Long Run Underperformance in REITs Following Seasoned Equity Offerings.
This study examines the long-run performance of real estate investment trusts (REITs) following seasoned equity offerings (SEOs). Over 61% of the 178 REITs examined underperform an index of REITs for the first year after the issue, and over 72% of the firms underperform the index for three years following the issue. The sample is partitioned according to book-tomarket value of equity ratio, market value of equity and REIT type. The results reveal that all REIT subsamples except the highest book-to-market quintile and the lowest size quintile exhibit the same patterns of underperformance observed in the full sample. In addition, equity REITs underperform the index for both one and three years while non-equity REITs underperform for three years but exhibit no underperformance for one year following the SEO.
|Main Author:||Howton, Shawn D.|
|Other Authors:||Howton, Shelly W., Friday, H. Swint.|