Work from Home and Commercial Real Estate – Evidence from Stock Markets

Stanimira Milcheva and Lingshan Xie

ERES from European Real Estate Society (ERES)

Abstract: We explore investor expectations about the effects of work from home (WFH) for the commercial real estate sector. We assess how differences in WFH exposure of listed real estate investment trusts (REITs) in the largest European economies – Germany, France and the UK – during the early stages of the Covid-19 pandemic affect their abnormal returns. We measure WFH exposure as REIT’s exposure to the office sector, central business districts (CBDs) and WFH tenants. To capture tenant’s strong commitment to working from home in the future, we construct a variable for tenant WFH intensity using tenant WFH announcements between March and June 2020. We show that REITs with higher WFH exposure have significantly negative abnormal returns independently of their domicile, sector specialization or CBD exposure. Equity investors look at REIT portfolio composition and WFH announcements by tenants to assess the likelihood of WFH in the long term and the associated drop in office demand.

Keywords: commercial real estate; Real Estate Investment Trusts; Stock returns; Work from Home (search for similar items in EconPapers)
JEL-codes: R3 (search for similar items in EconPapers)
Date: 2022-01-01
New Economics Papers: this item is included in nep-eur and nep-ure
References: Add references at CitEc
Citations:

Downloads: (external link)
https://eres.architexturez.net/doc/eres-id-eres2022-129 (text/html)
https://architexturez.net/system/files/P_20220506060959_3368.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 403 Forbidden

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:arz:wpaper:2022_129

Access Statistics for this paper

More papers in ERES from European Real Estate Society (ERES) Contact information at EDIRC.
Bibliographic data for series maintained by Architexturez Imprints ().