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Papers by Scott Gibson

Excerpt] During January of 2004, we attended the American Lodging Investment Summit (ALIS), a lar... more Excerpt] During January of 2004, we attended the American Lodging Investment Summit (ALIS), a large hotel industry investment conference held each year in Los Angeles. We sat through several sessions about financing hotel companies and properties at the conference. During literally every one of these sessions, fairly lengthy, and sometimes active, discussions erupted about the effective use of fixed-rate versus floating-rate debt for financing hotel investments. Our take away from the experience—floating-rate debt makes sense as a general proposition because hotels, unlike other commercial real estate, have pro-cyclical income streams unbridled by lease frictions that should resemble the time-series patterns of interest rates. However, we, like the panelists and other participants involved in these sessions, had views grounded in considerable ignorance because empirical work has never been done to confirm or refute the validity of financing strategies based on mixing fixed-rate and ...

Nontraded REITs are an attractive buy-and-hold investment for income-oriented investors. Sold thr... more Nontraded REITs are an attractive buy-and-hold investment for income-oriented investors. Sold through broker-dealers, shares in these real estate investment trusts do not trade on public exchanges, promise relatively high returns, and contain specific triggers for liquidating the trust. In the first such study of nontraded REITs, an examination of the comparative effects of a long holding period and a short holding period shows that investors who purchase hospitality REITs early in the cycle see a diminished return as a result of subsequent sales. In effect, the early investors subsidize the commissions paid to the dealers who sell to late-term investors. This effect is an unintended consequence of the fact that the REITs’ share prices are fixed, regardless of the value of the underlying assets. The REITs’ high dividend structure somewhat mitigates the effect, but those high dividends mean that some REITs’ payout exceeded the amount cash they took in (as measured by funds from opera...

The Journal of Real Estate Finance and Economics, 2021

Using a large, non-student sample, we assess and differentiate between borrowers’ Risk Aversion a... more Using a large, non-student sample, we assess and differentiate between borrowers’ Risk Aversion and Ambiguity Aversion levels and their willingness to pay to resolve a mortgage default settlement negotiation. Ambiguity Aversion is found to be negatively associated with willingness to pay for borrowers with high financial literacy in both the gain and loss domains, whereas personality traits matter more for borrowers with low financial literacy. This finding is important to policymakers in that they should adopt differential resolution strategies for defaulting borrowers based on these intervening variables.

SSRN Electronic Journal, 2017

Journal of Property Investment & Finance, 2008

PurposeThe purpose of this paper is to demonstrate how fixed‐share prices, as a structural flaw i... more PurposeThe purpose of this paper is to demonstrate how fixed‐share prices, as a structural flaw in private equity funds targeted to small‐unit investors, economically disadvantages those investors in favor of sponsors.Design/methodology/approachThe theoretical model incorporates fixed share prices with continuous investment opportunity and evaluates the wealth transfer from long‐term investors to marketing affiliates and soliciting dealers in the form of fees paid on the sale of shares to follow‐on investors.FindingsThis result holds in the presence of high‐payout dividend policy that attempts to compensate for wealth transfer.Research limitations/implicationsShould share prices be marked‐to‐market using real estate appraisals or another method, the unlisted REIT and related offerings, such as tenant‐in‐common funds, will be profitable for sponsors without economically disadvantaging long‐term investors.Practical implicationsThe findings from this research are useful to fund sponsor...

Journal of Financial Intermediation, 2010

This Article or Chapter is brought to you for free and open access by the School of Hotel Adminis... more This Article or Chapter is brought to you for free and open access by the School of Hotel Administration Collection at The Scholarly Commons. It has

A time-series simulation that compares hotel-industry revenue per available room (RevPAR) with Lo... more A time-series simulation that compares hotel-industry revenue per available room (RevPAR) with London Interbank Offer Rate (LIBOR) indicates that hotel investors would fare more favorably with floating-rate loans than with the commonly used fixed-rate financing. Using data from 1987 through 2004, the study determined that LIBOR and RevPAR changes are strongly correlated, indicating a relationship of RevPAR and floating interest rates. Moreover, a simulation found that hotels using variable-rate mortgages would have been more likely to cover debt service in good times and bad than would hotels financed with fixed-rate loans. The correlation was strongest for midscale, limited-service properties but also operated for budget and resort deals. The relationship of RevPAR with floating rates suggests a reduction in the costs to borrowers and lenders arising from distressed loans.

SSRN Electronic Journal, 2000

ChemInform, 2001

ABSTRACT ChemInform is a weekly Abstracting Service, delivering concise information at a glance t... more ABSTRACT ChemInform is a weekly Abstracting Service, delivering concise information at a glance that was extracted from about 100 leading journals. To access a ChemInform Abstract of an article which was published elsewhere, please select a “Full Text” option. The original article is trackable via the “References” option.

SSRN Electronic Journal, 2000

We examined the effectiveness of systemic administration of 5-ami- nolevulinic acid (S-ALA) to in... more We examined the effectiveness of systemic administration of 5-ami- nolevulinic acid (S-ALA) to induce endogenous protoporphyrin as a reg imen for use in photodynamic therapy (PDT) of transplanted R3230AC rat mammary adenocarcinomas in vivo. Levels of porphyrins synthesized in various tissues after systemic administration of S-ALA differed, with their accumulation in tumor tissue being dependent on both the dose and

The Cornell Hotel and Restaurant Administration Quarterly, 2003

SSRN Electronic Journal, 2000

Page 1. For Better or Worse? Mutual Funds in Side-by-Side Management Relationships with Hedge Fun... more Page 1. For Better or Worse? Mutual Funds in Side-by-Side Management Relationships with Hedge Funds Gjergji Cici, a Scott Gibson,a, * and Rabih Moussawi b a Mason School of Business, The College of William & Mary, Williamsburg ...

SSRN Electronic Journal, 2000

SSRN Electronic Journal, 2000

ABSTRACT We analyze the dispersion of month-end prices simultaneously placed on identical corpora... more ABSTRACT We analyze the dispersion of month-end prices simultaneously placed on identical corporate bonds by different US mutual fund managers before and after initiations of TRACE and introductions of issuers into Markit’s CDS database. Disseminated bonds show large and statistically significant decreases in mark dispersion around three key TRACE system rollout events, including important spillover effects for non-disseminated bonds. Dispersion for large, investment grade bonds fell 20% to 83% after the start of TRACE reporting. A difference-in-differences regression analysis of the two-stage rollout of BBB-rated bonds provides clearer evidence suggesting that TRACE led to a decrease in mark dispersion for all bonds via a matrix pricing channel in addition to any direct dissemination impact. TRACE-associated improvement in bond valuation precision provides indirect support for Bessembinder, Maxwell, and Venkataraman’s (2006) information-based channel relating transparency and pricing. During the pre-TRACE period, we also find some evidence that mark dispersion fell for investment grade issuers after introductions into Markit’s database.

SSRN Electronic Journal, 2000

ABSTRACT We show that put warrants can reduce financing costs when managers know more about the f... more ABSTRACT We show that put warrants can reduce financing costs when managers know more about the firm's future prospects than do outside investors. Put warrants are shown to be an efficient security in eliminating adverse selection costs in that firms can credibly reveal favorable private information without having to resort to "money burning" or inefficient investment decisions. Among the model's implications are that (i) put warrants are effective whether or not they are attached directly to equity shares, (ii) the number of puts issued must exceed the number of new shares issued, and (iii) a ceiling exists on the amount of project financing that a firm can successfully raise. Additionally our analysis provides practical insights into how the size and exercise price of the put warrant offering affect issues such as corporate control and the probability of default.

SSRN Electronic Journal, 2000

The Journal of Portfolio Management, 2003

Excerpt] During January of 2004, we attended the American Lodging Investment Summit (ALIS), a lar... more Excerpt] During January of 2004, we attended the American Lodging Investment Summit (ALIS), a large hotel industry investment conference held each year in Los Angeles. We sat through several sessions about financing hotel companies and properties at the conference. During literally every one of these sessions, fairly lengthy, and sometimes active, discussions erupted about the effective use of fixed-rate versus floating-rate debt for financing hotel investments. Our take away from the experience—floating-rate debt makes sense as a general proposition because hotels, unlike other commercial real estate, have pro-cyclical income streams unbridled by lease frictions that should resemble the time-series patterns of interest rates. However, we, like the panelists and other participants involved in these sessions, had views grounded in considerable ignorance because empirical work has never been done to confirm or refute the validity of financing strategies based on mixing fixed-rate and ...

Nontraded REITs are an attractive buy-and-hold investment for income-oriented investors. Sold thr... more Nontraded REITs are an attractive buy-and-hold investment for income-oriented investors. Sold through broker-dealers, shares in these real estate investment trusts do not trade on public exchanges, promise relatively high returns, and contain specific triggers for liquidating the trust. In the first such study of nontraded REITs, an examination of the comparative effects of a long holding period and a short holding period shows that investors who purchase hospitality REITs early in the cycle see a diminished return as a result of subsequent sales. In effect, the early investors subsidize the commissions paid to the dealers who sell to late-term investors. This effect is an unintended consequence of the fact that the REITs’ share prices are fixed, regardless of the value of the underlying assets. The REITs’ high dividend structure somewhat mitigates the effect, but those high dividends mean that some REITs’ payout exceeded the amount cash they took in (as measured by funds from opera...

The Journal of Real Estate Finance and Economics, 2021

Using a large, non-student sample, we assess and differentiate between borrowers’ Risk Aversion a... more Using a large, non-student sample, we assess and differentiate between borrowers’ Risk Aversion and Ambiguity Aversion levels and their willingness to pay to resolve a mortgage default settlement negotiation. Ambiguity Aversion is found to be negatively associated with willingness to pay for borrowers with high financial literacy in both the gain and loss domains, whereas personality traits matter more for borrowers with low financial literacy. This finding is important to policymakers in that they should adopt differential resolution strategies for defaulting borrowers based on these intervening variables.

SSRN Electronic Journal, 2017

Journal of Property Investment & Finance, 2008

PurposeThe purpose of this paper is to demonstrate how fixed‐share prices, as a structural flaw i... more PurposeThe purpose of this paper is to demonstrate how fixed‐share prices, as a structural flaw in private equity funds targeted to small‐unit investors, economically disadvantages those investors in favor of sponsors.Design/methodology/approachThe theoretical model incorporates fixed share prices with continuous investment opportunity and evaluates the wealth transfer from long‐term investors to marketing affiliates and soliciting dealers in the form of fees paid on the sale of shares to follow‐on investors.FindingsThis result holds in the presence of high‐payout dividend policy that attempts to compensate for wealth transfer.Research limitations/implicationsShould share prices be marked‐to‐market using real estate appraisals or another method, the unlisted REIT and related offerings, such as tenant‐in‐common funds, will be profitable for sponsors without economically disadvantaging long‐term investors.Practical implicationsThe findings from this research are useful to fund sponsor...

Journal of Financial Intermediation, 2010

This Article or Chapter is brought to you for free and open access by the School of Hotel Adminis... more This Article or Chapter is brought to you for free and open access by the School of Hotel Administration Collection at The Scholarly Commons. It has

A time-series simulation that compares hotel-industry revenue per available room (RevPAR) with Lo... more A time-series simulation that compares hotel-industry revenue per available room (RevPAR) with London Interbank Offer Rate (LIBOR) indicates that hotel investors would fare more favorably with floating-rate loans than with the commonly used fixed-rate financing. Using data from 1987 through 2004, the study determined that LIBOR and RevPAR changes are strongly correlated, indicating a relationship of RevPAR and floating interest rates. Moreover, a simulation found that hotels using variable-rate mortgages would have been more likely to cover debt service in good times and bad than would hotels financed with fixed-rate loans. The correlation was strongest for midscale, limited-service properties but also operated for budget and resort deals. The relationship of RevPAR with floating rates suggests a reduction in the costs to borrowers and lenders arising from distressed loans.

SSRN Electronic Journal, 2000

ChemInform, 2001

ABSTRACT ChemInform is a weekly Abstracting Service, delivering concise information at a glance t... more ABSTRACT ChemInform is a weekly Abstracting Service, delivering concise information at a glance that was extracted from about 100 leading journals. To access a ChemInform Abstract of an article which was published elsewhere, please select a “Full Text” option. The original article is trackable via the “References” option.

SSRN Electronic Journal, 2000

We examined the effectiveness of systemic administration of 5-ami- nolevulinic acid (S-ALA) to in... more We examined the effectiveness of systemic administration of 5-ami- nolevulinic acid (S-ALA) to induce endogenous protoporphyrin as a reg imen for use in photodynamic therapy (PDT) of transplanted R3230AC rat mammary adenocarcinomas in vivo. Levels of porphyrins synthesized in various tissues after systemic administration of S-ALA differed, with their accumulation in tumor tissue being dependent on both the dose and

The Cornell Hotel and Restaurant Administration Quarterly, 2003

SSRN Electronic Journal, 2000

Page 1. For Better or Worse? Mutual Funds in Side-by-Side Management Relationships with Hedge Fun... more Page 1. For Better or Worse? Mutual Funds in Side-by-Side Management Relationships with Hedge Funds Gjergji Cici, a Scott Gibson,a, * and Rabih Moussawi b a Mason School of Business, The College of William & Mary, Williamsburg ...

SSRN Electronic Journal, 2000

SSRN Electronic Journal, 2000

ABSTRACT We analyze the dispersion of month-end prices simultaneously placed on identical corpora... more ABSTRACT We analyze the dispersion of month-end prices simultaneously placed on identical corporate bonds by different US mutual fund managers before and after initiations of TRACE and introductions of issuers into Markit’s CDS database. Disseminated bonds show large and statistically significant decreases in mark dispersion around three key TRACE system rollout events, including important spillover effects for non-disseminated bonds. Dispersion for large, investment grade bonds fell 20% to 83% after the start of TRACE reporting. A difference-in-differences regression analysis of the two-stage rollout of BBB-rated bonds provides clearer evidence suggesting that TRACE led to a decrease in mark dispersion for all bonds via a matrix pricing channel in addition to any direct dissemination impact. TRACE-associated improvement in bond valuation precision provides indirect support for Bessembinder, Maxwell, and Venkataraman’s (2006) information-based channel relating transparency and pricing. During the pre-TRACE period, we also find some evidence that mark dispersion fell for investment grade issuers after introductions into Markit’s database.

SSRN Electronic Journal, 2000

ABSTRACT We show that put warrants can reduce financing costs when managers know more about the f... more ABSTRACT We show that put warrants can reduce financing costs when managers know more about the firm's future prospects than do outside investors. Put warrants are shown to be an efficient security in eliminating adverse selection costs in that firms can credibly reveal favorable private information without having to resort to "money burning" or inefficient investment decisions. Among the model's implications are that (i) put warrants are effective whether or not they are attached directly to equity shares, (ii) the number of puts issued must exceed the number of new shares issued, and (iii) a ceiling exists on the amount of project financing that a firm can successfully raise. Additionally our analysis provides practical insights into how the size and exercise price of the put warrant offering affect issues such as corporate control and the probability of default.

SSRN Electronic Journal, 2000

The Journal of Portfolio Management, 2003