Captive-Financing Affiliates, Agency Costs, and the Security Offerings of Real Estate Investment Trusts.
Date of Award
Doctor of Philosophy (PhD)
Finance (Business Administration)
C. F. Sirmans
This dissertation explores the agency problems of REITs caused by the conflicts of interest between the REIT sponsor and the REIT shareholders. It also tests the impact of the agency problems on the pricing of REIT initial public offerings (IPOs) and on the valuation effects of secondary debt and equity offerings. Like the IPOs of ordinary corporations, REIT IPOs are also underpriced; however, the magnitude of the underpricing is far lower than that of the IPOs for ordinary corporations. Captive REITs have greater underpricing in IPOs than non-captive REITs. REIT secondary equity offerings exhibit negative announcement effects, while secondary debt offerings show no announcement effects. Captive REITs do not have significantly different valuation effects for secondary debt and equity offerings than those of non-captive REITs.
Hsieh, Cheng-ho, "Captive-Financing Affiliates, Agency Costs, and the Security Offerings of Real Estate Investment Trusts." (1990). LSU Historical Dissertations and Theses. 4923.