PDF iconDownload This Paper
Open PDF in Browser
Add Paper to My Library
Permalink
Using these links will ensure access to this page indefinitely
Copy URL
Copy DOI

Explaining the Variation in Reit Capital Structure: The Role of Asset Liquidation Value

36 Pages Posted: 23 Aug 2006

See all articles by Erasmo Giambona

Erasmo Giambona

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

John P. Harding

University of Connecticut - School of Business - Center for Real Estate and Urban Economic Studies

C. F. Sirmans

Florida State University - Department of Risk Management, Insurance, Real Estate & Business Law

Date Written: February 15, 2007

Abstract

We test the Shleifer-Vishny hypothesis that asset liquidation values influence both firm leverage and the choice of debt maturity. Using panel data on REITs, we estimate a simultaneous equation model and find that firms specializing in the most (least) liquid assets use more (less) leverage and longer (shorter) maturities. The evidence also suggests that, for REITs, debt maturity and leverage are substitutes, consistent with the theory and predictions of Barclay, Marx and Smith.

Keywords: Asset Liquidation Value Hypothesis, Capital Structure, Debt Maturity, Leverage, Lease Structure, REITs

JEL Classification: G32

Suggested Citation

Giambona, Erasmo and Harding, John P. and Sirmans, C. F., Explaining the Variation in Reit Capital Structure: The Role of Asset Liquidation Value (February 15, 2007). Available at SSRN: https://ssrn.com/abstract=926136 or http://dx.doi.org/10.2139/ssrn.926136

Erasmo Giambona

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)

John P. Harding (Contact Author)

University of Connecticut - School of Business - Center for Real Estate and Urban Economic Studies ( email )

2100 Hillside Road
Unit 1041RE
Storrs, CT 06269-2041
United States
860-486-3227 (Phone)
860-486-0349 (Fax)

C. F. Sirmans

Florida State University - Department of Risk Management, Insurance, Real Estate & Business Law ( email )

Tallahasse, FL 32306
United States
850 644-4076 (Phone)

HOME PAGE: http://www.cob.fsu.edu/rmi

PDF iconDownload This Paper
Open PDF in Browser

Do you have a job opening that you would like to promote on SSRN?

Place Job Opening

Paper statistics

Downloads
445
Abstract Views
5,237
Rank
127,308
1 Citations
32 References
PlumX Metrics

Related eJournals

Recommended Papers