scholarly journals Information Asymmetry, Lease Incentives, and the Role of Advisors in the Market for Commercial Real Estate

2017 ◽  
Author(s):  
Martijn Drres ◽  
Boris Ziermans ◽  
Philip Koppels
Keyword(s):  
Real Estate ◽  
Information Asymmetry ◽  
Commercial Real Estate

Intermediation in Private Equity: The Role of Placement Agents

2019 ◽  
Vol 55 (4) ◽  
pp. 1095-1116
Author(s):  
Matthew D. Cain ◽  
Stephen B. McKeon ◽  
Steven Davidoff Solomon
Keyword(s):  
Real Estate ◽  
Information Asymmetry ◽  
Private Equity ◽  
Abnormal Returns ◽  
Theoretical Predictions ◽  
Illiquid Investments ◽  
First Time ◽  
High Information

Intermediation in private equity involves illiquid investments, professional investors, and high information asymmetry. We use this unique setting to empirically evaluate theoretical predictions regarding intermediation. Using placement agents has become nearly ubiquitous, but agents are associated with significantly lower abnormal returns in venture and real estate funds, consistent with investor capture and influence peddling. However, returns are higher for buyout funds employing a top-tier agent and for first-time real estate and venture funds employing an agent, and are less volatile for agent-affiliated funds, consistent with a certification role. Our results suggest heterogeneous motives for intermediation in the private equity industry.

scholarly journals The Increasing Trend in Commercial Real Estate Lending by Community Banks: The Role of Deliberate Risk-Taking, 2001-2017

2021 ◽  
Vol 2 (1) ◽  
pp. p21
Author(s):  
J. Reid Cummings ◽  
John E. Martinez ◽  
Michael T. Mills
Keyword(s):  
Financial Crisis ◽  
Real Estate ◽  
Risk Taking ◽  
Banking Sector ◽  
Commercial Real Estate ◽  
Community Banks ◽  
The Great Recession ◽  
Banking Institutions ◽  
Potential Risks

Much attention focuses on the role of real estate lending by banks as a precipitating factor in past financial crises, and especially with respect to the 2007-2008 crisis. Over the past five years, U.S. banks have increased their commercial real estate lending dramatically, raising concern among regulators about the potential for another financial crisis. In this paper, we analyze post-recessionary trends to determine whether the same dangerous pre-recessionary risk-taking trends are emerging. Regulators devote most of their attention to the banking sector with little regard to the role played by its various subgroups. This may explain why there is little research analyzing the specific role of community banks in sparking a financial crisis. In this study, we present a disaggregated analysis that focuses on the potential risks of increased commercial real estate lending from a comparative perspective, examining community banks vis-a-vis larger banking institutions, paying particular attention to the role of deliberate bank risk-taking as a causal factor in increased community bank commercial real estate CRE lending since the Great Recession.

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