Clientele Effects for Corporate Investors in the Industrial Market

Yu Liu and Jonathan A. Wiley

Journal of Real Estate Research, 2020, vol. 42, issue 1, 125-150

Abstract: Corporate investors pay significantly higher prices for industrial acquisitions (by an estimated 10%), but sell at market prices that are no different from other investors. The findings implicate informational disadvantages since it is only inexperienced corporations who overpay. Overpayment is more severe for high-quality assets and those sought after by users. Prices are significantly higher when both buyer and seller are corporate investors, indicating different approaches to valuation. Inclusiveness of the control group is an important caveat when measuring clientele effects. Overall, this study contributes to our understanding of investor clientele effects in the market for commercial real estate ownership.

Date: 2020
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DOI: 10.22300/0896-5803.42.1.125

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