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Market and Institutional Ownership Reactions to REIT Security Issuances

Author

Listed:
  • Daniel Huerta

    (Florida Gulf Coast University)

  • Thanh Ngo

    (East Carolina University)

  • Mark K. Pyles

    (School of Business)

Abstract

This paper examines market and institutional ownership reactions to REIT security issuances. Specifically, we examine the short- and long-term market performance of issuing REITs compared to their non-issuing counterparts. We additionally examine changes in systematic and idiosyncratic risk curtailing from security issuances as well as institutional ownership shifts stemming from the sale of new securities. We find that equity issuances are met with negative market reaction in the event window, while there is no significant immediate market reaction to debt issuances. Buy-and-hold abnormal returns are generally higher for equity issuers in comparison to debt-issuing and non-issuing firms. We also find that equity issuances increase systematic risk exposure while both types of security issuances reduce idiosyncratic risk. Finally, we document that serial issuers of both equity and debt see increases in institutional investment following issuances.

Suggested Citation

  • Daniel Huerta & Thanh Ngo & Mark K. Pyles, 2024. "Market and Institutional Ownership Reactions to REIT Security Issuances," The Journal of Real Estate Finance and Economics, Springer, vol. 69(1), pages 164-199, July.
    • Handle: RePEc:kap:jrefec:v:69:y:2024:i:1:d:10.1007_s11146-022-09926-9
    DOI: 10.1007/s11146-022-09926-9
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    References listed on IDEAS

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    More about this item

    Keywords

    REIT security issuances; REIT market performance; REIT institutional ownership; REIT security offerings;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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