REIT Institutional Ownership Dynamics and the Financial Crisis

  • Erik Devos
  • Seow-Eng Ong
  • Andrew C. Spieler
  • Desmond TsangEmail author


Collectively, institutional investors hold large ownership stakes in REITs. The traditional view is that institutions are both long-term and passive investors. The financial crisis beginning in 2007 provides an opportunity to analyze the investment choices of institutional investors before, during, and after the crisis. Our results indicate that institutional ownership increased prior to the financial crisis, declined significantly during the period of market stress, but rebounded after. These results hold for four institutional investor subtypes: mutual funds/investment advisors, bank trusts, insurance companies, and other institutions, with mutual funds/investment advisors and bank trusts most clearly exhibiting this pattern. We also find evidence that institutions actively manage their REIT portfolios, displaying a “flight to quality” after the market downturn by reducing beta and individual risk exposure, and by increasing ownership in larger REITs.


REITs Institutional ownership Financial crisis 

JEL classification

G32 G34 



We thank the editor and an anonymous reviewer for their comments. We also like to thank Qing Bai, Eva Steiner and seminar participants at the Real Estate Markets in Transition Conference at Hofstra University (2010), the Financial Management Association Meetings (2011), and the American Real Estate & Urban Economic Association Meetings (2012). Spieler and Tsang acknowledge financial support from Hofstra University and McGill University, respectively.


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Copyright information

© Springer Science+Business Media, LLC 2012

Authors and Affiliations

  • Erik Devos
    • 1
  • Seow-Eng Ong
    • 2
  • Andrew C. Spieler
    • 3
  • Desmond Tsang
    • 4
    Email author
  1. 1.College of Business AdministrationUniversity of Texas – El PasoEl PasoUSA
  2. 2.Department of Real EstateNational University of SingaporeSingaporeSingapore
  3. 3.Frank G. Zarb School of BusinessHofstra UniversityHempsteadUSA
  4. 4.Desautels Faculty of ManagementMcGill UniversityMontrealCanada

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