Property-by-Property Valuation of Publicly Traded Real Estate Firms

John B. Corgel
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John B. Corgel: School of Hotel Administration 182 Statler Hall Cornell University Ithaca, New York 14853, http://www.hotelschool.cornell.edu/

Journal of Real Estate Research, 1997, vol. 14, issue 1, 77-90

Abstract: Because the assets held by publicly traded real estate companies are infrequently traded, their values must be estimated to determine the relationship between share prices and net asset values for investment purposes. Alternative modeling approaches may be followed to accomplish these valuations, including income-based and transaction-based models. The real estate values of publicly traded firms are estimated in this study using a hedonic pricing model that combines the market’s valuation of the fundamental character-istics of the assets with the specific characteristics of each asset being valued. After converting asset values to estimates of net asset values, the net asset values are compared to the market valuations of firms’ equity claims. Valuations for two Hotel REITs provide information about market premiums commonly attributable to liquidity and REIT management.

JEL-codes: L85 (search for similar items in EconPapers)
Date: 1997
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