Mike Moran, managing director, and Audrey Symes, head of research at global organizational consulting firm Jackson Lucas, joined the REIT Report podcast to share insights into the intricacies of c-suite succession and hiring practices in the REIT sector.
Internal succession remains the dominant model for REITs, a trend supported by Jackson Lucas’ most recent data. Moran explained the reasons for this preference: internal candidates are already known to the board, they come with valuable institutional knowledge, and promoting from within can motivate existing employees.
However, the decision to promote internally often hinges on the company's performance prior to the transition, with boards more inclined to continue current strategy if a company is thriving.
Despite the strong trend towards internal hiring, “the interesting part is finding out where companies choose to break from that… these roles that are filled from outside really tell you what the company thinks it needs from the market to go forward,” Symes said.
As REIT boards and management teams consider their succession planning, a key takeaway is the need to focus on mid-level talent. Moran emphasized the importance of investing time and effort in nurturing talent at these levels, as they could be the future leaders of the organization.