Purpose: Using real estate investment trusts as a unique laboratory, we investigate the impact of the Black Economic Empowerment policy on seasoned equity offering (SEO) price dynamics.

Methodology: 52 SEOs issued by 29 REIT firms (based on availability of data) from January 1, 2010, to December 31, 2020 were retrieved from the Stock Exchange News Service (SENs) of the Johannesburg Stock Exchange (JSE).

Findings: Using OLS regression in analysing our data, evidence indicates that BEE is positively related to SEO underpricing; in other words, SEOs of BEE compliant REITs are less underpriced compared to non-compliant BEE REITs.

Implication: Evidence also suggests that the BEE policy needs to be recalibrated owing to its politicization as this will enhance compliance from REITs.

Originality: This is a pioneer attempt at providing insights for subsequent studies of this nature.