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Institutional Investors’ Preferences for REIT Stocks
Author(s) -
Ciochetti Brian A.,
Craft Timothy M.,
Shilling James D.
Publication year - 2002
Publication title -
real estate economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.064
H-Index - 61
eISSN - 1540-6229
pISSN - 1080-8620
DOI - 10.1111/1540-6229.t01-1-00051
Subject(s) - real estate investment trust , institutional investor , market liquidity , business , portfolio , tobit model , financial economics , monetary economics , investment (military) , real estate , economics , financial system , finance , econometrics , corporate governance , politics , political science , law
This article investigates the determinants of real estate investment trusts (REIT) portfolio investment and institutional REIT ownership using multivariate Tobit regressions. We contend that many institutional investors take larger positions in more liquid assets like REIT stocks, as compared with private real estate equities, because of liquidity considerations. Consistent with this contention, we find that liquidity constraints are significantly related to REIT portfolio investment by institutional investors. We also find that institutional investors have different preferences for REIT stocks than do other investors; they generally prefer larger, more liquid REIT stocks.