A recent Securities and Exchange Commission (SEC) ruling allowing public companies to announce corporate news through social media channels has left REITs both wary of the pitfalls and open to evaluating new opportunities that the ruling may bring.
A growing number of public companies already utilize social media to communicate with their shareholders and investors. The SEC’s April 2 announcement provided for publicly traded companies to be able to alert investors to important “material” information through social media.
Embracing social media, especially as a means of public information disbursement, has proven to be a relatively cautious process in the commercial real estate industry. Those REITs that currently utilize social media do so for informal announcements and building their brands. They typically rely on standard news releases and websites for the more formal corporate announcements.
With this new ruling, however, some REITs are beginning to re-evaluate social media’s role as a formal communication tool.
Most REITs that currently use social media are like EdR, (NYSE: EDR) a student housing REIT. EdR currently has social media platforms dedicated to its residential communities. The firm also uses them to communicate with employees across the country.
“We have used them to build excitement about various internal meetings, to announce new programs or development projects, appearances at conferences as well as to alert co-workers regarding new hires or exciting personal news,” said Susan Jennings, vice president of corporate communication and marketing with EdR.
In addition to the three major social media channels of Facebook, Twitter and LinkedIn, Mack-Cali Realty Corporation(NYSE: CLI) also employs Foursquare and YouTube. The company’s current efforts, like most REITs, are primarily focused on brand management. Ilene Jablonski, vice president of marketing for the office and multi-family REIT, said social media has been an important part of the company’s marketing strategy for the past two years.
“We use a number of tools to extend our leadership position online, increase brand awareness, encourage real-time engagement with constituents and develop strong relationships with decision makers in the commercial real estate community,” she said.
Following the new SEC ruling, companies such as Mack-Cali and EdR are currently looking into how it might use social media to augment external business announcements and reach out to existing and potential shareholders. It’s a common theme among members of the REIT industry
Kimco Realty Corp. (NYSE: KIM) began utilizing social media, including blogs, in late 2011.
“In terms of the SEC announcement and disclosures, we will still evaluate how we’re going to use social media as a forum to push out new financial reporting information,” said David Bujnicki, Kimco vice president of investor relations and corporate communications. “We have leveraged social media to let the public know about recently announced earrings.”
Joseph M. Tichar, senior vice president of corporate operations and chief of staff with DDR Corp. (NYSE: DDR), said social media should be used as a complementary distribution channel to other sources.
“We will continue to provide followers with meaningful and educational content as it relates to our industry. The ruling will not change our practice, and we will not rely solely on social media platforms to announce company news,” he said.
Experts warn that public companies will have to be careful in order to comply with the ruling so that one group of investors doesn’t have an information advantage over another.
“You want to make sure you are not putting out any financial information that’s not public to a part of your audience,” Bujnicki said.
Ultimately, Chris Dubrowski, partner with accounting firm Deloitte & Touche LLP, said he will remain focused on companies’ SEC filings, regardless of what’s announced via social media.
“Although there may be certain kinds of communications that can be made to investors and others through social media, the filings required by the SEC must be made directly with that agency,” he noted.