Corporate Restructuring Involving Real Estate Assets: Some Earnings and Risk Signal Implications

Donald G. Christensen () and Donald R. Levi
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Donald G. Christensen: Department of Finance, Real Estate and Decision Sciences W. Frank Barton School of Business Administration The Wichita State University University Tower Wichita, Kansas 67260-0088, http://www.twsu.edu/~finance/
Donald R. Levi: Department of Finance, Real Estate and Decision Sciences W. Frank Barton School of Business Administration The Wichita State University University Tower Wichita, Kansas 67260-0088, http://www.twsu.edu/~finance/

Journal of Real Estate Research, 1993, vol. 8, issue 4, 579-596

Abstract: Changes in common stockholder wealth when companies announce purchases and sales of real estate assets may result from changing investor perceptions about the risk, timing and/or amount of future cash flows. The evidence suggests that neither sellers nor buyers experience changes in firm risk for these transactions. However, sellers experience positive cash flow changes in the announcement year while buyers experience positive cash flow changes in the following year. Finally, for one-time purchasers, our study provides evidence that the lower the earnings performance compared with expectations in the announcement year, the greater the prediction errors.

JEL-codes: L85 (search for similar items in EconPapers)
Date: 1993
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