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| REIT Pricing Efficiency; Should
Investors Still Be Concerned? Author: Scott D. Below, Joseph K. Kiely, and Willard McIntosh Start Page: 397 Abstract: This study examines
the impact of the REIT boom on the market microstructure of REIT common stocks. We analyze
NYSE-traded REITs during the pre-boom period (1992) and the post-boom period (1994), and
find significant reductions in bid/ask spreads over the period. We also find that the
bid/ask spread differential between REITs and non-REITs has been roughly halved between
1991 and 1994. These reductions provide a direct benefit to REIT investors in terms of
reduction in transaction costs and improved liquidity, and suggest that the level of
uncertainty on the part of the REIT specialist has been reduced. |
