Are REIT investors overly optimistic after equity offerings?: Evidence from analyst forecast errors
Accounting and Finance
Journal of Real Estate Finance and Economics
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 investors.
Link to Published Version
Devos, E., Devos, E., Ong, S. E., & Spieler, A. C. (2019). Are REIT investors overly optimistic after equity offerings?: Evidence from analyst forecast errors. The Journal of Real Estate Finance and Economics, 59(2), 148–165. https://doi.org/10.1007/s11146-017-9608-1