The Journal of Real Estate Finance and Economics

, Volume 47, Issue 3, pp 434–465 | Cite as

Manipulation in U.S. REIT Investment Performance Evaluation: Empirical Evidence

  • Jamie Alcock
  • John Glascock
  • Eva Steiner


We investigate whether Real Estate Investment Trust (REIT) managers actively manipulate performance measures in spite of the strict regulation under the REIT regime. We provide empirical evidence that is consistent with this hypothesis. Specifically, manipulation strategies may rely on the opportunistic use of leverage. However, manipulation does not appear to be uniform across REIT sectors and seems to become more common as the level of competition in the underlying property sector increases. We employ a set of commonly used traditional performance measures and a recently developed manipulation-proof measure (MPPM, Goetzmann et al., Rev Finan Stud 20(5):1503–1546, 2007) to evaluate the performance of 147 REITs from seven different property sectors over the period 1991–2009. Our findings suggest that the existing REIT regulation may fail to mitigate a substantial agency conflict and that investors can benefit from evaluating return information carefully in order to avoid potentially manipulative funds.


Real estate Performance evaluation Manipulation 


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Copyright information

© Springer Science+Business Media, LLC 2012

Authors and Affiliations

  1. 1.Department of Land EconomyThe University of CambridgeCambridgeUK
  2. 2.School of Mathematics and PhysicsThe University of QueenslandSt LuciaAustralia
  3. 3.University of Connecticut, School of BusinessStorrsUSA

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