The long-horizon performance of REIT mergers

Robert D. Campbell, Erasmo Giambona, C. F. Sirmans

Research output: Contribution to journalArticlepeer-review

12 Scopus citations


We study long-horizon shareholder returns in a comprehensive sample of Real Estate Investment Trust (REIT) mergers, to test whether or not the anomaly of post-merger underperformance observed in conventional firms applies to the case of REITs. Constructing synthetic benchmark portfolios controlling for firm size and for book-to-market value ratio, we find that 60-month buy-and-hold abnormal returns for REIT acquirers are significantly negative at approximately -10%, supporting the position that REIT merger acquirers underperform non-merging REITs in the long run. We find no evidence to challenge previous studies reporting positive announcement period returns for acquirers when the target is privately held, but we do find evidence that these positive returns do not persist. The long term performance of acquiring REITs is approximately the same whether the target is public or private.

Original languageEnglish (US)
Pages (from-to)105-114
Number of pages10
JournalJournal of Real Estate Finance and Economics
Issue number2
StatePublished - Feb 2009
Externally publishedYes


  • BHARs
  • Buy-and-hold abnormal returns
  • EREITs
  • Mergers
  • Post-merger performance
  • REITs
  • Real Estate Investment Trusts

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics
  • Urban Studies


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