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Preferred shares have high, fixed-dividend rates, often comparable to investment-grade bonds but have become a forgotten asset class for most investors. Preferred shares witnessed a surge of attention during the financial crisis of 2008. Because of their high and steady dividend rates, they should be considered as an asset class for portfolios that seek income. The current analysis shows that when added to a diversified portfolio, preferred shares can increase returns and reduce variance over standard equity/ fixed-income portfolios, including those that include some exposure to real estate investment trusts (REITs) for income production. [ABSTRACT FROM AUTHOR]

Corporate disclosures convey crucial information to financial market participants. While machine learning algorithms are commonly used to extract this information, they often overlook the use of idiosyncratic terminology and industry-specific vocabulary within documents. This study uses an unsupervised machine learning algorithm, the Structural Topic Model, to overcome these issues. Our findings illustrate the link between machine-extracted risk factors discussed in corporate disclosures (10-Ks) and the corresponding pricing behavior by investors, focusing on a previously unexplored US REIT sample from 2005 to 2019. Surprisingly, when disclosed, most risk factors counterintuitively lead to a decrease in return volatility. This resolution of uncertainties surrounding known risk factors or the provision of additional facts about these factors contributes valuable insights to the financial market. [ABSTRACT FROM AUTHOR]

Tax incentives are a powerful driver for the development of infrastructure real estate investment trusts (REITs). Complementary antiavoidance regulations are essential to ensure the sustainable and healthy development of the REIT market. This paper breaks through the traditional policy approach that emphasizes incentives but neglects supervision. Based on factors such as information asymmetry and regulatory capture, a tripartite game model of REIT tax incentives and antiavoidance regulation is established. Utilizing global REIT policy and market data, the paper sets parameter values and conducts numerical simulations to explore the dynamic strategic interaction mechanisms among the government, REIT stakeholders, and financial regulators. The study finds that (1) government's tax incentive policies and regulatory strategies show a phase transition characteristic with the changes of REIT market returns; and (2) based on the project's profit status, financial regulators and investors are prone to develop a collusive avoidance evolutionary strategy. Therefore, antiavoidance regulations and mechanisms to prevent regulatory capture should be implemented in tandem to ensure the efficiency of tax incentives. The conclusion of the study provides a theoretical basis for the formulation of REIT tax incentive policy and the promotion of the sustainable development of the REIT market. [ABSTRACT FROM AUTHOR]

Purpose: The present study delves into the causes of relatively lower retail participation in the Indian REIT market. Specifically, it investigates investors' attitudes and perceptions towards REITs as a unique asset class. This paper provides a comprehensive understanding of the perception and factors influencing Indian retail investors' reluctance to participate in the REIT market. Design/methodology/approach: Qualitative research was conducted through semi-structured interviews to gather insights from non-investors in REITs. The data were transcribed and analyzed using content analysis techniques. Finally, coding techniques were used to identify broad study themes. Findings: According to the study results, many retail investors are unfamiliar with REITs. Even among those knowledgeable about REITs and with a favorable view, it is not commonly seen as a feasible investment option due to its early stage, unattractive returns and limited number of REITs. Practical implications: Developed countries have established REIT markets, while it is still in its infancy in developing countries such as India. Financial advisors, fund houses and the media should focus on educating investors to increase awareness. Originality/value: The study is the first qualitative investigation into the perception of retail investors to understand the reasons for lower retail engagement in the Indian REIT market. [ABSTRACT FROM AUTHOR]

Relations between REIT CEO compensation, firm stock performance and risk, after FASB accounting changes and additional SEC compensation disclosure requirements in 2006, are examined. Total compensation becomes more weighted to bonus payments and stock grants and away from options and salary. The majority of REIT CEO compensation comes from bonus payments and stock grants. REIT CEO compensation is found to be positively correlated with lagged firm stock performance, but not lagged firm risk measures. A new metric related to the REIT dividend requirement, dividends paid to CEOs from share ownership, is positively related to CEO total compensation, and the positive relation is driven by a strong association between cash dividends to CEOs and their equity-based compensation. These findings suggest that REIT CEOs trade-off certainty in cash compensation for equity-based wealth and related cash flows. Most important, our results suggest that REIT CEOs are paid for performance and are less likely to earn windfalls that have been associated with the use of options and mis-priced firm risk in non-REIT firms. [ABSTRACT FROM AUTHOR]

This paper studies the pricing of the risk associated with the location of the assets. The local real estate market risk is measured by 'local beta', which combines the systematic risk of local property markets and the property allocation strategy of real estate firms. The empirical results confirm a higher equity return for a firm with higher exposure to the most volatile property markets, particularly for REITs which are more geographically concentrated. For REITs with highly diversified assets, local real estate risks are not reflected in REIT returns. For those REITs with most concentrated assets, a one standard deviation increase in the local beta will lead to a 4.7% increase in the annual return. Investors can use REITs' local real estate risk as an information tool to construct a long-short investment portfolio of real estate firms and can achieve a significant non-market performance of 4.9% per annum. [ABSTRACT FROM AUTHOR]

This study addresses how and why the stock return volatility of REITs changes over time and identifies which mechanisms influence it at a firm level. Using U.S. equity REIT data from 1997 to 2018, we provide evidence that systematic risk and the underlying market for a REIT's properties affect their stock return volatility. The results suggest that both equity and property markets can contribute to an increase in REITs' stock return volatility. Portfolio diversification can reduce their sensitivity to property market risk. REITs with more asymmetric information and financial constraints are more vulnerable to property market risk. [ABSTRACT FROM AUTHOR]

In this paper, we attempt to explore the effects of various uncertainty measures – namely, implied volatility (VIX), tail risk (SKEW), economic policy uncertainty (EPU) and partisan conflict (PCI) indices-, on U.S. REITs returns at sector level, using the non-linear Markov regime-switching model. Our empirical results reveal that uncertainty measures have regime-dependent impacts and do not affect the return dynamics of REIT sectors in a uniform way. Office and hotel & lodging REITs exhibit the strongest sensitivity to VIX and EPU, respectively, during bearish market periods. While residential REITs are the most resilient to uncertainties, healthcare REIT returns are negatively affected from all the uncertainty factors only in the low variance regime. Hence, our findings show evidence of asymmetric, non-linear and sector-dependent linkages between REITs and uncertainties. These results provide valuable insights and important implications for REIT investors. [ABSTRACT FROM AUTHOR]

This study examines how housing sector volatilities affect real estate investment trust (REIT) equity return in the United States. I argue that unexpected changes in housing variables can be a source of aggregate housing risk, and the first principal component extracted from the volatilities of U.S. housing variables can predict the expected REIT equity returns. I propose and construct a factor-based housing risk index as an additional factor in asset price models that uses the time-varying conditional volatility of housing variables within the U.S. housing sector. The findings show that the proposed housing risk index is economically and theoretically consistent with the risk-return relationship of Merton's conditional Intertemporal Capital Asset Pricing Model (ICAPM) (1973), which predicts an average maximum of 1.83 percent of annual housing risk premium in REIT equity return. Moreover, the housing risk index explains a significant portion of the cross-sectional variation of sectoral REIT returns. In cross-section, the positive risk-return relationship remains significant after controlling for VIX, Fama–French four factors, and a broad set of macroeconomic and financial variables. I also find that the proposed housing beta accurately forecasts U.S. macroeconomic and financial conditions. [ABSTRACT FROM AUTHOR]

The market value of a stock is a function of firm performance and market sentiment. Specific events can alter returns and present several challenges to market performances. Through an event study design, this study examines five real estate investment trusts (REITs) market indices' responses to market shock from the initial COVID-19 outbreak. The results revealed negative cumulative abnormal returns for lodging, health care, and retail REITs over the 20-day trading window. Considering their lower drawdown losses, the remaining REIT sectors showed greater resilience than their counterparts. Block bootstrapping confirmed the returns were significantly worse for all sectors, with retail and lodging sectors having the poorest returns. This study advances the literature on pandemic-related market crashes along with how COVID-19 affected cross-sector REIT equities compared to other market indices. REIT firms can use the findings to develop more effective policy measures as responses to pandemic market conditions. [ABSTRACT FROM AUTHOR]

Real estate investment trusts (REITs) have gained considerable investment participation and academic research. However, little is known about personal financial advisors' knowledge, perceived benefits, personal investments, and client recommendations related to public REITs, private REITs, and private real estate investments. This research extends the real estate investment literature by examining all of these unknowns, offering insight into financial advisors' knowledge of real estate investments, client recommendations, personal investment decisions, and financial institution performance resulting from such knowledge and practices. The results show that financial advisors have moderate levels of knowledge public REITs, private REITs, and private real estate investments. It is further shown that the perceived investment benefits translate into personal investments by financial advisors but not necessarily client recommendations. Specifically, financial advisors' perceived benefits of private REITs and public REITs were significantly related to client recommendations but private real estate investments were not. The disconnect between personal investment decisions and client recommendations is interesting and may be due to the capital requirements, property management expertise, and risks associated with private real estate investments. The research also showed that only private REIT recommendations were positively associated with financial institution performance. [ABSTRACT FROM AUTHOR]

The Big Three Institutional investors (State Street, Blackrock, and Vanguard) launched a board gender diversity campaign in 2017. Gormley et al. (J Financ Econ 149(2):323–348, 2023) find that the campaign urged a meaningful change in board gender diversity and upgraded women's roles on boards. In this paper, we assess whether the gender diversity campaign has spilled over to REITs, an industry with fewer Big Three holdings, and how enhanced board gender diversity in turn impacts firm performance. We find that REIT firms improved board gender diversity more proactively than others after 2016. They also promoted more females to key committee positions, indicating that firms' responses went beyond tokenism. Improved board gender diversity led to positive changes in firm performance as measured by the percentage change in ROA and stock returns. Our findings shed light on the recent debate about the effectiveness of shareholder advocacy and imply that the impact of the Big Three investors can go beyond portfolio companies. [ABSTRACT FROM AUTHOR]

This study investigates the financial interconnections among Real Estate Investment Trusts (REITs), sukuk (Islamic bonds), and oil in Gulf Cooperation Council (GCC) nations. The study sample comprises S&P GCC Composite Equity Real Estate Investment Trusts (REITs) Shariah, the S&P GCC Bond and Sukuk Index, and the OPEC crude oil basket on a daily basis. The duration of coverage spans from 2014 until the beginning of 2024. The TVP-VAR methodology is utilized to examine the interrelationship among the assets. The results indicate that Real Estate Investment Trusts (REITs) and oil are sources of volatility transmission, whereas sukuk is a recipient of volatility within the network. Examining the net pairwise directional linkages of two assets, namely REITs and oil markets, reveals that they transfer their volatility to the sukuk market. Moreover, a reciprocal relationship exists between REITs and oil regarding volatility spillover. It means that REITs act as transmitters to the oil markets during specific periods, while the influence is reversed at other times. This study implies that portfolio managers and investors can discern the volatility patterns of assets in order to enhance their risk-management techniques. For policymakers, comprehending the interdependence of certain asset classes provides valuable knowledge for formulating regulations that might stabilize the financial system and foster economic growth. From a research and academic perspective, this study enhances understanding of the interconnections between different financial asset classes and pricing dynamics in financial markets. [ABSTRACT FROM AUTHOR]

Corporate governance (CG) is one of the most sought after areas of research globally. This paper employs a corporate governance index (CGI) formulated from the KING III and IV reports to examine the link between corporate performance and the quality of CG and corporate social responsibility (CSR) of SA REITs listed on the Johannesburg Stock Exchange (JSE). The CGI index is created from King III and IV to measure the compliance of 33 SA REITs listed on the JSE as of January 2023. These REITs are assessed from 2013. The empirical investigation using multiple correspondence analysis (MCA) reveals that CG practices have a positive influence on firm performances measured by TSR (such as total share return). The results imply that CG's standard principles influences the firm performance of SA REITs with a higher magnitude. The CSR index is created from the King reports, and the MCA was also used. This indicates that an SA REIT that complies with CSR regulations will improve returns. [ABSTRACT FROM AUTHOR]

This article examines the performance of real estate investment trusts (REITs) vis-à-vis various benchmark indexes spanning from January 2010 to August 2022. It reveals that the monthly returns of REITs are explicable through systematic factor exposures, primarily linked to equity markets. This indicates a potential limitation in the diversification benefits typically sought by equity investors within the real estate market. Additionally, the article highlights the influence of changes in the slope of yield curve on REIT performance. During periods of COVID-19 induced lockdown and before the start of vaccinations, REITs exhibited a pronounced correlation with benchmarks, posing challenges to diversification strategies. Notably, diversified and industrial REITs displayed positive alphas, albeit not statistically significant, reflecting the impact of the COVID-19 pandemic. Conversely, healthcare REITs demonstrated a negative alpha during this period. Subsequent to the vaccination phase, most REIT categories demonstrated positive alphas, except healthcare and office REITs, according to the six-factor model. This transition signifies nuanced shifts in the performance dynamics of REITs in response to evolving market conditions. [ABSTRACT FROM AUTHOR]

The article focuses on the evolution and impact of social networks over the past two decades, noting their role in speeding up information dissemination and fostering global connections. Topics include the benefits and drawbacks of rapid information spread, the decline in the quality of analysis and discourse, and the influence of social media on market trends and intellectual discussions.

This article regresses the market value of equity on pre-depreciation income and on depreciation expense for capital-intensive firms, referring to the coefficients from our model as valuation weights. The valuation weight on depreciation expense versus the weight on pre-depreciation income are compared, to detect depreciation biases, over time and across sectors. Our model shows that the valuation weights on depreciation expense change over time, if the persistence of the cash flow components of net income varies over time and if the accrual for depreciation is inflexible (e.g., straight-line depreciation). For Real Estate Investment Trusts (REITs), we find the valuation weight on pre-depreciation income increases with industry upturns, while the valuation weight on depreciation expense decreases during upturns. This result is contrasted to the nearly equal valuation weights for the cash flow and depreciation components of earnings for Resource firms (e.g., mines) over time. We conjecture this is because depletion accounting flexibly allows for "depreciation" to exhibit less bias than in other sectors. In summary, actual depreciation practices influence time variation in the valuation of depreciation, a point which has been underappreciated in prior studies. [ABSTRACT FROM AUTHOR]

In an attempt to manage earnings upward, firm managers commonly deviate from normal business activities (i.e., real earnings management) and misrepresent accruals on financial reports (i.e., accrual earnings management). The current study aimed to demonstrate that due to the financial and regulatory uniqueness of lodging real estate investment trusts (REITs), lodging REITs diverge from lodging C-corporations (C-corps) in their earnings management behavior. Specifically, drawing on signaling theory and precautionary motive theory, the current study showed that compared to lodging C-corps, lodging REITs are less likely to engage in accrual earnings management but more actively conduct real earnings management. Furthermore, the deterrent impact of cash holdings on real earnings management using unusually low discretionary expenditures was found to be weaker for lodging REITs than for lodging C-corps. The findings of the current study will enhance stakeholders' understanding of lodging firms' earnings management behavior by shedding light on the different business types in the lodging industry. [ABSTRACT FROM AUTHOR]

This paper investigates the role of scale in Real Estate Mutual Fund (REMF) performance. We test the impact of both fund-level and industry-level economies of scale on fund performance. We provide consistent evidence that industry size erodes REMF performance. After controlling for endogeneity concerns, we document an insignificant relation between fund size and performance. Taken together, these findings suggest that the rapid growth of the REMF industry over the past few decades has materially impacted active managers' ability to consistently outperform their passive benchmarks. As more capital flows into the industry, competition for alpha increases, and investment opportunities dwindle. This effect is stronger in funds who are especially active in seeking out those increasingly elusive opportunities. Specifically, the effect of industry size on alpha is particularly negative for funds with higher turnover ratios, expense ratios, and volatility of returns. [ABSTRACT FROM AUTHOR]

In this paper we explore the drivers and implications of divergence in investor opinion of firm value. We use dispersion in analyst estimates of Net Asset Value in REITs as a measure of divergence. We find that divergence in opinion of value is positively associated with portfolio geographic diversity, the presence of international buildings, and firm leverage. Portfolio concentration in tertiary versus gateway markets has no effect on dispersion of value estimates. We find that greater divergence in analyst opinion of value predicts lower stock returns and higher return volatility. Consistent with theoretical predictions from Miller (1977), we find that firms for which investors have the highest disagreement on valuation, pessimistic views of investors are not fully incorporated into prices, resulting in lower future returns. [ABSTRACT FROM AUTHOR]

The article discusses the need for stronger reform in nursing homes to ensure humane and dignified care for residents. The new rule mandates a minimum of 3.48 hours of care staff time per resident per day, which is lower than the current average staffing level and falls short of the recommended level needed to address residents' basic clinical needs. The article highlights the influence of the nursing home industry, which is owned by corporate entities focused on maximizing profits. It emphasizes the importance of enforcing quality care standards, improving financial integrity, and ameliorating the negative consequences of the new staffing standard. The article calls for meaningful actions to honor the dignity and humanity of nursing home residents. [Extracted from the article]

This study aims to explore the potential impact of the anticipated Georgian Real Estate Investment Trusts (REITs) on the performance of investment portfolios. Due to the absence of Georgian REITs, a simulated financial asset representing a Georgian Residential REIT was engineered. The study employed correlation analysis, portfolio analysis, Sharpe Ratio evaluation, and Efficient Frontier analysis. Portfolios in the study included various assets such as Georgian Commercial Banks USD Certificates of Deposits, Georgian Treasury Bonds, NASDAQ Index, and the Georgian Pension Fund Global Equity Portfolio. Monthly data from 2021-2023 were used to engineer Georgian REIT and estimate expected returns, volatility, Sharpe ratios, and correlation coefficients. The study concludes that incorporating a Georgian REIT into diversified investment portfolios can significantly enhance their attractiveness by improving the riskreturn trade-off. The findings highlight the necessity for Georgian regulators and market participants to consider the introduction of REITs as a viable investment vehicle. Additionally, the research contributes to the limited scholarly literature on REITs' impact in emerging markets, offering a framework for future studies in similar contexts. [ABSTRACT FROM AUTHOR]

This study examines the effectiveness of the regulatory framework of Indian real estate investment trusts (REITs). Interviews were conducted with 30 industry experts using semi-structured questionnaires. The feedback from the interviews was systematically analyzed using content analysis. The original data were categorized into first-level codes and zero-order codes, and further, these codes were used to identify overarching themes. The results indicate that India's existing REIT model is functional and similar to comparable countries, such as the United Kingdom, France, Ireland, and China. However, there is a scope for improvement. To attract retail investors, it is suggested that tax regulations of REITs should be simplified, with a specific focus on the bifurcation of interest and dividend payments to the investors. The results also suggest that the interest received as loan repayment should be deducted from the initial acquisition cost to reduce the investor's capital gain. The study recommends the integration of REITs into the Realty Index to increase investors' confidence. It also suggests revising the treatment of security deposits from the Net Distributable Cash Flow (NDCF), as it is not a direct income of the REIT. These suggestions contribute to filling the gap in the existing literature on Indian REITs. It also offers practical suggestions for policymakers to improve regulatory frameworks and improve investors' confidence. [ABSTRACT FROM AUTHOR]

In recent years, we can observe the growth in the number of investors in the financial market. This work seeks to improve the decision-making process in real estate investment funds (Brazilian REITs). To this end, a literature review was carried out in the Scopus database using bibliometrix to analyze the applications of the multicriteria decision aid (MCDA) in the environment of Brazilian REITs, as a result, it was possible to analyze a greater approach to studies on the toma in Australia, the United Kingdom, the United States, and China. The study was promising because it opens new possibilities of approach and opportunities to cover applications, seeking to explore and use MCDA methods to provide support at all stages of the decision-making process. The literature review was used as a basis for structuring the problem and defining the application of the hybrid PSI-CoCoSo method for ordering Brazilian REITs in the corporate slabs sector traded on the São Paulo stock exchange (B3), the criterion was to address funds that have at least one million reais in daily trading on the stock exchange. As a result, the hybrid method proved to be effective in the ranking process, providing robust results on the application and evaluation of Brazilian REITs. [ABSTRACT FROM AUTHOR]

Are common stocks issued by timberland companies a good investment? Portfolios of large US timberland corporations are compared to simultaneous investments in a diversified US common stock index. Over a 20-year sample period it turns out that the US timberland corporations, on average, perform about as well as the highly diversified US stock market index. It is surprising that the timberland companies do not outperform the stock market indexes because, in order to encourage tree planting, the US Congress has almost completely exempted timberland companies from paying federal income taxes. Furthermore, it is scientifically impossible to assess the value of the large amounts of photosynthesis that the timberland companies produce. As a result of these two ambiguities, it is difficult to state decisively that the timberland companies are better investments than a diversified portfolio of common stocks. However, valuing timberland companies is more practical than endeavoring to value the trees directly. [ABSTRACT FROM AUTHOR]

This research aims to develop a risk-based communication flow in apartment projects with a focus on improving time performance. The methods employed include surveys and case studies, with data collected through the creation and distribution of questionnaires to experts, along with an analysis of results conducted by Company X. The findings indicate that the communication flow implemented at PT. X has proven to be valid and effective. However, several factors hinder the smooth communication flow, such as inadequate planning and scheduling of work, insufficient communication due to mismatched methods and technologies, inefficient information distribution systems, inadequate project budget planning, lack of resources, incomplete scheduling of time and resources, inappropriate listening and speaking skills, lack of empathy among parties, inadequate facilities and infrastructure, emotional conditions, and lack of mastery of communication techniques. Based on these findings, several actions are recommended to enhance communication flow, including improving planning and scheduling of work, using communication methods and technologies appropriate to field conditions, improving information distribution systems, ensuring project budget planning availability, increasing resources, creating comprehensive time and resource planning, enhancing listening and speaking skills, improving empathy among parties, upgrading facilities and infrastructure, controlling emotional conditions, and enhancing mastery of communication techniques. By implementing these recommendations, it is hoped that the communication flow in apartment projects can operate more effectively and efficiently, thereby improving overall project time performance. [ABSTRACT FROM AUTHOR]

I document a new stylized fact: The higher the degree of institutional ownership (IO) in a portfolio, the more time-varying expected returns rather than changes in expected cash flows drive changes in its valuation. Empirical evidence suggests that institutions' time-varying sensitivity to the risk of holding stocks translates into time-varying expected returns on high-IO stocks. In my model, imperfect risk sharing between different types of investors generates cross-sectional differences in return predictability based on ownership, even among a priori identical stocks. My findings suggest an economic rationale for weak return predictability of small stocks and predictability reversals of stocks and real estate investment trusts. [ABSTRACT FROM AUTHOR]

We study private funds available to retail investors of modest wealth. Our sample covers unlisted real estate investment trusts (REITs) for superior cash flow and fee data. Fee structures are skewed toward performance-insensitive components of the compensation contract, particularly front-end loads. The average unlisted REIT underperforms the listed benchmark by 6.5% per year, 5% of which is attributable to fees. Unlisted REITs underperform institutional-grade private equity real estate funds. Fees paid to investment advisors also explain fundraising success, while past performance does not. The underperformance is consistent with the consequences of managerial conflicts of interest, inadequate governance mechanisms, opaque disclosure, and poor investment advice. [ABSTRACT FROM AUTHOR]