Performance differences in property-type diversified versus specialized real estate investment trusts (REITs)

Justin D. Benefield, Randy I. Anderson and Leonard V. Zumpano

Review of Financial Economics, 2009, vol. 18, issue 2, 70-79

Abstract: Evidence from the corporate finance literature indicates that diversified firms trade at a discount to otherwise comparable specialized firms. However, very little research has addressed whether a similar diversification discount might exist in equity REITs that diversify across property types relative to those specializing in one property type. Using a sample of 75 equity REITs, the existence of a property-type diversification discount is tested using standard Jensen's Alpha, Treynor Index, and Sharpe Ratio performance ranking methodologies over four commonly employed market proxies. Several variations of these standard tests are also utilized as robustness checks.

Keywords: REITs; Property-type; diversification; Performance; rankings (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (12)

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