NAV Premiums & REIT Property Transactions

Dongshin Kim and Jonathan A. Wiley

Real Estate Economics, 2019, vol. 47, issue 1, 138-177

Abstract: This study explores the outcome for REIT investment in response to NAV premiums considering (1) the volume of acquisition activity, and (2) relative prices paid for individual assets. Regarding the first, we provide evidence that REIT managers increase real estate investment following positive changes in NAV premiums. Regarding the second, we use a large sample of transactions for retail, office and multifamily property and find that REITs appear to pay significantly higher prices relative to other investors. Transaction prices paid by REIT managers for all three property types are positively and significantly affected by market‐wide NAV premiums.

Date: 2019
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https://doi.org/10.1111/1540-6229.12239

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Persistent link: https://EconPapers.repec.org/RePEc:bla:reesec:v:47:y:2019:i:1:p:138-177

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