Panelists at Nareit’s 2020 REIT Investor Relations Symposium, held June 1, reflected on the first quarter earnings season and their expectations for REIT management teams going forward.
Nareit partnered with the New York Stock Exchange for the fourth year to host the annual event, held one day prior to Nareit’s REITweek: Virtual Investor Conference. Kimberly Callahan, senior vice president, investor relations at Camden Property Trust (NYSE: CPT), moderated the panel.
Richard Anderson, managing director at SMBC Nikko Securities America, Inc., described first quarter earnings as a “very welcome surprise” with respect to the way that management teams handled topics and maintained a consistency of communications. He gave the earnings season an A-plus grade. “I think we’re all a little bit smarter now to tackle this [uncertainty] on a go-forward basis.”
Sarah Wade, managing director and portfolio manager at Nuveen, said overall, companies did a good job of increasing transparency and disclosure during first quarter earnings in the areas of operations, capital, and investments.
Daniel Cooney, executive director and portfolio manager, global real estate securities at PGIM, noted that the effort made by some REITs to proactively reach out to PGIM was particularly helpful. “The fact that they made that effort gave us even more comfort in knowing that they felt that their business and portfolio were in a strong enough position to initiate the discussion,” he said.
Looking ahead, Anderson said the mode of communication between management teams and all constituents is likely going to change. He said he expects to see a greater emphasis on communications “because of where we’re all sitting right now—apart from one another. I would argue for more real-time interaction, not less.” Management teams will need to stay more proactive about staying “dialed-in” with both buy side and sell side analysts, he added.
Callahan agreed with the need for companies to provide more regular information and data in order to avoid the “lag time until the next earnings season rolls around in 90 days.”
Turning to valuations, Anderson said he does not foresee much change in valuations. Given a vaccine or treatment for COVID-19, “we’ll be back to some reasonable levels of normalcy,” he said.
Cooney, meanwhile, added that companies that are able to give guidance regarding 2021 earnings “will be rewarded in their valuations.”