A Review and Extension of Merger and Acquisition Research Between REITs and General Corporations

John L. Glascock, Ying Zhang and Tingyu Zhou

Journal of Real Estate Literature, 2018, vol. 26, issue 2, 223-253

Abstract: We review the key differences between the finance and real estate literature on mergers and acquisitions (M&As) from 1980 to 2016. We summarize the differences in M&As between REITs and general corporations. First, REIT mergers are larger than general mergers. In particular, the bid levels of REITs are consistently higher than those of standard business mergers. Second, REIT acquisitions involve fewer all-stock bids and fewer all-cash deals. Third, the deal sizes with mixed payments are much higher than with other payment methods. Fourth, there are very few hostile takeovers in the REIT market but the proportion of hostile takeovers in REITs does not differ from conventional firms. Fifth, the average deal value of REIT private-to-public takeovers is higher than public-to-public takeovers and the average deal value of REIT public-to-private takeovers is higher than private-to-private or other-private M&As. Finally, researchers have not examined the use of REITs that could help move real estate assets into better managed and use form; thus this will provide fruitful research ideas in the future.

Date: 2018
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DOI: 10.1080/10835547.2018.12090484

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