%T The rise of mergers and acquisitions in real estate: An event study regarding the value creation effect of twenty-first-century real estate investment trust takeovers in the United States
%D 2023
%L theses_frw4400
%A Anke Gouma
%X In recent years, real estate investment has flourished because of low interest rates and public income searching for yield. 2021 signalled a boom in real estate merger and acquisition (M&A) activity, with real estate investment trusts (REITs) as the main contributors. In contrast, 2022 represented a turning point: inflation surged, interest rates rose, and economic growth slowed. This study examines the value creation effect of mergers involving U.S. REITs on real estate returns over the period 2010-2022 with special attention to the role played in the acquisition. By means of event study methodology, I obtain the cumulative abnormal returns, which reflect the market reaction to real estate deal announcements. The main findings of this study entail that real estate mergers are positively associated with REIT returns, and this relationship is more pronounced for target REITs. The findings of this study have potential implications for the legislation concerning REITs.