Current Working Papers

REIT Ownership and Property Performance: Evidence from the Lodging Industry

Johnny Lee, Villanova School of Business
Mi Luo, Villanova School of Business
Shawn D. Howton, Director, Daniel M. DiLella Center for Real Estate, Villanova School of Business
Shelly W. Howton, Villanova School of Business

Prior research on the impact of REIT ownership on property performance is very limited and provides inconclusive empirical evidence. Whether REITs add value at the micro-level remains a puzzle. Utilizing a unique dataset of detailed accounting information for individual hotels across 5 US states, we re-examine the performance of REIT-owned properties. Unlike prior research that focuses on revenue-based performance measures, our dataset allows us to examine both the top-line and bottom-line performance of hotel operations. We find that REIT ownership favorably impacts property performance in that REIT-owned hotels have higher profit margins than other lodging properties. The greater cost efficiency is likely attributable to savings in non distributed operating expenses and fixed charges. We find no outperformance by REITs in revenue growth.

The Impact of Option Introduction on Real Estate Investment Trusts

Johnny Lee, Villanova School of Business
Mi Luo, Villanova School of Business
Shawn D. Howton, Director, Daniel M. DiLella Center for Real Estate, Villanova School of Business
Shelly W. Howton, Villanova School of Business

This paper examines the impact of option introduction on the returns, volatility, and volume of shares traded of the Real Estate Investment Trusts (REITs) that underlie the new derivative securities. The paper looks at both the initial and then longer term impact on each of these variables and then compares the impact to what previous research finds when options are introduced on non-REIT equities. We find evidence of an initial decline in price when option introduction is announced and also find significant negative returns over a longer post announcement period. There is not a significant change in volatility at option introduction but we do find a significant increase in trading volume. We find that in most of the areas examined, REITs have a similar reaction to option introduction as do non-REIT equities.

Recent Publications

Please contact Shawn Howton to learn more about recent center publications.

Do REIT announcements of open market repurchase programs signal value changes in rivals?
Dean Diavatopoulos; Andy Fodor; Shawn D. Howton; Shelly W. Howton
Journal of Real Estate Portfolio Management; 2010; 16(2), 131-140.

The Predictive Power of REIT Implied Volatility and Implied Idiosyncratic Volatility
Dean Diavatopoulos; Andy Fodor; Shawn D. Howton; Shelly W. Howton
Journal of Real Estate Portfolio Management; 2010; 16(1), 29-39.

Shareholder wealth effects of private placements of debt made by REITs
Eric Higgins; Shawn D Howton; Shelly W. Howton
Briefings in Real Estate Finance; January 2004; 3, 4, pg. 305.

Equity vs debt financing of REITs: A survey of determinants of the security issue decision
Shawn D Howton; Shelly W. Howton; Victoria McWilliams
Briefings in Real Estate Finance; January 2003; 3, 2, pg. 147.

The wealth effects of REIT straight debt offerings
Shawn D Howton; Shelly W Howton
Journal of Real Estate Portfolio Management; Apr-Jun 2001; 7, 2; pg. 151.

Long run underperformance in REITs following seasoned equity offerings
Shawn D Howton; Shelly W Howton; H Swint Friday
Journal of Real Estate Portfolio Management; Oct-Dec 2000; 6, 4; pg. 355.

Anomalous evidence on operating performance following seasoned equity offerings: The Case of REITs
H Swint Friday; Shawn D Howton; Shelly W Howton
Financial Management; Summer 2000; 29, 2; pg. 76.

The relationship between size and return for foreign real estate investments: An analysis of the cross section of returns for EREITS using a varying-risk beta model
Mitchell C Conover; H Swint Friday; Shelly W Howton
Real Estate Economics; Spring 2000; 28, 1; pg. 141.