The Journal of Real Estate Finance and Economics

, Volume 35, Issue 3, pp 333–356 | Cite as

Analyst Activity and Firm Value: Evidence from the REIT Sector



This paper is the first to examine (1) properties of analyst forecasts and (2) effects of analyst following on firm value for all REITs on CRSP, Compustat and I/B/E/S. Our results suggest that REITs operate in an information environment that has changed over time. We find that for periods when the REIT industry was either in the developmental stage (pre-1992), or after other structural changes in the industry (post-2000), more analysts cover REITs and forecasts are more accurate and less biased. Further, we find that mortgage REITs are more transparent than other REIT structures and exhibit properties of analyst behavior that are different from other types of REITs. Our investigation into the effect of analyst coverage on REIT value suggests that analyst coverage increases REIT value (as measured by Tobin’s q) and that the causality does not run the opposite way.


REIT Analyst forecasts 



We wish to thank Alex Butler, Rob Campbell, Jim Clayton, Esmeralda Lyn, Milena Petrova, Kelvin Wong and participants at the 2006 AsRES-AREUEA International conference, Vancouver, BC and the 2006 Hong Kong University–National University of Singapore Symposium on Real Estate Research. Spieler gratefully acknowledges a Summer Research Grant from the Frank G. Zarb School of Business. We thank Michael DeBello and Jason Paul for excellent research assistance. The authors gratefully acknowledge the contribution of Thomson Financial for providing earnings per share forecast data available through the Institutional Brokers Estimate System. This data has been provided as part of a broad academic program to encourage earnings expectations research.


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Copyright information

© Springer Science+Business Media, LLC 2007

Authors and Affiliations

  1. 1.Department of Economics and FinanceUniversity of Texas-El PasoEl PasoUSA
  2. 2.Department of Real EstateNational University of SingaporeSingaporeSingapore
  3. 3.Department of Finance, Frank G. Zarb School of BusinessHofstra UniversityHempsteadUSA

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