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Liquidity and Liquidation: Evidence from Real Estate Investment Trusts
Author(s) -
Brown David T.
Publication year - 2000
Publication title -
the journal of finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 18.151
H-Index - 299
eISSN - 1540-6261
pISSN - 0022-1082
DOI - 10.1111/0022-1082.00213
Subject(s) - business , market liquidity , real estate , financial distress , finance , investment (military) , real estate investment trust , monetary economics , financial system , economics , politics , political science , law
This study provides evidence that highly leveraged owner‐managed properties liquidated assets during the commercial real estate decline of the late 1980s, and that this provided buying opportunities for better capitalized buyers. The analysis documents significant financial distress costs for highly leveraged firms during an industry‐wide downturn and shows that these costs are particularly large for owner‐managed firms.