Comparative Analysis: Influence of Interest Rates on Returns of Real Estate Private Equity Index and Real Estate Public Equity Index
In this paper, we studied the influence of interest rates on a US-based real estate private equity index as well US Wilshire public equity REIT Index. The interest rates that are chosen as independent variables include Monthly LIBOR, Yearly LIBOR and the Federal Cost of Funds Index. The dependent va...
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| Format: | Article |
| Language: | English |
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Sciendo
2022-12-01
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| Series: | Real Estate Management and Valuation |
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| Online Access: | https://doi.org/10.2478/remav-2022-0026 |
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| author | Sharma Manu |
| author_facet | Sharma Manu |
| author_sort | Sharma Manu |
| collection | DOAJ |
| description | In this paper, we studied the influence of interest rates on a US-based real estate private equity index as well US Wilshire public equity REIT Index. The interest rates that are chosen as independent variables include Monthly LIBOR, Yearly LIBOR and the Federal Cost of Funds Index. The dependent variables include US-based real estate private equity index that includes quarterly returns of 1,035 real estate funds, including liquidated funds formed between 1986 and 2018. The other dependent variable is the US Wilshire REIT Index. The variance of returns of interest rates considerably influences the variance of returns of the US PERE Index, whereas variance of returns of interest rates doesn’t influence the variance of returns of the US Wilshire REIT Index. Also, the real estate index is positively correlated to interest rates and so rising interest rates influence the returns of US PERE Index in a positive manner. The study shows that private equity real estate investors should expect higher return as the cost of funds increase. |
| first_indexed | 2024-04-10T21:29:24Z |
| format | Article |
| id | doaj.art-4ee33434bfa94f40b914d93dae1e2d4c |
| institution | Directory Open Access Journal |
| issn | 2300-5289 |
| language | English |
| last_indexed | 2024-04-10T21:29:24Z |
| publishDate | 2022-12-01 |
| publisher | Sciendo |
| record_format | Article |
| series | Real Estate Management and Valuation |
| spelling | doaj.art-4ee33434bfa94f40b914d93dae1e2d4c2023-01-19T13:51:14ZengSciendoReal Estate Management and Valuation2300-52892022-12-01304172410.2478/remav-2022-0026Comparative Analysis: Influence of Interest Rates on Returns of Real Estate Private Equity Index and Real Estate Public Equity IndexSharma Manu0University Institute of Applied Management Sciences Panjab University, IndiaIn this paper, we studied the influence of interest rates on a US-based real estate private equity index as well US Wilshire public equity REIT Index. The interest rates that are chosen as independent variables include Monthly LIBOR, Yearly LIBOR and the Federal Cost of Funds Index. The dependent variables include US-based real estate private equity index that includes quarterly returns of 1,035 real estate funds, including liquidated funds formed between 1986 and 2018. The other dependent variable is the US Wilshire REIT Index. The variance of returns of interest rates considerably influences the variance of returns of the US PERE Index, whereas variance of returns of interest rates doesn’t influence the variance of returns of the US Wilshire REIT Index. Also, the real estate index is positively correlated to interest rates and so rising interest rates influence the returns of US PERE Index in a positive manner. The study shows that private equity real estate investors should expect higher return as the cost of funds increase.https://doi.org/10.2478/remav-2022-0026real estateprivate equityinterest ratesreitr10r30 |
| spellingShingle | Sharma Manu Comparative Analysis: Influence of Interest Rates on Returns of Real Estate Private Equity Index and Real Estate Public Equity Index Real Estate Management and Valuation real estate private equity interest rates reit r10 r30 |
| title | Comparative Analysis: Influence of Interest Rates on Returns of Real Estate Private Equity Index and Real Estate Public Equity Index |
| title_full | Comparative Analysis: Influence of Interest Rates on Returns of Real Estate Private Equity Index and Real Estate Public Equity Index |
| title_fullStr | Comparative Analysis: Influence of Interest Rates on Returns of Real Estate Private Equity Index and Real Estate Public Equity Index |
| title_full_unstemmed | Comparative Analysis: Influence of Interest Rates on Returns of Real Estate Private Equity Index and Real Estate Public Equity Index |
| title_short | Comparative Analysis: Influence of Interest Rates on Returns of Real Estate Private Equity Index and Real Estate Public Equity Index |
| title_sort | comparative analysis influence of interest rates on returns of real estate private equity index and real estate public equity index |
| topic | real estate private equity interest rates reit r10 r30 |
| url | https://doi.org/10.2478/remav-2022-0026 |
| work_keys_str_mv | AT sharmamanu comparativeanalysisinfluenceofinterestratesonreturnsofrealestateprivateequityindexandrealestatepublicequityindex |