TY - CONF T1 - Public vs. Private Market Arbitrage – Can Growth REITs Benefit from their High Valuation? T2 - 24th Annual European Real Estate Society Conference Y1 - 2017 A1 - Downs, David H. A1 - Steffen Sebastian A1 - René-Ojas Woltering KW - debt offerings KW - net asset value KW - public vs. private market arbitrage KW - seasoned equity offerings KW - value vs. growth AB -

This paper examines the impact of the ratio of price-to-fundamental value on the stock market performance of real estate securities following seasoned equity offerings and senior debt issuances. Using a global sample of real estate securities, we distinguish between growth stocks, i.e. those with the highest stock prices relative to the private market value of their properties, and value stocks, which tend to trade at substantial discounts to their net asset value (NAV). Consistent with the notion that newly issued equity is ultimately priced similar to pre-SEO levels, we find that growth stocks perform significantly better than value stocks in the 36 months following the SOE. We also examine the long run performance following senior debt issuances and document a substantial outperformance (underperformance) for growth (value) real estate securities in the 36 months following the offering. Overall, our findings are consistent with the hypothesis that growth REITs can benefit from "public vs. private market arbitrage".

JA - 24th Annual European Real Estate Society Conference T3 - ERES: Conference CY - Delft, Netherlands J1 - Conference: 2017 ID - oai-eres.id-eres2017_329 M3 - 10.15396/eres2017_329 ER -