TY - JOUR
T1 - What happens during flight to safety
T2 - Evidence from public and private real estate markets
AU - Boudry, Walter I.
AU - Connolly, Robert A.
AU - Steiner, Eva
N1 - Funding Information:
We gratefully acknowledge financial support for this project from the Real Estate Research Institute. We thank Andra Ghent, Michael Grupe, David Ling, Crocker Liu, Christos Makridis, Andrew McCulloch, Tim Riddiough, two anonymous referees, the Editor, and seminar participants at Southern Methodist University, University of Illinois‐Chicago, the Real Estate Research Institute Conference 2018 and the 2018 AREUEA National Conference for helpful comments.
Funding Information:
information Real Estate Research InstituteWe gratefully acknowledge financial support for this project from the Real Estate Research Institute. We thank Andra Ghent, Michael Grupe, David Ling, Crocker Liu, Christos Makridis, Andrew McCulloch, Tim Riddiough, two anonymous referees, the Editor, and seminar participants at Southern Methodist University, University of Illinois-Chicago, the Real Estate Research Institute Conference 2018 and the 2018 AREUEA National Conference for helpful comments.
Publisher Copyright:
© 2019 American Real Estate and Urban Economics Association
PY - 2022/3/1
Y1 - 2022/3/1
N2 - Little is known about the performance of public and private real estate investments during and after flight to safety (FTS). We document that public real estate securities offer a partial hedge during FTS events. In addition, periods with multiple FTS events forecast slower economic growth, resulting in weaker long-run investment performance of real estate assets. Following FTS, the probability of a drop in real estate cash flows increases by up to 20%, with quarterly cash flow growth rates declining by as much as 27%. Private market real estate price appreciation over the four quarters following FTS is nearly wiped out.
AB - Little is known about the performance of public and private real estate investments during and after flight to safety (FTS). We document that public real estate securities offer a partial hedge during FTS events. In addition, periods with multiple FTS events forecast slower economic growth, resulting in weaker long-run investment performance of real estate assets. Following FTS, the probability of a drop in real estate cash flows increases by up to 20%, with quarterly cash flow growth rates declining by as much as 27%. Private market real estate price appreciation over the four quarters following FTS is nearly wiped out.
UR - http://www.scopus.com/inward/record.url?scp=85075251729&partnerID=8YFLogxK
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U2 - 10.1111/1540-6229.12304
DO - 10.1111/1540-6229.12304
M3 - Article
AN - SCOPUS:85075251729
VL - 50
SP - 147
EP - 172
JO - Real Estate Economics
JF - Real Estate Economics
SN - 1080-8620
IS - 1
ER -
