Olgun Sahin has paper accepted for publication in accounting and finance journal

Olgun Sahin has paper accepted for publication in accounting and finance journal

Olgun Sahin, School of Business, has had a paper accepted for publication in the Journal of Accounting and Finance, scheduled to be published in Volume 12 (1), Winter 2012. The paper, “Non-traded REITs,” was presented at the Academy of Finance meeting in March 2011. The abstract of the paper is below.

Non-traded REITs Abstract

(This is the version submitted for review; the final print copy will be shorter.)

In this paper, I examine differences between non-traded and traded REITs by using available financial data. I also attempt to quantify the effects of no listing on REIT valuation. Findings indicate that there are many differences along a number of dimensions between non-traded and traded REITs. For example, non-traded REITs hold fewer properties, employ lower leverage, generate lower return on invested capital (ROIC) and funds from operations (FFO) and pay a greater fraction of their income in dividends. There does not appear to be significantly different dividend yields.  I attribute the claims of a higher dividend yield on non-traded REITs to differences in dividend yield computations. Non-traded REITs also seem to have lower market-to-book multiples if they were publicly traded. These findings have public policy implications especially considering how their dividends may be funded and how non-traded REIT shares are purchased.  For example, a mandate on how dividends are financed (through operating income) would make non-traded REITs even more credible to investors. In addition, it is not clear what justifies high transaction costs associated with investing in non-traded REITs.  It does not appear to be superior ROIC generated by non-traded REITs.