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Sell‐Offs of U.S. Real Estate: The Effect of Domestic versus Foreign Buyers on Shareholder Wealth

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  • F. C. Neil Myer
  • Ling T. He
  • James R. Webb

Abstract

Large foreign acquisitions of U.S. real estate always seem to generate considerable public concern. Most recently the reaction has been to Japanese purchases, but similar reactions occurred to Arab petro‐dollar purchases in the early 1970s. This study examines the impact of the buyer's nationality on the change in the wealth of the selling firm's shareholders for voluntary sell‐offs of U.S. real estate. In general, this study indicates that voluntary sell‐offs of real estate assets result in a significant increase in the wealth of the selling firm's shareholders. However, the change in the wealth of the selling firm's shareholders for U.S. buyers was not significantly different from that for non‐U.S. buyers. Since no advance is indicated for foreign buyers over domestic buyers, laws or regulations hindering the foreign acquisition of U.S. real estate cannot be supported. The assumption of a “non‐level playing field” for U.S. real estate investors who bid against foreign firms for U.S. real estate assets is not confirmed.

Suggested Citation

  • F. C. Neil Myer & Ling T. He & James R. Webb, 1992. "Sell‐Offs of U.S. Real Estate: The Effect of Domestic versus Foreign Buyers on Shareholder Wealth," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 20(3), pages 487-500, September.
    • Handle: RePEc:bla:reesec:v:20:y:1992:i:3:p:487-500
    DOI: 10.1111/1540-6229.00592
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    Cited by:

    1. Ralph B. Siebert & Michael J. Seiler, 2022. "Why Do Buyers Pay Different Prices for Comparable Products? A Structural Approach on the Housing Market," The Journal of Real Estate Finance and Economics, Springer, vol. 65(2), pages 261-292, August.
    2. Daniel Broxterman & Tingyu Zhou, 2023. "Information Frictions in Real Estate Markets: Recent Evidence and Issues," The Journal of Real Estate Finance and Economics, Springer, vol. 66(2), pages 203-298, February.
    3. Yongheng Deng & Maggie R. Hu & Adrian D. Lee, 2021. "Melting pot or salad bowl: Cultural distance and housing investments," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 49(S1), pages 235-267, March.
    4. George Cashman & David Harrison & Michael Seiler, 2014. "Advisor Choice in Asia-Pacific Property Markets," The Journal of Real Estate Finance and Economics, Springer, vol. 48(2), pages 271-298, February.
    5. Dirk Brounen & Mathijs van Dijk & Piet M.A. Eichholtz, 2008. "Corporate Real Estate and Corporate Takeovers: International Evidence," Journal of Real Estate Research, American Real Estate Society, vol. 30(3), pages 293-314.
    6. Edward F. Pierzak, 2001. "Payment Choice in REIT Property Acquisitions," Journal of Real Estate Research, American Real Estate Society, vol. 21(1/2), pages 105-140.
    7. Poh Har Neo & Seow Eng Ong & Yong Tu, 2008. "Buyer Exuberance and Price Premium," Urban Studies, Urban Studies Journal Limited, vol. 45(2), pages 331-345, February.

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