Using a novel and detailed transaction-level data on commercial real estate assets, we construct real estate asset portfolios for a comprehensive set of public firms between 2000 and 2013. We find that a commercial real estate asset is sold at a significant discount when the real estate asset is not redeployable for alternative uses, when potential buyers in the geographical region are limited, and when the industry is concentrated. These effects are further exacerbated for distressed firms and cannot be fully reconciled by the quality of real estate assets. Bank loan spreads incorporate information on the expected commercial real estate discounts due to collateral channel. We identify plausible exogenous shocks to commercial real estate prices by using significant surges of foreign investor demand from countries with increased policy uncertainty. We find that, after a region experiences large foreign investor demand from these countries, the impact of collateral discount on loan spreads lessens.
JEL Classification: G32, G33, R33
Keywords: Bank Loan, Collateral discount, Real estate transactions, Foreign demand
학회소식
[2016년 제 4차] Real Estate Holdings of Public Firms and Collateral
작성자 : 관리자
조회수 : 828
게시일 :
2016-12-21
