Attributes such as sound corporate governance or a sturdy balance sheet should be among the areas of emphasis for small and medium-sized REITs trying to attract attention from larger institutional investors, according to Phil Owens, a managing director in Green Street’s Advisory Group.
In a Nov. 1 webinar, Owens said smaller and medium-sized REITs often express frustration that they are unable to attract capital from larger investors, inhibiting their ability to execute on their growth strategies.
While the majority of investor interest does focus on larger REITs, not all small companies are being ignored, according to Owens. He pointed out that REITs with market capitalizations between $200 million and $300 million are showing up on institutional ownership lists.
Owens said small and medium-sized REITs should focus on areas such as:
- Balance sheet risk;
- Franchise value and capital allocation;
- Corporate governance; and
- General and administrative (G&A) costs.
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