REIT Pricing Efficiency; Should Investors Still Be Concerned?

Scott D. Below (), Joseph K. Kiely and Willard McIntosh
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Scott D. Below: Department of Finance East Carolina University Greenville, North Carolina 27858, http://www.business.ecu.edu/depts/FINA/
Joseph K. Kiely: Department of Finance East Carolina University Greenville, North Carolina 27858, http://www.business.ecu.edu/depts/FINA/
Willard McIntosh: Prudential Real Estate Investors 51 JFK Parkway Short Hills, New Jersey 07078, http://www.prudential.com/inst/business/prei/

Journal of Real Estate Research, 1996, vol. 12, issue 3, pages 397-412

Abstract: This study examines the impact of the REIT boom on the market microstructure of REIT common stocks. We analyze NYSE-traded REITs during the pre-boom period (1992) and the post-boom period (1994), and find significant reductions in bid/ask spreads over the period. We also find that the bid/ask spread differential between REITs and non-REITs has been roughly halved between 1991 and 1994. These reductions provide a direct benefit to REIT investors in terms of reduction in transaction costs and improved liquidity, and suggest that the level of uncertainty on the part of the REIT specialist has been reduced.

JEL-codes: L85 (search for similar items in EconPapers)
Date: 1996
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