What is it about?

This paper study the relationship between risk and the use of taxable real estate investment trusts (REITs) subsidiary (TRS).

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Why is it important?

Although the relationship between risk and returns has been largely studied in the finance field, still there is a gap in REIT literature about the relation between REIT return volatility and the use of TRS’s.


In spite of the fact that TRS-REITs’ portfolio is riskier than non-TRS-REITs, its assets can be easier converted to cash without affecting to much its prices. When S & P500 is used as benchmark the TRS-REITs’ portfolio requires a larger number of securities to obtain similar levels of diversification as non-TRS portfolio.

Professor Juan C Cardona
Kalamazoo College

Read the Original

This page is a summary of: Do taxable REIT subsidiary spell risk for REITs? An empirical examination, Journal of Property Investment & Finance, July 2016, Emerald,
DOI: 10.1108/jpif-09-2015-0066.
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