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Preferences of institutional investors in commercial real estate
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Cvijanović, Dragana, Milcheva, Stanimira and van de Minne, Alex (2022) Preferences of institutional investors in commercial real estate. The Journal of Real Estate Finance and Economics, 65 . pp. 321-359. doi:10.1007/s11146-020-09816-y
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WRAP-preferences-institutional-investors-commercial-real-estate-Cvijanović-2021.pdf - Published Version - Requires a PDF viewer. Available under License Creative Commons Attribution 4.0. Download (1432Kb) | Preview |
Official URL: http://dx.doi.org/10.1007/s11146-020-09816-y
Abstract
In this paper we analyze market segmentation by firm size in the commercial real estate transaction process. Using novel micro-level data, we look at the probability distribution of investors acquiring a specific bundle of real estate characteristics, distinguishing between investors based on the size of their real estate portfolio. We find evidence of market segmentation by investor size: institutional investors segment across property characteristics based on the size of their real estate portfolio. The probability that a large (small) seller will sell a property to a similar-sized buyer is higher, keeping all else equal. We explore potential drivers of this market segmentation and find that it is mainly driven by investor preferences. During the Global Financial Crisis (GFC), large investors were less likely to buy the ‘average’ property, as compared to the period before or after the crisis, indicating time-varying investor preferences.
| Item Type: | Journal Article | ||||||||
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| Subjects: | H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HF Commerce H Social Sciences > HG Finance |
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| Divisions: | Faculty of Social Sciences > Warwick Business School > Finance Group Faculty of Social Sciences > Warwick Business School |
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| Library of Congress Subject Headings (LCSH): | Institutional investors , Real estate investment, Market segmentation | ||||||||
| Journal or Publication Title: | The Journal of Real Estate Finance and Economics | ||||||||
| Publisher: | Springer | ||||||||
| ISSN: | 0895-5638 | ||||||||
| Official Date: | August 2022 | ||||||||
| Dates: |
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| Volume: | 65 | ||||||||
| Page Range: | pp. 321-359 | ||||||||
| DOI: | 10.1007/s11146-020-09816-y | ||||||||
| Status: | Peer Reviewed | ||||||||
| Publication Status: | Published | ||||||||
| Access rights to Published version: | Open Access |
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