The determinants of excess dividend payments above mandatory requirements in real estate investment trusts (REITs) are evaluated. Payment of excess dividends is related to factors associated with reduced agency costs, strong operating performance, the implementation of a stock repurchase plan and an ability to access short-term bank debt. Recognizing that access to external capital is essential for long-term growth, REITs manage dividend policy to allow for capital acquisition in the form of both equity and debt. The acquisition and use of short-term bank debt provides REIT management flexibility in determining dividend policy. Copyright 2008 American Real Estate and Urban Economics Association

REIT, Cash, Liquidity, Cash flow, Working capital, G12, G14, G24,

Real estate investment trust (REIT) dividend policies and dividend announcement effects during the 2008-2009 liquidity crisis are examined. Multinomial logit results indicate that REITs with higher market leverage or lower marketto-book ratios are more likely to cut dividends, suspend dividends or pay elective stock dividends. These results imply that mitigating going-concern risk is an important motive for REITs adjusting dividend policies during the crisis and support dividend catering theory where investor demand for dividends impacts corporate dividend policies. Moreover, REITs that cut or suspend dividends experience positive cumulative abnormal returns during the post-announcement period after controlling for the potential influence from simultaneous funds from operation announcements. The positive market response over the post-announcement period supports the notion that dividend decisions convey information to investors and is also consistent with the broad catering theory of dividend policy.Research on dividend policy and market reactions to dividend announcements has been conducted in a variety of market environments over the past half century (see, e.g., Lintner 1956, Brav et al. 2005. Little research, however, has focused on these issues in an environment such as the 2008-2009 liquidity crisis. Moreover, although researchers have embraced a wide set of hypotheses and theories including signaling, information asymmetry, agency costs, tax clienteles, firm life cycle and dividend catering to explain dividend behavior, these explanations remain open to debate. 1 During the 2008-2009 crisis, dysfunctional capital markets created an exogenous shock to firms dependent on external capital flows. The broad stock market * National Association of Real Estate Investment Trusts (NAREIT), Washington, DC 20006 or bcase@nareit.com.

This article examines the evolution of real estate investment trust (REIT) capital structure in the new REIT era with a focus on the effects of banking relationships on REIT capital structure. Using a unique sample of REITs from 1992 to 2003, we find that, after controlling for firm characteristics, REITs with banking relationships are more likely to obtain long-term debt ratings and subsequently issue public debt. Moreover, REITs with banking relationships tend to use less secured debt and have lower leverage. These findings support the notion that banking relationships facilitate REITs' access to the public debt markets and help explain why REITs shift from traditional mortgage financing to bank debt and public capital market financing. The results also support the proposition that firm leverage should be positively related to the amount of a firm's secured debt. Copyright (c) 2010 American Real Estate and Urban Economics Association.

The present research, which covers the latest residential boom and bust cycle, highlights that there are no uniform or constant time invariant wealth, housing, and income relations. Even more important, wealth composition is shown to be a significant determinant of consumption. The marginal effects of housing wealth, financial wealth, and income differ substantially with wealth composition. Households with the highest percentage of net worth in financial assets have much lower income effects, have substantially higher marginal effects associated with stock holdings, and have housing equity effects that differ noticeably from other households. Income effects for groups with the smallest amounts of relative financial wealth are dramatically higher than for households with greater financial wealth. Wealth and its composition affect consumption.