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Volume 31, Number 3, 2009

Ownership Structure, Property Performance, Multifamily Properties and REITs

William G. Hardin III
Department of Finance and Real Estate
Florida International University
11200 SW 8th Street, MARC 231
Miami, FL 33199

Matthew D. Hill
Department of Finance
University of Mississippi
P.O. Box 1848
University, MS 38677


James J. Hopper
Mississippi State University
Mississippi State, MS 39762


This research extends literature that empirically evaluates the impact of ownership and management structure on property level performance. The results show that multifamily properties owned and managed by real estate investment trusts (REITs) generate higher effective rents at the property level than non-REIT-owned properties. After controlling for positive operating scale and brand effects, REIT property level performance is better than non-REIT property level performance in the market studied. The REIT structure represents diversified scale operators with property management skills. The results imply that the structure of property ownership can impact property performance.

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