Inland Real Estate CEO Says Economic Fundamentals Support Strategy

Mitchell Sabshon, CEO of Inland Real Estate Investment Corp., joined REIT.com for a CEO Spotlight video interview during NAREIT’s 2015 Washington Leadership Forum.

Inland sponsors non-listed REITs and also offers privately placed real estate transactions. In 2014, the two businesses made combined acquisitions of almost $1.3 billion, according to Sabshon.

Inland focuses primarily on multi-tenant retail properties, especially shopping center-anchored assets, as well as apartment buildings.

“We’ve seen some improvement in pricing on apartments, and we think that opportunity is very exciting. We’re taking advantage of it,” Sabshon said.

Sabshon also said solid economic fundamentals across the board are supporting the company’s real estate strategy.

He noted that Inland is interested in acquiring real estate with “both a significant amount of anchor to it, which drives traffic, but even more so a substantial amount of small shop inline space where we have shorter leases and the opportunity to raise rents, capture growth and participate in the growth of the economy.” Barring any major external event, Sabshon said he sees this trend remaining in place for the next five to six years.

Sabshon also discussed new reporting changes for public, non-listed REITs, and why he supports them.

“A criticism of the non-listed REIT space for many years has been a lack of transparency, a lack of regular periodic valuation of non-listed REIT shares,” he noted. The purpose of the change is to make the pricing of those shares far more transparent by showing all relevant fees upfront, he said.

“By making that impact on capital transparent, those fees will come down over time. It’s a win-win for the investor and for Inland as a sponsor,” Sabshon observed. He explained that the current system of high fees means extra work for sponsors because they first have to bring the investment up to par before being able to add any additional value for investors.