Refining the Analysis of Regional Diversification for Income-Producing Real Estate

The few studies that have looked at regional diversification of real estate portfolios have segmented the United States into four regions without regard to the underlying economic activity in those four regions. In this study, results are presented which analyze the regional diversification issue by...

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Bibliographic Details
Published in:The Journal of real estate research 1987-12, Vol.2 (2), p.85-95
Main Authors: Hartzell, David J., Shulman, David G., Wurtzebach, Charles H.
Format: Article
Language:English
Subjects:
Correlation coefficients
Correlations
Economic regions
Financial portfolios
Industrial agriculture
Investment portfolios
Minerals
Portfolio diversification
Real estate
Real estate economics
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Summary:The few studies that have looked at regional diversification of real estate portfolios have segmented the United States into four regions without regard to the underlying economic activity in those four regions. In this study, results are presented which analyze the regional diversification issue by segmenting the country into eight regions based on similar underlying economic fundamentals. The results differ from previous studies in showing that eight-region diversification provides benefits that cannot be achieved from four-region diversification, hence indicating that location does play an important role in real estate portfolio management.
ISSN:0896-5803
2691-1175
DOI:10.1080/10835547.1987.12090537