Securitization of Real Estate Through the UPREIT Form: A Rational Expectations Exposition
||Ebrahim, M. Shahid
||Securitization of Real Estate Through the UPREIT Form: A Rational Expectations Exposition
||14th Annual European Real Estate Society Conference in London, UK
||This paper studies how competition between taxable and institutional investors shapes the UPREIT organizational form (to develop the real estate sector of the economy). We employ the Lucas (1978) framework to demonstrate that UPREITs adapts to regulatory changes by (i) meticulously acquiring a hybrid form (containing the desirable features of both REITs and RELPs); and (ii) efficiently trading off debt claims (between its constituent investor base). This enhances welfare by mitigating administrative costs, agency costs, bankruptcy costs, illiquidity costs and taxes; thereby confirming the assertions of Coase (1937), Alchian (1950), Miller (1977), Guenther (1992) and Graham (2000).
Post discussion ...
||Session I2: Corporate Finance Issues in REITs II
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