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REIT Capital Structure Choices: Preparation Matters

dc.contributor.authorPavlov, Andrey
dc.contributor.authorSteiner, Eva
dc.contributor.authorWachter, Susan
dc.date.accessioned2020-09-12T21:03:40Z
dc.date.available2020-09-12T21:03:40Z
dc.date.issued2016-02-29
dc.description.abstractSun, Titman, and Twite (2015) find that capital structure risks, namely high leverage and a high share of short-term debt, reduced the cumulative total return of US REITs in the 2007-2009 financial crisis. We find that mitigating capital structure risks ahead of the crisis by reducing leverage and extending debt maturity in 2006, was associated with a significantly higher cumulative total return 2007-2009, after controlling for the levels of those variables at the start of the financial crisis. We further identify two systematic cross-sectional differences between those REITs that reduced capital structure risks prior to the financial crisis and those that did not: the exposure to capital structure risks and the strength of corporate governance. On balance, our findings are consistent with the interpretation of risk-reducing adjustments to capital structure ahead of the crisis as a component of managerial skill and discipline with significant implications for firm value during the crisis.
dc.description.legacydownloadsSteiner2_REIT_capital_structure.pdf: 285 downloads, before Aug. 1, 2020.
dc.identifier.other9251511
dc.identifier.urihttps://hdl.handle.net/1813/71610
dc.language.isoen_US
dc.rightsRequired Publisher Statement: © Wiley. This is the pre-peer reviewed version of the following article: Pavlov, A., Steiner, E. & Wachter, S. (2016). REIT capital structure choices: Preparation matters. Real Estate Economics. doi: 10.1111/1540-6229.12155. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving.
dc.subjectreal estate investment
dc.subjectleverage
dc.subjectfinancial crisis
dc.titleREIT Capital Structure Choices: Preparation Matters
dc.typearticle
local.authorAffiliationPavlov, Andrey: Simon Fraser University
local.authorAffiliationSteiner, Eva: ems457@cornell.edu Cornell University School of Hotel Administration
local.authorAffiliationWachter, Susan: University of Pennsylvania

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