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103 Real Estate Ownership by Non-Real Estate Firms: The Impact on Firm Returns

Yongheng Deng and Joseph Gyourko
For many years operating companies around the world generally have owned their real estate assets. In the United States alone it is estimated that corporate users own nearly $2 trillion, or roughly half of all commercial property. Companies own not only their production facilities, but frequently their offices, warehouses, and retail outlets. Although many of these properties are suitable for a broad range of users, these operating companies choose to commit their scarce capital to the ownership and operation of real estate, rather than re-deploying this capital to their core operating businesses.