Abstract
This paper examines the conversion-related M&A activity and the post-conversion performance of 80 Real Estate Operating Companies (REOCs) adopting the Real Estate Investment Trust (REIT) status. We observe a distinct, higher M&A activity in the years around the conversion dates and relatively high premiums in conversion-related deals. The REIT format attracts equity inows from investors, which ...
Abstract
This paper examines the conversion-related M&A activity and the post-conversion performance of 80 Real Estate Operating Companies (REOCs) adopting the Real Estate Investment Trust (REIT) status. We observe a distinct, higher M&A activity in the years around the conversion dates and relatively high premiums in conversion-related deals. The REIT format attracts equity inows from investors, which explains increased post-conversion M&A activity. Overall, converted REITs realize positive excess returns. Lower (higher) M&A activity before the conversion translates to superior absolute (risk-adjusted) post-conversion performance indicating bene_ts from strategic company realignment.
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