1990 is likely due to a change in the REIT structure.

Keywords: REIT; IPOs; Real estate market; International real estate

Suggested Citation

Chan, Su Han and Chen, Jiajin and Wang, Ko, Are REIT IPOs Unique? The Global Evidence (November 7, 2013). Journal of Real Estate Finance and Economics, Vol. 47, No. 4, 2013. Available at SSRN: https://ssrn.com/abstract=2351361

Su Han Chan

Johns Hopkins University - Carey Business School ( email )

100 International Drive
Baltimore, MD 21202
United States

Jiajin Chen

CUNY Baruch College ( email )

17 Lexington Avenue
New York, NY 10021
United States

Ko Wang (Contact Author)

CUNY Baruch College ( email )

17 Lexington Avenue
New York, NY 10021
United States

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