07/10/2014 | By Sarah Borchersen-Keto
Griffin Capital is a privately held investment and management company that sponsors real estate investment platforms.
Shields discussed how the public, non-listed REIT (PNLR) segment has evolved and what has helped to broaden the investment appeal of PNLRs. Overall, the level of transparency for PNLRs has increased “dramatically” in the last six years, Shields observed.
Shields is a board member of the Investment Program Association (IPA), a trade association for non-listed direct investments. “We have gone to great lengths to increase the level of transparency in the space,” he said. Measures taken by the association include the release of best practices related to modified funds from operations, and best practice related to net asset value.
Such measures have “all certainly helped in the appeal of this product,” Shields said. An increased focus on the fee component of PNLRs has also been positive for the industry, he added.
Shields also provided an overview of Griffin Capital’s various investment products and discussed potential buying opportunities. Griffin Capital is the sponsor of Griffin American Healthcare REIT II. The company has also introduced Griffin American Healthcare REIT III, which is targeting medical office buildings, hospitals, skilled nursing facilities, senior housing facilities and other health care-related assets.
Griffin Capital Essential Asset REIT, meanwhile, is the company’s non-traded net lease platform. Shields noted that leases for Griffin Capital Essential Asset REIT tend to be more stable “because we’re buying long-term, single-tenant assets to which the tenant has made a meaningful economic commitment.”
Meanwhile, the company is also considering assets in the hospitality segment, Shields said.
“If you have an expectation of increasing interest rates or an increasing inflationary environment, it’s not a bad idea to think about shortening the lease duration, and hospitality is a good product example of that,” he said.