In this study, we utilize a relatively new database to examine whether small foreign real estate firms have higher returns than large foreign real estate firms. We examine this issue from the perspective of a U.S. investor who forms portfolios of international real estate firms on the basis of U.S. dollar market value of equity. Using eleven years of foreign real estate data for more than 1200 observations in twenty countries, we find that large firms have higher returns and lower risk than small firms. These results hold when returns are denominated in either local currency or dollars. Further, the relationship between firm size and return is monotonic across portfolio groupings.

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Copyright © 1998 Journal of Real Estate Portfolio Management. This article first appeared in Journal of Real Estate Portfolio Management 4, no. 2 (1998): 107-112.

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