Author: H. Swint Friday, G. Stacy Sirmans and C. Mitchell Conover

Start Page: 71
End Page: 90
Volume: 17
Issue Number: 1
Year: 1999
Publication: Journal of Real Estate Research

Abstract: This article examines the relation between ownership structure and firm value as proxied by market-to-book ratios for real estate investment trusts (REITs) over the period 1980 to 1994. Piecewise regression analysis reveals a nonlinear relationship between REIT market-to-book ratios and ownership structure. Low levels of inside ownership are associated with increased market-to-book ratios for equity REITs. However, as inside block ownership rises above 5%, equity REIT market-to-book ratios decline. The opposite result is true for hybrid and mortgage REITs. Similarly, higher levels of outside blockholdings have a negative impact on both equity and hybrid and mortgage market-to-book ratios.