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| The Historical Performance of Real
Estate Investment Trusts Author: Jun Han and Youguo Liang Start Page: 235 Abstract: This empirical study
investigates the performance of Real Estate Investment Trusts (REITs). Although many
people have studied REIT performance, their findings on the long-term performance of REITs
are generally inconclusive. The objectives of this study are: (1) to evaluate the
long-term (1970-1993) performance of REITs; (2) to examine the stability of REIT
performance over time; and (3) to investigate the sensitivity of a specific performance
measure, the Jensen index, to two general performance benchmarks and two REIT samples. The
results indicate that the performance of the REIT portfolios was consistent with the
security market line for the 1970-1993 period. However, REIT performance varied over the
period. This study also found that the use of the unrepresentative S&P 500 index as a
performance benchmark tends to overstate REIT performance. Finally, survivor REITs in
general performed better than the overall REIT population. |
