Anomalous Evidence on Operating Performance Following Seasoned Equity Offerings: The Case of Reits

Financial Management, Vol. 29, No. 2, Summer 2000

Posted: 13 Jun 2001

See all articles by H. Swint Friday

H. Swint Friday

Texas A&M University-Corpus Christi-College of Business; University of South Alabama

Shawn D. Howton

Villanova University - Department of Finance

Shelly Howton

Villanova University - School of Business

Abstract

We examine the operating performance of 200 equity real estate investment trusts (REITs) following seasoned equity offerings (SEO) made between 1990 and 1996. Our sample shows flat to increasing levels of operating performance changes prior to the SEO; and increasing raw performance changes and flat industry-adjusted performance changes following the SEO. Cross-sectional test results on the operating performance changes are consistent with existing theory. Our results contrast with industrial firm results, where performance changes are negative following an SEO. We attribute this difference to structural differences in REITs that limit the levels of internal capital available to REIT managers.

Suggested Citation

Friday, H. Swint and Howton, Shawn D. and Howton, Shelly W., Anomalous Evidence on Operating Performance Following Seasoned Equity Offerings: The Case of Reits. Financial Management, Vol. 29, No. 2, Summer 2000. Available at SSRN: https://ssrn.com/abstract=267728

H. Swint Friday (Contact Author)

Texas A&M University-Corpus Christi-College of Business ( email )

6300 Ocean Drive
Corpus Christi, TX 78412
United States
361-825-2498 (Phone)
361-825-5609 (Fax)

University of South Alabama ( email )

College of Business and Management Studies
Mobile, AL 36688
United States
334-460-6194 (Phone)
334-460-6734 (Fax)

Shawn D. Howton

Villanova University - Department of Finance ( email )

800 Lancaster Avenue
Villanova, PA 19085-1678
United States

Shelly W. Howton

Villanova University - School of Business ( email )

Dept. of Finance
Villanova, PA 19085
United States
610-519-6111 (Phone)
610-519-6881 (Fax)

Register to save articles to
your library

Register

Paper statistics

Abstract Views
964
PlumX Metrics