Geographic Diversification in Real Estate Investment Trusts

Real Estate eJournal Pub Date : 2019-11-18 DOI:10.1111/1540-6229.12308

Zhilan Feng, McKay Price, D. Ph., Webster A. Collins, Murray H. Goodman

{"title":"Geographic Diversification in Real Estate Investment Trusts","authors":"Zhilan Feng, McKay Price, D. Ph., Webster A. Collins, Murray H. Goodman","doi":"10.1111/1540-6229.12308","DOIUrl":null,"url":null,"abstract":"Whether geographic diversification within property portfolios is ideal remains an open question, with most studies finding either a diversification discount or no evidence of benefits. Using a sample of equity real estate investment trusts (REITs) from 2010–2016, we find a nonlinear relation between geographic diversification and firm value. Specifically, geographic diversification is associated with higher REIT values for firms that can be described as being more transparent (i.e., they have high levels of institutional ownership or invest in core property types.) Whereas, geographic concentration is associated with higher REIT values for firms that can be described as being less transparent (i.e., they have low levels of institutional ownership or invest in non-core property types.) Operating efficiency, at both the property- and firm-levels, are the means by which the diversification value is realized. Operations improve as property portfolios become more geographically diversified for more transparent firms. When the improvements are decomposed into revenue generation and expense efficiency portions, we find revenue generation to be the main operational channel through which the benefits are obtained.","PeriodicalId":21047,"journal":{"name":"Real Estate eJournal","volume":null,"pages":null},"PeriodicalIF":0.0000,"publicationDate":"2019-11-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"34","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Real Estate eJournal","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1111/1540-6229.12308","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"","JCRName":"","Score":null,"Total":0}

引用次数: 34

Abstract

Whether geographic diversification within property portfolios is ideal remains an open question, with most studies finding either a diversification discount or no evidence of benefits. Using a sample of equity real estate investment trusts (REITs) from 2010–2016, we find a nonlinear relation between geographic diversification and firm value. Specifically, geographic diversification is associated with higher REIT values for firms that can be described as being more transparent (i.e., they have high levels of institutional ownership or invest in core property types.) Whereas, geographic concentration is associated with higher REIT values for firms that can be described as being less transparent (i.e., they have low levels of institutional ownership or invest in non-core property types.) Operating efficiency, at both the property- and firm-levels, are the means by which the diversification value is realized. Operations improve as property portfolios become more geographically diversified for more transparent firms. When the improvements are decomposed into revenue generation and expense efficiency portions, we find revenue generation to be the main operational channel through which the benefits are obtained.

查看原文本刊更多论文

房地产投资信托基金的地域多元化

房地产投资组合中的地域多元化是否理想仍是一个悬而未决的问题，大多数研究要么发现了多元化的折扣，要么没有证据表明有好处。以2010-2016年的股权型房地产投资信托基金为样本，我们发现地域多元化与公司价值之间存在非线性关系。具体而言，地理多元化与更高的REIT价值有关，这些公司可以被描述为更透明(即，他们拥有高水平的机构所有权或投资于核心房地产类型)。然而，对于那些可以被描述为不太透明的公司(即，它们的机构所有权水平较低或投资于非核心房地产类型)，地理集中度与较高的REIT值相关。经营效率，无论是在物业层面还是在公司层面，都是多元化价值实现的手段。对于更透明的公司来说，随着房地产投资组合在地理上变得更加多样化，运营也会改善。当这些改进被分解为创收和费用效率部分时，我们发现创收是获得收益的主要运营渠道。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

求助全文

约1分钟内获得全文求助全文

来源期刊

Real Estate eJournal

自引率

0.00%

发文量