Arnold L. Redman

A multivariate analysis of REIT performance by financial and real asset portfolio characteristics

This paper examines the risk-adjusted performance of real estate investment trusts (REITs) from 1986 through 1990 in relation to financial and property characteristics of their portfolios. The Sharpe measure of risk-adjusted rate of return was regressed against financial ratios and property investment ratios for a sample of equity and mortgage REITs. The results show that, in general, financial ratios (gross cash flow, leverage, asset size), regional location of properties, and types of real estate investments determine the risk-adjusted performance. More specifically, location of properties in the western United States, ownership of health care properties, and investment in securitized mortgages positively affect the risk-adjusted return. The individual financial variables were not found to be statistically significant in influencing REIT returns.

A Normalized Citation Analysis of Real Estate Journals

This study presents an analysis of the citation patterns and rankings for journals in real estate and related areas for the period 1990-1995. Journals were ranked based on the number of times the journals were cited in four base journals with adjustments for journal size and longevity. The results show that Real Estate Economics is the most cited journal among real estate publications followed closely by the Journal of Real Estate Finance and Economics and The Journal of Real Estate Research. A temporal analysis reveals a shift over the time period in citations away from the traditional economics and practitioner-oriented journals to the academic real estate journals.

Corporate real estate financing methods: A statistical study of corporations’ choices

This study examines the financing methods used by corporations to acquire real estate for their operations. It also examines the opinion of managers about the factors that they consider in choosing financing methods. The data were provided by a survey questionnaire that was sent to members of the International Association of Corporate Real Estate Executives. It was found that companies rely on internal financing (operating cash flows) and external financing such as long‐term leasing, joint ventures, property mortgages and sale/leaseback arrangements. The top‐ranked methods of finance include operating cash flows, property mortgages, leasing and sales/leasebacks. Use of real estate investment trusts, collateralised mortgage obligations and mortgage‐backed securities were the lowest‐ranked forms of financing. Managers tend to look at tax advantages of debt and availability of cash flows in deciding which financing methods to use, rather than theoretical corporate finance factors such as bankruptcy cost. There were significant differences in opinion by industry and by company size regarding the use of cash flows and the impact of debt financing on common stock prices.