Do Management Changes Matter? An Empirical Investigation of REIT Performance

18 Pages Posted: 20 Dec 2006

See all articles by G. Stacy Sirmans

G. Stacy Sirmans

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

H. Swint Friday

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

Russell M. Price

Florida State University

Abstract

Management's (board of directors or executive officers) contribution to a firm is difficult to directly observe, although stock return performance can be a source of information. This study addresses this issue by extending the work of McIntosh, Rogers, Sirmans and Liang (1994) by analyzing management changes within REITs from 1984 to 2002. The findings indicate a significant relationship between negative performance and a management change from a period three months prior to the change in management. Logit and probit analysis are used to determine whether negative firm performance (measured by its relationship to market returns) can predict the likelihood of a management change. No predictive ability is found.

This paper received the award for the best paper on Real Estate Investment Trusts [sponsored by the National Association of Real Estate Investment Trusts (NAREIT)] presented at the 2004 ARES Annual Meeting.

Keywords: stock return, REIT, performance, logit, probit

JEL Classification: L85,R11,R38,P51,P43,O16,M19,L98,L85,L20,G32,D21

Suggested Citation

Sirmans, G. Stacy and Friday, H. Swint and Price, Russell M., Do Management Changes Matter? An Empirical Investigation of REIT Performance. Journal of Real Estate Research, Vol. 28, No. 2, 2006, Available at SSRN: https://ssrn.com/abstract=952397

G. Stacy Sirmans (Contact Author)

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

College of Business
Tallahassee, FL 32306
United States
850-644-8214 (Phone)
850-644-4077 (Fax)

H. Swint Friday

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)

Russell M. Price

Florida State University ( email )

Tallahasse, FL 32306
United States

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