REIT CEOs participating in a REITworld 2017 panel stressed the importance of emergency preparedness and communication in the wake of natural disasters.
Thomas Baltimore, Jr., chairman, president and CEO of Park Hotels & Resorts (NYSE: PK) and Nareit 2018 Chair, moderated the session. Ric Campo, chairman and CEO of multifamily REIT Camden Property Trust (NYSE: CPT), noted that “it’s all about making sure you’re prepared for dealing with any situation.” Hap Stein, chairman and CEO of retail REIT Regency Centers Corp. (NYSE: REG), added that communication with investors, employees and tenants is “critically important” in a disaster, while Joe Margolis, CEO of self-storage Extra Space Storage Inc. (NYSE: EXR), emphasized the need for good insurance.
Although demand for rental housing rose in Houston following Hurricane Harvey, Camden froze rents at pre-Harvey levels, Campo said. The company also removed premiums from short-term leases and waived certain fees.
Margolis said Extra Space also saw demand rise in Houston and in Florida. The self-storage REIT also saw a “very large” increase in demand in Puerto Rico, almost all of which came from individuals leaving the island, he noted. Margolis added that he expects it could be many months before Puerto Rico is back on line.
Turning to broader corporate governance issues, Campo said that while the REIT industry overall has made gains, improvements still need to be made in terms of increasing diversity. In Camden’s case, the company has taken an “aggressive” approach to make the board’s composition better reflect the make-up of the employee base. As a result, half of the members of Camden’s board or directors are female, Campo said.
Regarding the business outlook, Campo said completions in the multifamily sector appear to be peaking and starting to fall. In response, Camden will do some development projects and take advantage of a “decent acquisitions market,” he added.
As for the self-storage sector, Margolis emphasized that it remains highly fragmented. It continues to offer opportunities for Extra Space to deploy capital, according to Margolis.
Stein, meanwhile, pointed out that valuations for the types of shopping centers that Regency develops are “very strong.”