REIT Returns: New Urbanism vs. Traditional Developments
Open Access
- Author:
- Gerhardt, Christopher Mark
- Area of Honors:
- Finance
- Degree:
- Bachelor of Science
- Document Type:
- Thesis
- Thesis Supervisors:
- David Shapiro, Thesis Supervisor
Dr. Brian Spangler Davis, Thesis Honors Advisor - Keywords:
- Finance
Real Estate
New Urbanism
Real Estate Investment Trusts
Stock Returns - Abstract:
- This paper looks at changes during the past five years in stock prices of a sample of Real Estate Investment Trusts (REITs) traded on American exchanges after the acquisition of two different kinds of residential properties is publicly announced. The stock returns associated with two styles of design, New Urbanism developments and traditionally built developments, are calculated to better understand the implications such information can have on investors and REIT executives, among others. This paper tests the hypothesis that real estate developments that incorporate New Urbanism principles yield larger Real Estate Investment Trust (REIT) stock returns than developments that feature traditional building principles. A further understanding of REITs, New Urbanism, and traditional design principles is covered, followed by a literature review of previously conducted studies on REITs and the value and cost of New Urbanism. Among the figures calculated and tests run to gauge and understand the difference in returns are percent change tests, standard deviations, confidence intervals, and two independent sample T-Tests. Finally, an interpretation of the study’s findings is made, as well as recommendations about how to continue and improve upon the study’s conclusions.