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Mori Masaki

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EHL Hospitality Business School
Route de Berne 301, 1000 Lausanne 25, Switzerland, CH

MSc HES-SO in Global Hospitality Business - EHL Hospitality Business School

Valuation of Hotel Investments

BSc HES-SO in Hôtellerie et professions de l'accueil - EHL Hospitality Business School

Real Estate Finance

2022

The revival of business groups’ risk sharing :

Wissenschaftlicher Artikel ArODES

evidence from Japanese real estate investment trust market

Masaki Mori, Seow Eng Ong, Joseph T. L. Ooi

The journal of real estate finance and economics, To be published

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Zusammenfassung:

We examine the business groups’ risk-sharing hypothesis in the Japanese Real Estate Investment Trust (REIT) market in which the unique external management system seems to be reinforcing power relationships among firms affiliated with the modern Japanese business groups, called keiretsu. We find that REITs whose sponsors belong to one of the keiretsu groups (keiretsu REITs) have significantly lower volatility of profitability than REITs whose sponsors do not belong to the keiretsu groups (non-keiretsu REITs). There is no significant difference in profitability between keiretsu REITs and non-keiretsu REITs, controlling for firm and property characteristics. The abnormal portion of the profitability unexplained by firm characteristics is also significantly lower with keiretsu REITs. We also find that the keiretsu affiliation reduces the systematic volatility of affiliated REITs, while such an effect is not observed with the idiosyncratic volatility, suggesting that the risk-sharing effect may be beneficial for the value of REITs. Using the difference-in-differences design with propensity score matching, we find that the negative impact of the Great East Japan Earthquake on the profitability was significantly smaller with keiretsu REITs than with non-keiretsu REITs. Keiretsu REITs were also able to stabilize their capital structure by shifting some short-term debts to long-term debts without increasing the cost of loans under the uncertain situation caused by the Earthquake. Keiretsu REITs were able to borrow money from their affiliated group banks even right after the earthquake, while non-keiretsu REITs seem to have struggled to secure loans from those banks.

2021

Conspicuous Consumption and Household Indebtedness

Wissenschaftlicher Artikel

Mori Masaki, Kwanok Lee

Real Estate Economics, 2021 , vol. 49, no S2, pp. 557-586

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Zusammenfassung:

Using a novel, large dataset of consumer transactions in Singapore, we study how conspicuous consumption affects household indebtedness. The coexistence of private housing (condominiums) and subsidized public housing (HDB) allows us to identify conspicuous consumers. Conditional on income and other socioeconomic characteristics, those who choose to reside in condominiums – considered a status good in Singapore – are likely to be more conspicuous than their counterparts living in HDB units. We find that condominium residents spend considerably more (by 25%) on conspicuous goods but not differently on inconspicuous goods. Compared with their matched HDB counterparts, these consumers with higher conspicuous motivation carry 7% more credit card debt and 108% more delinquent credit card debt. Our results suggest that status-seeking-induced conspicuous consumption is an important determinant of household indebtedness.

2020

The wealth effects of REIT property acquisitions and dispositions: the creditors’ perspective

Wissenschaftlicher Artikel

Mori Masaki, Q. Li, D. Ling, S.E. Ong

Journal of Real Estate Finance and Economics, 2020 , vol. 60, pp. 308-337

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Zusammenfassung:

Prior studies of REIT property transaction activity focus on shareholder wealth effects. This study examines the effects of property acquisitions, dispositions, and overall trading activity on unsecured bond spreads, credit rating changes, and rating outlooks using a sample of the listed equity REITs in the U.S. We find that active property trading in general decreases creditors’ wealth, but this negative impact is significantly mitigated for REITs with positive NAV premiums and when REITs use sale proceeds to pay down debt after the transactions. We also find that property transactions followed by an increased geographic focus significantly increase bond yield spreads and decrease the probability of credit rating upgrades.

2019

Rationale behind IPO underpricing: evidence from Asian REIT IPOs

Wissenschaftlicher Artikel

Mori Masaki, J.T.L. Ooi, W.C. Wong

Real Estate Economics, 2019 , vol. 47, no 1, pp. 104-137

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Zusammenfassung:

This article examines the rationale behind IPO underpricing using a sample of REIT IPOs in Asia. Although the IPOs registered an average initial return of 3.08%, the issuers were able to sell the IPO shares above their fundamental values by timing the listings in periods when existing REIT stocks are traded at a premium to their net asset values (NAV). An IPO could therefore be underpriced and yet produce a net gain for the issuer. The issuers’ net gain from IPO is, however, negatively related to long?run performance of REIT IPOs.

2017

Sponsor ownership in Asian REITs

Wissenschaftlicher Artikel

Mori Masaki, C.K. Tang

Journal of Real Estate Finance and Economics, 2017 , vol. 55, no 3, pp. 265-287

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Zusammenfassung:

This study examines the relationship between sponsor ownership and firm performance proxied by firm value, operating cash flow, and dividend policy with Asian real estate investment trusts (REITs) in Japan, Hong Kong, Malaysia, and Singapore for the period from 2002 to 2012, focusing on both the incentive alignment effect and the entrenchment effect. Our study sheds new light on effective corporate governance for Asian REITs that are prone to agency problems. Such agency problems arise from the inequitable distribution of power to sponsors that results from the external management structure. The findings suggest that larger sponsor ownership aligns the interests of sponsors and minority shareholders and enhances the performance of Asian REITs, while such an effect diminishes as sponsors become more entrenched. We find that the incentive alignment effect and entrenchment effect are primarily driven by developer-sponsored REITs. Also evident is that the presence of institutional investors mitigates agency problems and increases firm performance.

2016

Debt Raising and Refinancing by Japanese REITs: Information Content in a Credit Crunch

Wissenschaftlicher Artikel

Mori Masaki, C.K. Tang, S.E. Ong, J.T.L. Ooi

Journal of Real Estate Finance and Economics, 2016 , vol. 53, no 2, pp. 141-161

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Zusammenfassung:

This paper examines the information content of debt raising and refinancing activities of Real Estate Investment Trusts (REITs) in normal and tight credit markets. Based on a sample of 340 debt announcements made by REITs in Japan (J-REITs) between 2002 and 2011, we observe that they are associated with a positive stock price reaction, averaging 1.05 % over a 4-day window. Stratifying the sample into debt raising and debt refinancing, we find strong evidence that the positive economic gains associated with debt announcements flowed from the pool of debt refinancing announcements. They registered a significant mean return of 1.20 % over the 4-day window, as opposed to 0.07 % for the pool of debt raising activities. Further investigation shows that the positive market reaction to debt refinancing is more pronounced during the credit crunch of 2007 to 2009. Although debt refinancing does not lead to any change in the firm’s capital structure, it still contains valuable information about the firm’s prospect, especially in tight credit markets.

Do Conspicuous Consumers Pay Higher Housing Premiums? Spatial and Temporal Variation in the United States.

Wissenschaftlicher Artikel

Mori Masaki, Kwanok Lee

Real Estate Economics, 2016 , vol. 44, no 3, pp. 726-763

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Zusammenfassung:

This study is the first to examine the relationship between conspicuous demand and housing price dynamics. We hypothesize that conspicuous consumers would want high?end homes to signal their wealth and this housing consumption behavior would induce greater deviations from fundamental house prices. We test this by using a unique dataset that matches the consumers’ appetite for nonhousing luxury goods from Google Insights for Search to housing premiums that they pay for high?end houses in U.S. Metropolitan Statistical Areas (MSAs) during 2004–2011. The estimation results demonstrate that controlling for a wide range of MSA demographic and economic characteristics, conspicuous demand has a significant, positive relationship with housing premiums. This relationship varies spatially and temporally. Conspicuous demand has a stronger relationship with a price increase in high?end homes in MSAs with a steady, higher housing premium than in MSAs with a volatile, lower premium during the boom period. In MSAs with a steady, higher housing premium, the relationship remains significant even during the bust period, potentially contributing to maintaining higher housing premiums.

2015

Information Diffusion in the US Real Estate Investment Trust Market. Journal of Real Estate Finance and Economics

Wissenschaftlicher Artikel

Mori Masaki

Journal of Real Estate Finance and Economics, 2015 , vol. 51, no 2, pp. 190-214

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Zusammenfassung:

This study examines the information diffusion process in the U.S. Real Estate Investment Trust (REIT) market with a focus on the impacts of changing market environments, information supply, and information demand on the lead-lag effect. The results suggest that a significant lead-lag relationship exists between the lagged returns of big REITs and the current returns of small REITs. This relationship has slightly decreased along with policy and environment changes that occurred in the U.S. REIT market during the study period from 1986 to 2012, while still remaining significant in the most recent REIT market. The process of information diffusion is becoming unstable in recent years and the reverse lead-lag effect from small REITs to big REITs is observed especially when REIT market liquidity and return volatility are high. The lead-lag effect among REITs is driven largely by slow adjustment to negative information, which is magnified by a lack of information supply, especially as demand for such information increases. Finally, information flow from REITs with more media coverage to those with less media coverage becomes even more sluggish than the information flow from big REITs to small REITs.

2014

Do Investor Demand and Market Timing Affect Convertible Debt Issuance Decisions by REITs?

Wissenschaftlicher Artikel

Mori Masaki, J.T.L. Ooi, W.C. Wong

Journal of Real Estate Finance and Economics, 2014 , vol. 49, no 4, pp. 524-550

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Zusammenfassung:

The unique regulatory environment of REITs casts doubt on the traditional theoretical process by which REIT managers base their convertible debt issuance decisions on issuer condition and prospects. Anecdotal evidence shows that REITs may have catered to demand by investors, including a demand by convertible bond arbitrageurs when issuing convertible debt. This study examines the rationale behind convertible debt issuances by REITs, focusing on the possible impacts of investor demand and market timing. The results suggest that investor demand significantly affects convertible debt issuance decisions by REITs while certain unknown factors appear to have contributed to the sudden increase of convertible debt offerings in 2006 and 2007. REITs also time the market to conditions in the public debt market. The results only partially support the offered risk-shifting, risk-uncertainty, backdoor-equity, and sequential-financing hypotheses.

2011

Performance of pairs trading strategy in the U.S. REIT market

Wissenschaftlicher Artikel

Mori Masaki, A.J. Ziobrowski

Real Estate Economics, 2011 , vol. 39, no 3, pp. 409-428

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Zusammenfassung:

We examine the performance of pairs trading in the U.S. REIT market compared with that in the U.S. general stock market over the period 1987 to 2008. The results suggest that the REIT market provided superior profit opportunities for this strategy over common stocks after accounting for the effect of the bid?ask bounce between 1993 and 2000. This was likely because of the unique characteristics of REITs, which permitted the selection of good pairs of close substitutes and the structural changes that occurred in 1993 in the REIT market. The superior trading profits in REITs disappear after 2000.

2010

Psychological and Cultural Factors in the Choice of Mortgage Products: A Behavioral Investigation.

Wissenschaftlicher Artikel

Mori Masaki, J. Diaz, A.J. Ziobrowski, N.B. Rottke

Journal of Behavioral Finance, 2010 , vol. 11, no 2, pp. 82-91

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Zusammenfassung:

Using data from three countries that differ economically, culturally, and geographically, this study examines the role of Prospect Theory's reflection effect, a psychological factor, in combination with Uncertainty Avoidance (UA), a cultural factor, on the choice of mortgage products. Experiments were conducted using business professionals in the United States, Germany, and Japan. The results suggest that risk-averse people tend to become more risk seeking, leaning more toward adjustable-rate mortgages (ARMs) when choosing a mortgage type, and that this psychological effect may underlie the mortgage choices of people who tend to choose ARMs, even across countries with different cultures.

2009

Why do borrowers choose ARMs over FRMs?: A behavioral investigation

Wissenschaftlicher Artikel

Mori Masaki, J. Diaz, A.J. Zibrowski

International Real Estate Review, 2009 , vol. 12, no 2, pp. 98-120

Zusammenfassung:

A considerable number of U.S. borrowers still choose adjustable rate mortgages (ARMs) over fixed rate mortgages (FRMs) even when interest rates are historically very low. This study examines the psychological reasons for the popularity of ARMs by testing the Prospect theory’s reflection hypothesis. Experiments are conducted using business professionals. The results suggest that psychological factors may explain why ARM borrowers tend to ignore the associated risk factors, focusing heavily upon pricing factors when choosing mortgage type. The results also indicate that borrowers may be viewing mortgage selection as part of a positive choice; namely, acquiring a home.

2006

Foreign real estate security investments for Japanese investors

Wissenschaftlicher Artikel

Mori Masaki, A.J. Ziobrowski

International Real Estate Review, 2006 , vol. 9, no 1, pp. 1-22

Zusammenfassung:

Foreign real estate investment funds have recently been added to the practical investment opportunity sets of ordinary Japanese investors. This paper analyzes the additional diversification benefits of U.S. REITs and Australian listed property trusts (LPTs) for Japanese investors who already hold Japanese, U.S. and Australian financial assets while considering different risk definitions in a mean-lower partial moment (MLPM) framework. The study uses data from August 1994 to July 2004. The impacts of currency adjustment and risk definition on the diversification benefits are examined. Our results suggest that the additional diversification benefits of U.S. REITs and Australian LPTs can be obtained only in very limited cases by Japanese investors.

2022

Chinese tourist demand to travel to Switzerland :

Konferenz ArODES

roles of media sentiments for the destination, competing destinations, and origin country

Masaki Mori, Yi Wu, Dongui Li

Proceedings of the Asian Real Estate Society (AsRES) Conference, 2022

Link zur Konferenz

Zusammenfassung:

This study examines the roles of media sentiments on Chinese tourists' demand to travel to Switzerland. We consider the effects of media sentiments for Switzerland (destination), competing destinations, and China (origin) by utilizing the innovative news database RavenPack. The initial results show that the media sentiment for Switzerland has a significant positive effect on Chinese tourists’ arrivals in Switzerland and that this positive effect remains strongly significant even after controlling for the media sentiment for the competing destinations in the eurozone, the price competitiveness, and the travel cost. The results also suggest that the Chinese travelers visit more than one country in the neighboring area when they visit Switzerland, and thus, the media sentiment for the overall area is also important for their travel decisions. Finally, the results suggest that the Chinese tourists become sensitive to the media sentiment for travel destinations only when they are influenced by the negative media sentiment in their home country. The results of this study will provide important implications for the Swiss tourism industry in making public relations strategies effectively by understanding when and how such strategies should be implemented.

2021

Sentiment indicators and market dynamics

Konferenz ArODES

Matthew Pollock, Masaki Mori

Proceedings of the 5th Hospitality Finance & Economics Conference

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