Are REIT Investors Overly Optimistic after Equity Offerings? Evidence from Analyst Forecast Errors

Journal of Real Estate Finance and Economics, Forthcoming

Posted: 5 Nov 2019

See all articles by Elizabeth Devos

Elizabeth Devos

Eastern Michigan University

Erik Devos

University of Texas at El Paso - College of Business Administration - Department of Economics and Finance

Seow‐Eng Ong

National University of Singapore (NUS)

Andrew C. Spieler

Hofstra University - Department of Finance

Date Written: October 25, 2019

Abstract

Optimism around Initial Public Offerings is well documented. However, Seasoned Equity Offerings are often surrounded by less optimism. Based on analyst forecast properties for a large number of REITs, we find that REIT analysts tend to be relatively optimistic after IPOs, whereas this tends not to be the case surrounding SEOs. Our results are more pronounced when REITs are bigger and have more analysts following them. Our results are robust for a number of multivariate specifications. Our findings suggest that possible underperformance of REITs after the IPO may be caused by over-optimistic stock markets.

Keywords: REIT, Over-optimism, IPO, SEO, Analyst behavior

Suggested Citation

Devos, Elizabeth and Devos, Erik and Ong, Seow‐Eng and Spieler, Andrew, Are REIT Investors Overly Optimistic after Equity Offerings? Evidence from Analyst Forecast Errors (October 25, 2019). Journal of Real Estate Finance and Economics, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3475603

Elizabeth Devos

Eastern Michigan University ( email )

Eastern Michigan University
Ypsilanti, MI 48197
United States

Erik Devos (Contact Author)

University of Texas at El Paso - College of Business Administration - Department of Economics and Finance ( email )

500 W. University Ave.
El Paso, TX 79968
United States
915 747 7770 (Phone)

HOME PAGE: http://utminers/utep.edu/hdevos

Seow‐Eng Ong

National University of Singapore (NUS)

1E Kent Ridge Road
NUHS Tower Block Level 7
Singapore, 119228
Singapore

Andrew Spieler

Hofstra University - Department of Finance ( email )

Hempstead, NY 11550
United States

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