Abstract
Executive Summary. This paper examines the short-and long-run equity returns for REITs that do not announceopen market repurchases when a rival real estateinvestment trust (REIT) announces a repurchase. Priorresearch finds evidence of significant positive returns tothe announcing REITs, on average, but does not examinethe effect of the announcement on rival REITs. We findevidence of a significant negative reaction for nonannouncingrival REITs over the event window. The returnsare directly related to the previous four week returnfor non-announcing REITs and inversely related to thefirm's market-to-book ratio and volatility of returns. Boththe announcing firms and their non-announcing rivalssignificantly outperform the broader equity market on arisk-adjusted basis in the two years following the repurchaseannouncement.
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