Quality in the Selection of REITs
Author(s)
Hughes, Bill
Kedrowski, Sean
Jivraj, Farouk
Type
Working Paper
Abstract
In this paper, we investigate quality-based characteristics that can improve the risk-return profile of REIT investing. Specifically, we study portfolios of REITs formed based on four characteristics: profitability, leverage, valuation and yield. We find that a portfolio that removes low quality REITs has historically outperformed the broad REIT benchmark.
We highlight an approach of using these four characteristics to build a broad, statistically robust REIT portfolio, with each characteristic being additive to the REIT selection process. Importantly, the approach is based on fundamental real estate investment principles.
We highlight an approach of using these four characteristics to build a broad, statistically robust REIT portfolio, with each characteristic being additive to the REIT selection process. Importantly, the approach is based on fundamental real estate investment principles.
Date Issued
2019-03-06
Citation
2019
Publisher
SSRN
Copyright Statement
The copyright holder has granted SSRN a license. All rights reserved. No reuse allowed without permission.