Abstract

Little, if any, research has been published on development-oriented real estate investment trusts (REITs), as a category. This thesis examines the viability of the REIT format for the real estate development process. Capital is the life-blood of any development concern, and, as such, particular attention is paid to the processes pertaining to the access of funds, the subsequent allocation of funds, and the underlying logic governing these decisions. This paper reviews industry articles, past studies on the effects of development on REIT performance, and interviews with key personnel of the REITs and private development firms profiled in this thesis. I conclude that the REIT format is an effective vehicle for real estate development although skilled management is vital to exploiting its inherent potential. Development-oriented REITs are distinguished from their conservative REIT brethren by their objectives. REITs that shun development add value for shareholders through the active management of property holdings, whereas REIT-developers adopt strategies that are focused on creating and adding value through real estate development. Additionally, some of the strategies adopted by development-