scholarly journals The Impact of Corporate Real Estate Ownership on the Firm Value

2021 ◽  
Vol 7 (3) ◽  
pp. 163-183
Author(s):  
Gwang Ho Han ◽  
Hye Eun Han ◽  
Seung Han Ro
Keyword(s):  
Real Estate ◽  
Firm Value ◽  
Corporate Real Estate ◽  
The Impact ◽  
Estate Ownership

Real estate ownership and closely-held firm value

2014 ◽  
Vol 32 (3) ◽  
pp. 229-243 ◽  
Author(s):  
John Edward Graham ◽  
Craig Galbraith ◽  
Curt Stiles
Keyword(s):  
Small Business ◽  
Real Estate ◽  
Small Businesses ◽  
Business Strategy ◽  
Firm Value ◽  
Private Equity ◽  
Data Set ◽  
Content Type ◽  
The Impact ◽  
Estate Ownership

Purpose – The authors aim to measure the value of leasing, versus owning, business locations for the closely-held firm. Design/methodology/approach – The authors examine the sales transactions of small businesses in the USA – those with revenues of less than $20 million per year – between 1995 and 2010. The authors contrast the values of firms that own, and do not own, their real estate. Findings – In general, the authors find negative relationships between closely-held firm values and real estate ownership. Nowhere did the authors observe firm value being enhanced by property ownership. Research limitations/implications – The data set may be limited by the accuracy of the data provided by business brokers. Compared to the capital markets, the small business “exchange” is less efficient, but it is the only source of unlisted business sales data. Practical implications – The findings are important to the small-business broker and the investor. The broker might better advise the buyer and seller with the findings. Business owners, private equity investors, and their advisors, are all reminded to focus on the core business strategy and avoid getting “locked into” real estate ownership in a business investment. Originality/value – The impact of real estate on the valuations of closely-held firms is a largely unexamined area. And there is a lack of consistency on publicly-held company valuations as a function of real estate ownership; these public company findings and the dearth of work on the privately-held company's real estate attract the attention in this study.

scholarly journals Risk and Real Estate Ownership: Empirical Evidence of Hotels in Singapore

1970 ◽  
Vol 2 ◽  
pp. 193-200
Author(s):  
Fawzla Farzana ◽  
Md Ghulam Murtaza
Keyword(s):  
Real Estate ◽  
Systematic Risk ◽  
Least Square ◽  
Real Property ◽  
The Real Estate ◽  
Corporate Real Estate ◽  
Negative Effect ◽  
Hotel Sector ◽  
The Impact ◽  
Estate Ownership

This paper examined the impact of real property ownership on the systematic risk of hotel companies in Singapore. This issue is interesting because few studies have been carried out on this topic. The hypothesis is that the real estate ownership would impose negative effect on the systematic risk of company in hotel sector because corporate real estate is commonly considered as an instrument for diversification in a mixed portfolio. To examine the effect, two-stage least-square regression was applied. The data was collected from published sources and other data streams. The results indicate that real estate ownership has impact on the systematic risk of companies. The implication is that the different strategies of companies may result in the different directions of impacts.DOI: http://dx.doi.org/10.3329/jbip.v2i0.9579  Journal of Bangladesh Institute of Planners Vol. 2, December 2009, pp. 193-200

Corporate real estate, capital structure and value creation

2017 ◽  
Vol 10 (3) ◽  
pp. 384-404 ◽  
Author(s):  
Maria-Teresa Bosch-Badia ◽  
Joan Montllor-Serrats ◽  
Anna-Maria Panosa-Gubau ◽  
Maria-Antonia Tarrazon-Rodon
Keyword(s):  
Real Estate ◽  
Capital Structure ◽  
Structure Theory ◽  
Trade Off ◽  
Content Type ◽  
Default Option ◽  
Bankruptcy Costs ◽  
Corporate Real Estate ◽  
Tax Savings ◽  
The Impact

Purpose This paper aims to analyse the corporate rent-vs-buy decision on real estate through the trade-off theory and default option in the framework of a corporation that aims to optimise its capital structure. Design/methodology/approach The methodological core of this paper comprises the trade-off theory that approaches the optimal capital structure by counterbalancing debt tax savings with bankruptcy costs. Impacts on the default option and the default barrier are made explicit. The paper also explores the practical applicability of the renting scenarios in the European context by examining the regimes of real estate investment trusts in different countries from the demand-side of commercial renting. Findings Analytical relationships with tax savings, bankruptcy costs, default option and default barrier are identified for the renting-vs-buying real estate decisions. Research limitations/implications The theoretical model assumes simplifications, such as constant debt, to make it operational. The paper centres exclusively on the trade-off capital structure theory. Practical implications This paper is an analysis of corporate real estate decisions together with capital structure. Applications are not only quantitative but also conceptual and strategic. Originality/value Identifying the main variables that govern the impact of corporate real estate decisions on capital structure and interweaving different approaches generates a conceptual framework that enlightens strategic thinking in this field.

Corporate Real Estate Ownership and Productivity Uncertainty

2015 ◽  
Vol 44 (2) ◽  
pp. 521-547 ◽  
Author(s):  
Daxuan Zhao ◽  
Tien Foo Sing
Keyword(s):  
Real Estate ◽  
Corporate Real Estate ◽  
Estate Ownership

scholarly journals THE IMPACT OF STRUCTURAL CHANGES ON CORPORATE REAL ESTATE OWNERSHIP: EVIDENCE FROM GERMANY

2020 ◽  
Vol 0 (0) ◽  
pp. 1-16
Author(s):  
Julian Seger ◽  
Andreas Pfnür
Keyword(s):  
Structural Change ◽  
Real Estate ◽  
Structural Changes ◽  
Ownership Strategy ◽  
Requirements Change ◽  
Corporate Real Estate ◽  
New Business ◽  
Company Survey ◽  
Business Requirements ◽  
The Impact

Although real estate resources represent a high percentage of the corporate assets of non-property companies, their future role is unclear. Longevity and difficulty in revising property-related decisions clash under dynamically changing environmental conditions. This makes it necessary to consider the ownership strategy and its altering role in order to avoid inefficiencies and not to hinder companies in mastering structural change successfully. In a first step, data from a telephone company survey (CATI) among 69 corporate real estate managers of German companies are grouped by performing a two-step cluster analysis according to the degree to which they are affected by structural change. The resulting clusters are then tested regarding differences in their ownership strategy. The empirical analysis shows that firms highly affected by structural change exhibit a higher willingness to decrease the proportion of ownership. The decline in real estate assets is particularly evident in the office segment and in increased acceptance of sale-and-rent-back solutions. First hints show that structural change and associated new business requirements change the relevance of CRE ownership. To avoid competitive disadvantages, especially European firms should scrutinize their high ownership ratios.

International Real Estate Review

2012 ◽  
Vol 15 (1) ◽  
pp. 107-126
Author(s):  
Hongyan Du ◽  
◽  
Yongkai Ma ◽  
Keyword(s):  
Real Estate ◽  
Stock Returns ◽  
Positive Impact ◽  
Abnormal Returns ◽  
Systematic Risk ◽  
Stock Performance ◽  
Significant Difference ◽  
Corporate Real Estate ◽  
Systematic Risks ◽  
The Impact

This paper attempts to study the relationships among corporate real estate (CRE), capital structure and stock performance of China¡¦s non-real estate firms, including the bidirectional relationships between debt ratio (DR) and corporate real estate ratio (CRER), the impact of CRER on stock performance, and whether this impact differs across firms with different debt levels. The results show that for the overall sample, DR has a positive effect on CRER, while CRER negatively affects DR. CRER has no significant positive impact on the abnormal returns of stocks, and even decreases those for firms in the information industry. However, it can significantly reduce the systematic risks of stock returns. Moreover, we find that CRER has no significant effect on abnormal returns regardless of the amount of debt level that a firm has, and there is no significant difference between the effects of CRER on abnormal returns for firms with different levels of debt. On the other hand, the effect of CRER on systematic risk is significantly negative for firms in the low debt group, and insignificantly positive for firms in the high debt group. The CRER of lower debt firms can significantly reduce much more systematic risk than that of the high debt firms.

The risk of real estate ownership: evidence from German equities

2015 ◽  
Vol 8 (2) ◽  
pp. 107-129 ◽  
Author(s):  
Karim Rochdi
Keyword(s):  
Risk Factors ◽  
Real Estate ◽  
Risk Premium ◽  
Balance Sheet ◽  
Systematic Risk ◽  
Considerable Proportion ◽  
Content Type ◽  
Corporate Real Estate ◽  
Systematic Risk Factors ◽  
Estate Ownership

Purpose – This paper aims to investigate the repercussions and impact of corporate real estate on the returns of non-real-estate equities in a time-series setting. While the ownership of real estate constitutes a considerable proportion of most listed firms’ balance sheet, in the existing literature, whether or not the benefits outweigh the risks associated with corporate real estate, is the subject of controversy. Design/methodology/approach – The role of corporate real estate ownership in the pricing of returns is examined, after taking well-documented systematic risk factors into account. Employing a data sample from 1999 to 2014, the conditions and characteristics faced by firms with distinct levels of corporate real estate holdings are identified and analyzed. Findings – The findings reveal that corporate real estate intensity indeed serves as a priced determinant in the German stock market. Among other results, the real-estate-specific risk factor shows countercyclical patterns and is particularly relevant for companies within the manufacturing sector. Practical implications – The findings provide new insights into the interpretation of corporate real estate and expected general equity returns. Thus, the present analysis is of particular interest for investors, as well as the management boards of listed companies. Originality/value – To the best of the author’s knowledge, this is the first paper to investigate the ownership of corporate real estate as a priced factor for German equities, after accounting for the well-documented systematic risk factors, namely, market (market risk premium), size (small minus big) and book-to-market-ratio (BE/ME) (high minus low).

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