Yuan-Chen Chang, Yi‐Ting Hsieh, Kiat Ying Seah, T. Sing
{"title":"Banking Relationships and Financial Decisions of REITs","authors":"Yuan-Chen Chang, Yi‐Ting Hsieh, Kiat Ying Seah, T. Sing","doi":"10.2139/ssrn.3757788","DOIUrl":null,"url":null,"abstract":"Banking relationships are key factors influencing financing decisions of real estate investment trusts (REITs) that are mandated to hold highly specific assets. Using a comprehensive data set of loan facilities by REITs across different markets, this paper empirically tests the effect of REIT-bank relationships on credit costs and other non-price credit terms. We find that REITs with past banking relationships enjoy favourable loan terms that include lower loan rates, higher loan amount, and a less stringent collateral requirement. These favorable terms were kept by relationship banks during the Global Financial Crisis from 2007 to 2009.","PeriodicalId":82443,"journal":{"name":"Real property, probate, and trust journal","volume":"73 1","pages":""},"PeriodicalIF":0.0000,"publicationDate":"2020-12-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"1","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Real property, probate, and trust journal","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.2139/ssrn.3757788","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"","JCRName":"","Score":null,"Total":0}
引用次数: 1
Abstract
Banking relationships are key factors influencing financing decisions of real estate investment trusts (REITs) that are mandated to hold highly specific assets. Using a comprehensive data set of loan facilities by REITs across different markets, this paper empirically tests the effect of REIT-bank relationships on credit costs and other non-price credit terms. We find that REITs with past banking relationships enjoy favourable loan terms that include lower loan rates, higher loan amount, and a less stringent collateral requirement. These favorable terms were kept by relationship banks during the Global Financial Crisis from 2007 to 2009.