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Advice From A REIT Researcher
November 14, 2013
Green Street's Mike Kirby says the past 20 years have been a "big lab experiment" for the REIT space (no rubber gloves necessary), with evidence to show what has and hasn't worked for CEOs. Excessive leverage was a very painful lesson learned during the downturn, as was overbuilding. By the time trouble hit, all the value created during good times was wiped away. Unless development is in a REIT's DNA, or they have an excellent track record in the area, "don't do it" (put that shovel down and step away). In short: The simpler the better. He knows that might sound boring, but REITs can deliver better total returns if they don't try to "do fancy stuff." (Think Rachael Ray REITs.)
