Does Corporate Social Responsibility Vary by Real Estate Asset Types? Evidence from Real Estate Investment Trusts

This paper investigates how real estate investment trusts’ corporate social responsibility (CSR) (REITs) varies by two intrinsic firm factors: real estate asset types and REITs’ financial aspirations. We develop a conceptual model to demonstrate the theoretical role of these intrinsic firm factors in moderating CSR. Using a database containing the Morgan Stanley Capital International CSR rating index, we test REITs from 19 countries for variations of their CSR performance across each of the three pillars of CSR: environment, social, and governance (ES&G) by real estate asset types from 2009 to 2016. The results show that REITs focusing on less market-transparent real assets relying heavily on intensive human-based services and physical capital in property management like hotels and hospitals exhibit a poorer performance in environmental responsibility, social responsibility, and overall CSR score. We found no significant difference between the REITs in their governance responsibility with respect to the real estate asset types. We found that moderation by financial aspiration in establishing their CSR strategies varies by the types of real estate asset that REITs focus on, with the maximum positive impact on REITS with hotel holdings and negative impact on REITs with office and retail assets.

The financialization of rented homes: continuity and change in housing financialization

This paper has two purposes: the first is to offer an empirical account of how rented homes have become more entangled in financial markets over the past two decades, particularly through the advent of real estate investment trusts (REITs) and listed real estate operating companies (REOCs). The second is to assess whether conceptualizing this as a process of “rental housing financialization” — distinct from but connected to the broader concepts of “housing financialization” and “financialization” — offers value to the scholarly community.

Empirical analysis of the illiquidity premia of German real estate securities

In this study, we analyze illiquidity premia and their effect on the expected returns of German real estate securities. To this end, we use a unique data set that includes real estate stocks, real estate investment trusts (REITs), and open- and closed-end real estate funds for 2003–2017. We follow Amihud’s (JFM 5:31–56, 2002) structural approach; specifically, we estimate Amihud’s illiquidity factors, investigate the relationships between expected returns and illiquidity, and analyze the effects of expected and unexpected market illiquidity on future returns. We show that illiquidity plays an important role in expected returns for real estate stocks and investment trusts (REITs); however, it has less clear effects on open- and closed-end funds. We find that the adjusted ILLIQ includes appropriate correction factors for securities with low trading activity and is a useful improvement. We also find evidence of structural breaks in the relationship between returns and illiquidity.

The Explanatory Power Of Alternative Income Measures On Stock Prices: Evidence for Canadian Real Estate Investment Trusts

The relationship between performance measures and stock prices is well documented in the financial literature. Some studies find that the relationship is positive (Lev, 1989) and others find a negative relationship (Anwaar, 2016, Sloan, 1996), although most studies exclude REITs due to their unique tax exemptions. This paper examines the explanatory power of net income (NT) and funds from operations (FFO) as it relates to stock return in Canadian real estate investment trusts (REITs) that traded on the Toronto Stock Exchange (TSE) during the 2001-2016 period. Legislation exempts Canadian REITs from corporate taxes as long as they satisfy a number of mandated requirements. The most essential legal requirement is the payment of dividend as a specified percentage of a REITs cash flow. Industry-specific cash flow measures, such as NI, FFO, or cash flow distributions may explain their stock are return performance in Canada. In particular, FFO my explain stock return performance better than NI or distribution due to its unique qualities. Analysis on a hand-collected and proprietary Canadian REIT quarterly data set that covers 2001 to 2016 reveals that FFO does in fact have better explanatory power than NI, consistent with studies of U.S. REITs.