33 research outputs found

    Board of Director Monitoring and Firm Value in REITs

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    This article examines the influence of board of director composition and characteristics on real estate investment trust (REIT) shareholder wealth as measured by firm market-to-book ratios. Results show that increased outside director representation on the board leads to increased market-to-book ratios up to a point. However, as outside representation becomes too large, the market discounts REIT shares. In addition, a positive relationship is observed between REIT market-to-book ratios and the dollar values of director ownership, providing support for alignment benefits associated with increased director stock ownership.

    Affinity Programs and the Real Estate Brokerage Industry

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    This study surveys active real estate brokers obtaining information on involvement in affinity programs and referral/relocation networks. Some results regarding affinity involvement are: (a) 13% of respondents reported affinity affilliations, 75% reported no affiliations, and 12% indicated plans to become involved within the next year; (b) about half having affinity affiliations were involved with 2-4 groups; (c) affinity relationships were most often with membership organizations, corporations, and professional organizations; (d) the primary affinity benefits provided were commission reductions, special mortgage packages, and discounted closing services; (e) 38% of respondents reported an increase in profitability die tp affinity affiliation while 21% reported a decrease; and (f) 56% reported an increase in agent productivity. An empirical income model shows that affinity affiliation has a positive effect on broker income. The probit models shows that: (a) participation in affinity arrangements is more likely for larger firms and national franchises but is not sensitive to location; and (b) large firms are more likely to participate in a larger number of affinity relationships.

    Determining Real Estate Licensee Income

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    This article examines the determinants of real estate licensee income using a 1997 survey of Texas real estate licensees. The factors having a positive effect on licensee income include: (1) number of hours worked; (2) work experience; (3) being a male; (4) using computer technology; (5) being involved in more transactions; (6) holding professional designations; (7) being associated with a larger firm; and (8) having access to personal assistants. Variables that negatively affect income include: (1) age; (2) selling primarily residential properties; and (3) having more affiliations. The results of this study, combined with previous studies, indicates that the high-earning real estate licensee is a younger male with more experience who: (1) works more hours; (2) has job satisfaction; (3) holds professional designations; (4) has access to personal assistants; and (5) utilizes a personal computer.

    Determinants of Real Estate Licensee Income

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    This paper examines the factors that influence the income of real estate licensees. An empirical human capital earnings model is developed from a 1995 survey of Florida real estate brokers and salespeople. In seeking to explain earnings of real estate licensees, this study expands from previous studies by measuring several additional human capital components. A number of factors are seen to positively affect licensee income. These include (a) number of hours worked, (b) experience, (c) franchise affiliation, (d) being an owner/manager, (e) working in a metropolitan area, (f) level of job satisfaction, and (g) having errors and omissions insurance. Variables that have a negative effect on income include (a) being a female, (b) selling primarily residential properties, (c) age of licensee, (d) image perception, and (e) working weekends. Segmenting the data by income into thirds and comparing the means of the variables for the high- and low-income groups, several variable means are significantly different. the high income group has significantly higher means for these variables: (a) hourly income, (b) number of hours worked, (c) working full-time, (d) working on the weekend, (e) utilizing correspondence to satisfy continuing educational requirements, (f) work experience, (g) membership in clubs/professional organizations, (h) holding a broker's license, (i) length of current affiliation, (j) being a manager/owner, (k) holding professional designations, and (l) belonging to the state's Realtor association. The low-income group has a significantly higher variable mean for participation in residential sales.

    Mass Transportation, Apartment Rent and Property Values

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    Rent plays a vital role in property valuation because any positive or negative influence on rent will in turn affect a property's value. This paper examines the effect of mass transportation on apartment rent. Specifically, this study investigates the impact on rent and value for residential income properties located in close proximity to Washington, D.C. Metrorail stations. After reviewing the empirical research which has focused on the effect of mass transportation availability on property values, this paper examines the benefits on apartment rent of Washington, D.C. apartment buildings from location near Metrorail stations. Our empirical results show that distance from a metro station has an adverse impact on apartment rent, i.e., each one-tenth mile increase in distance from the station results in a decrease in rent per apartment unit of about 2.50%. This analysis should be of interest to a host of domestic and international market participants including academics who study real estate markets, tax assessors who determine market value, appraisers who make market-derived rent adjustments, and property managers who set apartment rents.

    Rental Concessions and Property Values

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    This paper examines apartment rental concessions and their effect on property values through apartment rent and occupancy rates. A simultaneous equation model is used to estimate rent and occupancy equations in linear, semilog, and logged form. The results show that rental concessions have a positive effect on both rent and occupancy rates. This would indicate that concessions have a positive effect on property values since higher capitalized value should follow. The results also reveal that various amenities and services provided by apartment units have significant effects on rent.

    Apartment Rent, Concessions and Occupancy Rates

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    This paper examines the effects of rental concessions on apartment rent and occupancy rates. Using limited-information maximum likelihood estimation, equations for rent, occupancy, and concessions show that landlord-supplied rental concessions have a positive effect on both rent and occupancy rates. Rental concessions seem to provide the landlord a means to collect higher average rent and at the same time to increase occupancy rates. The results also indicate that a negative relationship exists between rent and occupancy rates and that certain amenities, services, and occupancy restrictions influence rent.

    Do Management Changes Matter? An Empirical Investigation of REIT Performance

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    Management’s (board of directors or executive officers) contribution to a firm is difficult to directly observe, although stock return performance can be a source of information. This study addresses this issue by extending the work of McIntosh, Rogers, Sirmans and Liang (1994) by analyzing management changes within REITs from 1984 to 2002. The findings indicate a significant relationship between negative performance and a management change from a period three months prior to the change in management. Logit and probit analysis are used to determine whether negative firm performance (measured by its relationship to market returns) can predict the likelihood of a management change. No predictive ability is found.

    What Do We Know about Apartments and Their Markets?

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    This paper examines major themes in apartment market research. The intent is to provide an overview of academic studies of the apartment market and to outline directions for future research.

    Real Estate Brokerage and the Hosting Market: An Annotated Bibliography

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    A number of facets of real estate brokerage have been examined over time in theoretical and empirical articles appearing in the literature. This article summarizes brokerage research and suggests avenues for future inquiry. In attempting to organize brokerage research, the research is classified into eight broad topical areas: (1) brokerage firm characteristics; (2) broker commissions; (3) time on the market; (4) broker compensation; (5) the effects of brokerage on house prices; (6) regulation of the brokerage industry; (7) legal liability; and (8) international comparisons. In each area, we point out the major focus of the research by summarizing important findings.
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