The Wealth Effects of Corporate Real Estate Leasing

Marcus T. Allen (), Ronald C. Rutherford and Thomas M. Springer ()
Additional contact information
Marcus T. Allen: Department of Finance and Real Estate Florida Atlantic University University Tower 220 S.E. Second Avenue Fort Lauderdale, Florida 33301, http://www.collegeofbusiness.fau.edu/
Ronald C. Rutherford: Department of Finance and Real Estate University of Texas at Arlington Arlington, Texas 76019-0449, http://www2.uta.edu/finance/
Thomas M. Springer: Department of Finance and Real Estate Florida Atlantic University University Tower 220 S.E. Second Avenue Fort Lauderdale, Florida 33301, http://www.collegeofbusiness.fau.edu/

Journal of Real Estate Research, 1993, vol. 8, issue 4, 567-578

Abstract: This paper resents an event-time study of the wealth effects associated with the corporate decision to lease real estate assets. The analysis provides a measure of the valuation consequences of real estate lease transactions for corporate lessees to determine whether such transactions offer a net benefit to lessees in terms of a common stock price change. Examining a sample of sixty-seven corporate lease announcements reveals that positive abnormal returns accrue to the lessee firm and suggests that, on average, real estate leasing decisions benefit the corporate stockholders. We interpret these findings as consistent with the hypothesis that managers, in making real estate lease decisions, seek to maximize firm value.

JEL-codes: L85 (search for similar items in EconPapers)
Date: 1993
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Citations: View citations in EconPapers (12)

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