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| The Financial Performance of REITs
Following Initial Public Offerings Author: Roger M. Shelor and Dwight C. Anderson Start Page: 375 Abstract: This study examines
changes in operating performance among real estate investment trusts following an initial
public offering (IPO). The purpose is to determine whether there is an enhancement in the
value of the underlying asset that is related to the IPO. We separately analyze equity,
mortgage and diversified REITs. We also compare the operating performance of recent IPOs
to those of earlier years to address the impact of the 1993 Revenue Reconciliation Act on
institutional investors’ demand for REIT stock. Unlike previous analyses of
industrial firms, REITs were found to have significant increases in Return on Assets and
selected measures of financial performance. The post-IPO cumulative stock price decline
and recovery is illustrated. |
