The Conditional Performance of REIT Stock Repurchases

Posted: 9 Sep 2005

See all articles by Joseph H. Golec

Joseph H. Golec

University of Connecticut - Department of Finance

Erasmo Giambona

Syracuse University - Whitman School of Management - Finance Department; James D. Kuhn Center for Real Estate

Carmelo Giaccotto

University of Connecticut - Department of Finance

Abstract

This paper uses a conditional performance measure to test whether real estate investment trust (REIT) managers announcing stock repurchases have private information about their firms' prospects. We use stock price to condition for public information and measure the managers' implied private information by the covariance between repurchase size and subsequent stock payoffs (or operating performance). Results show that managers have private information but mostly with respect to long-term as opposed to near-term payoffs. We also find that repurchase size is positively related to a stock's idiosyncratic return volatility, perhaps because noisty stocks deviate farther from fundamental value, offering informed managers larger profit potential.

Keywords: REITs, Conditional Performance, Noisy Rational Expectations, Stock Repurchases

Suggested Citation

Golec, Joseph and Giambona, Erasmo and Giaccotto, Carmelo, The Conditional Performance of REIT Stock Repurchases. Journal of Real Estate Finance and Economics, Vol. 32, No. 2, 2006, Available at SSRN: https://ssrn.com/abstract=796087

Joseph Golec

University of Connecticut - Department of Finance ( email )

School of Business
2100 Hillside Road
Storrs, CT 06269
United States

Erasmo Giambona (Contact Author)

Syracuse University - Whitman School of Management - Finance Department; James D. Kuhn Center for Real Estate ( email )

721 University Avenue
RM 640
Syracuse, NY 13244-2450
United States
315 443-4885 (Phone)

Carmelo Giaccotto

University of Connecticut - Department of Finance ( email )

School of Business
2100 Hillside Road
Storrs, CT 06269
United States
202-486-4360 (Phone)
202-486-0349 (Fax)

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
620
PlumX Metrics