Geographic Portfolio Allocations, Property Selection and Performance Attribution in Public and Private Real Estate Markets
By Professor David Ling,
McGurn Professor of Real Estate, Department of Finance,
University of Florida,
Abstract
This paper examines the effects of geographic portfolio concentration on the return performance of U.S. public REITs versus private commercial real estate over the 1996-2013 time period. We document significant cross-sectional and temporal differences in the geographic concentration of property holdings across public and private real estate markets. Adjusting private market returns for differences in geographic concentrations with public markets, we find that core private market performance falls. This performance drop arises primarily from lower geographically adjusted retail performance. In contrast, geographically adjusted industrial and office property performance rises slightly while apartment performance remains relatively unchanged. Using return performance attribution analysis, we find that the geographic allocation effect constitutes only a small portion of the total return difference between public and private market returns, whereas individual property selection within geographic locations explains, in part, the documented outperformance of public versus private real estate market returns. This result also suggests that the decision to allocate to a geographic location is relatively less important than the manager’s ability to select and manage properties within that location.
[View Paper]
About the Speaker
David Ling is the McGurn Professor of Real Estate in the Department of Finance at the University of Florida, where he teaches courses in commercial real estate finance and investment at the graduate level. His academic publications have included articles on real estate investment trusts, private commercial real estate investments, performance evaluation, housing policy and economics, and commercial and residential mortgage markets and pricing.
Professor Ling is both a Fellow and faculty member of the Weimer School of Advanced Studies in Real Estate, a non‐profit research and educational institute. Ling is also a Fellow and advisory board member of the Real Estate Research Institute, a Fellow of the Royal Institution of Chartered Surveyors (FRICS), an appointed member of the National Association of Real Estate Investment Trust’s Research Council, and has served as a Distinguished Fellow of The National Association of Industrial and Office Properties. He recently completed a three‐year (part-time) Fellowship in The Department of Land Economy at the University of Cambridge and has also served as a visiting professor at the University of Reading and the National University of Singapore.
Professor Ling holds an MBA in finance and Ph.D. in economics and real estate from the Ohio State University.
[View CV]
Seminar Details
| Date |
Friday, 22 January 2016 |
| Time |
4pm - 5:30pm |
| Venue |
Singapore Management University
School of Economics
Meeting Room 5.1
|
| Address |
90 Stamford Road
Singapore 178903
(Click here for map) (Building #6)
|
| Register |
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