RT Journal Article
SR Electronic
T1 Micro Cap Assets versus Macro Cap Assets: <em>The Effect of Asset Size on Financial Performance in Real Estate</em>
JF The Journal of Private Equity
FD Institutional Investor Journals
SP 19
OP 30
DO 10.3905/jpe.2018.22.1.019
VO 22
IS 1
A1 Oscar Vasco
A1 Stephanie Feit
A1 Jesus Bandres
A1 Emily Francis
A1 Nicolas Falkinoff Gips
A1 Diyi “Claire” Chen
YR 2018
UL https://pm-research.com/content/22/1/19.abstract
AB This study explored the investment thesis that micro assets outperform macro assets. Micro assets include office and industrial real estate assets acquired at a price between $1 – $10 million. An asset acquired at a cost higher than $10 million is a macro asset. The study used a data sample of 1,025 office and industrial real estate asset transactions collected from the databases CompStak and Co-Star. Data were collected from 1993 to 2016, representing approximately 38 cities across different market tiers. The results obtained from the analysis, with a 90% confidence level, showed that micro assets yielded an 8.76% higher IRR than macro assets. Similarly, the study found, with a 99% confidence level, that the change in the value of micro assets is 15.97% higher than macro assets.TOPICS: Private equity, real estate, statistical methods, performance measurement