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REIT and REOC Systematic Risk Sensitivity

Author

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  • Natalya Delcoure

    (Department of Economics & Finance,Mitchell College of Business, University of South Alabama, Mobile, AL 36688)

  • Ross Dickens

    (Department of Economics & Finance, Mitchell College of Business, University of South Alabama, Mobile, AL 36688)

Abstract

Real Estate Investment Trusts (REITs) and Real Estate Operating Companies (REOCs) seem to have different systematic risk levels even though both invest almost exclusively in real estate related assets. We find business risk to be negatively related to systematic risk, as measured by beta, for REITs, while REOCs? betas are positively related to agency costs. The two groups? betas also show differing sensitivity to real estate property type and regional location. REITs? systematic risk is also sensitive to financial leverage and financing form.

Suggested Citation

  • Natalya Delcoure & Ross Dickens, 2004. "REIT and REOC Systematic Risk Sensitivity," Journal of Real Estate Research, American Real Estate Society, vol. 26(3), pages 237-254.
    • Handle: RePEc:jre:issued:v:26:n:3:2004:p:237-254
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    References listed on IDEAS

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    Cited by:

    1. Yunus Yasin Dogan & Chinmoy Ghosh & Milena Petrova, 2019. "On the Determinants of REIT Capital Structure: Evidence from around the World," The Journal of Real Estate Finance and Economics, Springer, vol. 59(2), pages 295-328, August.
    2. Woon Weng WONG & Wejendra Reddy, 2018. "Evaluation of Australian REIT Performance and the Impact of Interest Rates and Leverage," International Real Estate Review, Global Social Science Institute, vol. 21(1), pages 41-70.
    3. Olusegun Olaopin Olanrele, 2014. "Reit Performance Analysis: Are other Factor Determinants Constant?," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 4(4), pages 492-502, April.
    4. Léopold Djoutsa Wamba & Jean‐Michel Sahut & Eric Braune & Frédéric Teulon, 2020. "Does the optimization of a company's environmental performance reduce its systematic risk? New evidence from European listed companies," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(4), pages 1677-1694, July.
    5. Eric J. Higgins & Richard L. Ott & Robert A. Van Ness, 2006. "The Information Content of the 1999 Announcement of Funds from Operations (FFO) Changes for Real Estate Investment Trusts," Journal of Real Estate Research, American Real Estate Society, vol. 28(3), pages 241-256.
    6. Bogdan POPA & Jenica POPESCU & Corina Florentina SCARLAT (MIHAI), 2022. "Financial and Bankruptcy Risk of Economic Entities. Analysis Models," Finante - provocarile viitorului (Finance - Challenges of the Future), University of Craiova, Faculty of Economics and Business Administration, vol. 1(24), pages 50-61, November.
    7. Eric Braune & Pablo Charosky & Lubica Hikkerova, 2019. "Corporate social responsibility, financial performance and risk in times of economic instability," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 23(4), pages 1007-1021, December.
    8. Ran Lu-Andrews & Yin Yu-Thompson, 2018. "The Geography of REIT Investment in Audit Services," International Real Estate Review, Global Social Science Institute, vol. 21(2), pages 169-226.

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    More about this item

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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