12/4/2018 | By Nareit Staff
Steve Buller, portfolio manager at Fidelity Investments, participated in a video interview at Nareit’s REITworld: 2018 Annual Conference in San Francisco.
Buller, who has spent two decades as a portfolio manager with Fidelity, said that during the past 20 years the fund has returned more than 10 percent annually, which is a “very good” historical return and “even a better return” relative to the equities market.
Asked about the biggest impact on REITs in the modern era, Buller pointed to the global financial crisis, which led to a curtailment of REIT business model and balance sheet risk. However, more recently there has been an uptick in development risk, and more balance sheet risk also seems likely, Buller said. “Many REITs have de-levered to the point where it’s almost harmful to equity holders.”
Meanwhile, Buller noted that many non-U.S. REITs are not maintaining the same corporate governance standards as their U.S. peers. Furthermore, some of these companies are not making good capital allocation decisions. “Given that they often trade at a perpetual discount to their net asset value (NAV), that’s even more frustrating,” he said.