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作者

来源

JOURNAL OF REAL ESTATE FINANCE AND ECONOMICS,Vol.57,Issue1SI,P.43-63

语言

英文

关键字

Depreciation; Valuation; Real estate investment trusts; REITs; CLOSED-END FUNDS; PRICE DISCOVERY; FIRM VALUATION; POLICY; EQUILIBRIUM; INFORMATION; LIQUIDITY; REFORM; REITS

作者单位

[French, Dan W.] Univ Missouri, Jeffrey E Smith Inst Real Estate, Dept Finance, Columbia, MO 65211 USA. [Price, S. McKay] Lehigh Univ, Real Estate Finance, Bethlehem, PA 18015 USA. French, DW (reprint author), Univ Missouri, Jeffrey E Smith Inst Real Estate, Dept Finance, Columbia, MO 65211 USA. E-Mail: frenchdan@missouri.edu

摘要

We develop a model for valuing U.S. real estate investment trusts (REITs) that considers the tax liability impounded in REITs' property portfolios. This liability is a function of the portfolio's accumulated depreciation and is driven by different tax rates applied to individual components of the total gain from property sales. These two components are the capital gain resulting from the sale of property at a price higher than its cost and the gain due to the recapture of depreciation taken during the use of the property. Our measure of value is the REIT's net asset liquidation value (NALV). The metric of REIT value currently used by analysts is a REIT's net asset value (NAV), but a REIT's NAV will always be greater than the NALV and therefore overestimate market value, all else equal. Finally, using observed market prices for REITs, we provide evidence that NALVs give superior estimates of REIT market prices than do NAVs.