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On the efficiency of the UPREIT organizational form: Implications for the subprime crisis and CDO's

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On the efficiency of the UPREIT organizational form: Implications for the subprime crisis and CDO's. / Ebrahim, M.S.; Mathur, I.
In: Journal of Economic Behavior and Organization, Vol. 85, 01.01.2013, p. 286-305.

Research output: Contribution to journal › Article › peer-review

HarvardHarvard

Ebrahim, MS & Mathur, I 2013, 'On the efficiency of the UPREIT organizational form: Implications for the subprime crisis and CDO's', Journal of Economic Behavior and Organization, vol. 85, pp. 286-305. https://doi.org/10.1016/j.jebo.2012.02.015

APA

Ebrahim, M. S., & Mathur, I. (2013). On the efficiency of the UPREIT organizational form: Implications for the subprime crisis and CDO's. Journal of Economic Behavior and Organization, 85, 286-305. https://doi.org/10.1016/j.jebo.2012.02.015

CBE

Ebrahim MS, Mathur I. 2013. On the efficiency of the UPREIT organizational form: Implications for the subprime crisis and CDO's. Journal of Economic Behavior and Organization. 85:286-305. https://doi.org/10.1016/j.jebo.2012.02.015

MLA

Ebrahim, M.S. and I. Mathur. "On the efficiency of the UPREIT organizational form: Implications for the subprime crisis and CDO's". Journal of Economic Behavior and Organization. 2013, 85. 286-305. https://doi.org/10.1016/j.jebo.2012.02.015

VancouverVancouver

Ebrahim MS, Mathur I. On the efficiency of the UPREIT organizational form: Implications for the subprime crisis and CDO's. Journal of Economic Behavior and Organization. 2013 Jan 1;85:286-305. doi: 10.1016/j.jebo.2012.02.015

Author

Ebrahim, M.S. ; Mathur, I. / On the efficiency of the UPREIT organizational form: Implications for the subprime crisis and CDO's. In: Journal of Economic Behavior and Organization. 2013 ; Vol. 85. pp. 286-305.

RIS

TY - JOUR

T1 - On the efficiency of the UPREIT organizational form: Implications for the subprime crisis and CDO's

AU - Ebrahim, M.S.

AU - Mathur, I.

PY - 2013/1/1

Y1 - 2013/1/1

N2 - This paper studies optimal real estate organizational forms as a means of enhancing real estate values in the ongoing subprime crisis. We model the organizational response to stakeholder conflicts and regulatory changes to show how they evolve to an optimal form and undertake an optimal capital structure to enhance the welfare of investors. Using the examples of the REIT and RELP organizational forms, we show how the rivalry between taxable and institutional investors shapes the UPREIT form. We employ a two-period partial equilibrium model to demonstrate that UPREITs adapt to regulatory changes by (i) meticulously acquiring a hybrid form that contains the desirable features of both REITs and RELPs, and (ii) efficiently trading off debt claims between their constituent investor bases. This adaptation enhances welfare by mitigating administrative costs, agency costs, bankruptcy costs, illiquidity costs and taxes.

AB - This paper studies optimal real estate organizational forms as a means of enhancing real estate values in the ongoing subprime crisis. We model the organizational response to stakeholder conflicts and regulatory changes to show how they evolve to an optimal form and undertake an optimal capital structure to enhance the welfare of investors. Using the examples of the REIT and RELP organizational forms, we show how the rivalry between taxable and institutional investors shapes the UPREIT form. We employ a two-period partial equilibrium model to demonstrate that UPREITs adapt to regulatory changes by (i) meticulously acquiring a hybrid form that contains the desirable features of both REITs and RELPs, and (ii) efficiently trading off debt claims between their constituent investor bases. This adaptation enhances welfare by mitigating administrative costs, agency costs, bankruptcy costs, illiquidity costs and taxes.

U2 - 10.1016/j.jebo.2012.02.015

DO - 10.1016/j.jebo.2012.02.015

M3 - Article

VL - 85

SP - 286

EP - 305

JO - Journal of Economic Behavior and Organization

JF - Journal of Economic Behavior and Organization

SN - 0167-2681

ER -