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Property-by-Property Valuation of Publicly Traded Real Estate Firms

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Abstract

Because the assets held by publicly traded real estate companies are infrequently traded, their values must be estimated to determine the relationship between share prices and net asset values for investment purposes. Alternative modeling approaches may be followed to accomplish these valuations, including income-based and transaction-based models. The real estate values of publicly traded firms are estimated in this study using a hedonic pricing model that combines the market’s valuation of the fundamental character-istics of the assets with the specific characteristics of each asset being valued. After converting asset values to estimates of net asset values, the net asset values are compared to the market valuations of firms’ equity claims. Valuations for two Hotel REITs provide information about market premiums commonly attributable to liquidity and REIT management.

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  • John B. Corgel, 1997. "Property-by-Property Valuation of Publicly Traded Real Estate Firms," Journal of Real Estate Research, American Real Estate Society, vol. 14(1), pages 77-90.
    • Handle: RePEc:jre:issued:v:14:n:1:1997:p:77-90
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    Cited by:

    1. Jack Corgel & Crocker Liu & Robert White, 2015. "Determinants of Hotel Property Prices," The Journal of Real Estate Finance and Economics, Springer, vol. 51(3), pages 415-439, October.
    2. Mariya Letdin & C. Stace Sirmans & G. Stacy Sirmans, 2024. "Spread Too Thin: REIT Asset Dispersion and Divergence of Opinion," The Journal of Real Estate Finance and Economics, Springer, vol. 69(2), pages 201-227, August.

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    JEL classification:

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

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