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Paper eres2017_369:
Geographic Focus and Systematic Risk in REITs

id eres2017_369
authors Frutig, Brigitte; Prashant Das
year 2017
title Geographic Focus and Systematic Risk in REITs
source 24th Annual European Real Estate Society Conference in Delft, Netherlands
summary We examine how the systematic risk of large commercial real estate owners is associated with geographic diversification. In particular, we analyze time-varying equity betas and geographic exposure of publicly traded pure-play lodging REITs. Contrary to popular expectation, we find that stock investors perceive smaller risk in geographic focus rather than diversification. Further, regional focus becomes insignificant in reducing the risk if the focus expands beyond two or three regions. The findings are robust to multiple measures of geographic diversification. Our study re-affirms the impact of geographic focus in the context of commercial real estate as a risk minimization strategy.
keywords REIT; stock beta
series ERES:conference
type paper session
discussion No discussions. Post discussion ...
ratings
session Real Estate Markets & Economics
last changed 2017/11/18 16:20
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