PT  - JOURNAL ARTICLE
AU  - Oscar Vasco
AU  - Stephanie Feit
AU  - Jesus Bandres
AU  - Emily Francis
AU  - Nicolas Falkinoff Gips
AU  - Diyi “Claire” Chen
TI  - Micro Cap Assets versus Macro Cap Assets: <em>The Effect of Asset Size on Financial Performance in Real Estate</em>
AID  - 10.3905/jpe.2018.22.1.019
DP  - 2018 Nov 30
TA  - The Journal of Private Equity
PG  - 19--30
VI  - 22
IP  - 1
4099  - https://pm-research.com/content/22/1/19.short
4100  - https://pm-research.com/content/22/1/19.full
AB  - This study explored the investment thesis that micro assets outperform macro assets. Micro assets include office and industrial real estate assets acquired at a price between $1 – $10 million. An asset acquired at a cost higher than $10 million is a macro asset. The study used a data sample of 1,025 office and industrial real estate asset transactions collected from the databases CompStak and Co-Star. Data were collected from 1993 to 2016, representing approximately 38 cities across different market tiers. The results obtained from the analysis, with a 90% confidence level, showed that micro assets yielded an 8.76% higher IRR than macro assets. Similarly, the study found, with a 99% confidence level, that the change in the value of micro assets is 15.97% higher than macro assets.TOPICS: Private equity, real estate, statistical methods, performance measurement