Institutional ownership and REIT acquisitions

Daniel Huerta-Sanchez, Thanh N. Ngo and Mark K. Pyles

Applied Economics, 2021, vol. 53, issue 36, 4207-4228

Abstract: We examine the relationship between institutional ownership and Real Estate Investment Trust (REIT) acquisitions. We find that REITs with relatively higher levels of pre-event institutional ownership are more likely to partake in acquisitions. We additionally find that levels of institutional ownership significantly increase post-acquisitions even after controlling for other relevant factors. This increase is driven by longer-term and passive institutional investors. Further, we find positive influences from the increase in institutional ownership on both market and accounting performance, however, this is driven by increases in short-term and active institutional investor levels. Collectively, our results suggest a significant influence by institutional investment on REIT acquisition decisions that has a significant effect on shareholder wealth.

Date: 2021
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DOI: 10.1080/00036846.2021.1897514

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