Customer Concentration and Corporate Real Estate Holdings

University of Miami Business School Research Paper No. 3475175

The Journal of Real Estate Finance and Economics

56 Pages Posted: 5 Nov 2019 Last revised: 11 Apr 2021

See all articles by Shiang Liu

Shiang Liu

University of Wisconsin - La Crosse

Mingming Qiu

Michigan State University - Department of Finance

Shiyi Zhang

University of Miami

Date Written: October 24, 2019

Abstract

We present new empirical evidence that higher customer concentration leads to lower corporate real estate holdings at the supplier firm level. Further evidence shows that this effect is causal and more pronounced when the likelihood/impact of losing primary customers is higher or when suppliers have less bargaining power. Finally, we show that firms with a concentrated customer base tend to choose capitalized leasing in lieu of holding real estate.

Keywords: Customer Concentration, Corporate Real Estate Holdings, Capitalized Leasing

JEL Classification: G30, G32, R33

Suggested Citation

Liu, Shiang and Qiu, Mingming and Zhang, Shiyi, Customer Concentration and Corporate Real Estate Holdings (October 24, 2019). University of Miami Business School Research Paper No. 3475175, The Journal of Real Estate Finance and Economics, Available at SSRN: https://ssrn.com/abstract=3475175 or http://dx.doi.org/10.2139/ssrn.3475175

Shiang Liu (Contact Author)

University of Wisconsin - La Crosse ( email )

1725 State Street
La Crosse, WI 54601
United States
608.785.6655 (Phone)

Mingming Qiu

Michigan State University - Department of Finance ( email )

315 Eppley Center
East Lansing, MI 48824-1122
United States
5178842995 (Phone)

Shiyi Zhang

University of Miami ( email )

P.O. Box 248094
Coral Gables, FL 33124
United States

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