Information Asymmetry and Organizational Structure: Evidence from REITs

Information Asymmetry and Organizational Structure: Evidence from REITs We test for the differences in information asymmetry across two organizational forms (external and internal) in the REIT industry. We find significant differences with external REITs being significantly more transparent relative to internal REITs, and these differences are reflected in the loan contract terms and loan syndicate structure of loans made to these two types of REITs. We find that the relatively more transparent externally advised REITs are offered more favourable loan contracts in terms of lower loan rates and lower likelihood of collateral requirement. Further, loans to external REITs have syndicates that are larger in size and the lead lender retains a smaller portion of the loan, reflecting lower information asymmetry. The Journal of Real Estate Finance and Economics Springer Journals

Information Asymmetry and Organizational Structure: Evidence from REITs

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Springer US
Copyright © 2016 by Springer Science+Business Media New York
Economics; Regional/Spatial Science; Financial Services
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