Type of Submission
Refereed Article
Abstract
This paper examines how the systematic risk of large commercial real estate owners is associated with geographic diversification. It analyzed time-varying equity betas and geographic exposure of publicly traded pure-play lodging REITs. Contrary to popular expectation, results of this study showed that stock investors perceive smaller risk in geographic focus rather than diversification. Further, regional focus becomes insignificant in reducing the risk if the focus expands beyond two or three regions. The findings were robust to multiple measures of geographic diversification. As such, the study reaffirmed the impact of geographic focus in the context of commercial real estate as a risk minimization strategy.
DOI
https://doi.org/10.7275/rg0q-s812
Recommended Citation
Frutig, Brigitte Silvia and Das, Prashant
(2020)
"Does Geographic Focus Reduce Systematic Risk in Hotel REITs?,"
Journal of Hospitality Financial Management: Vol. 28:
Iss.
1, Article 2.
DOI: https://doi.org/10.7275/rg0q-s812
Available at:
https://scholarworks.umass.edu/jhfm/vol28/iss1/2
Included in
Corporate Finance Commons, Finance and Financial Management Commons, Food and Beverage Management Commons, Gaming and Casino Operations Management Commons, Real Estate Commons, Tourism and Travel Commons