US REITs Geographic Concentration and Financial Analysts’ Forecasts

Alain Coen and Aurelie Desfleurs

ERES from European Real Estate Society (ERES)

Abstract: The aim of this study is to investigate the potential impact of US REITs geographic concentration on the accuracy and bias of financial analysts’ earnings (and FFO) forecasts. Using a unique property-level dataset, we analyze from 2000 to 2023 the impact of geographic concentration on the relative performances of real estate investments trusts (REITs). We use different metrics to measure the level of geographic concentration. First, we document the coverage, the accuracy and the bias of financial analysts’ earnings forecasts on «concentrated» and «diversified» REITs. Our results report that the level of accuracy and the level of optimism are statistically different for these two categories, and statistically related to concentration indices. Second, we focus on the different geographic concentration indices as potential determinants of financial analysts’ forecasts accuracy and bias. Our empirical results shed new light on the relative importance of the level of geographic concentration, or home bias at home, since the early 2000’s and the US REITs maturity era, on the complexity of financial analysts’ forecasts, suggesting implications for asset managers, investors and policymakers.

Keywords: Financial analystsâ; REITs (search for similar items in EconPapers)
JEL-codes: R3 (search for similar items in EconPapers)
Date: 2025-01-01
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Persistent link: https://EconPapers.repec.org/RePEc:arz:wpaper:eres2025_172

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