Jonathan Litt, founder and chief investment officer at Land and Buildings, joined REIT.com for a video interview at REITWise 2017: NAREIT’s Law, Accounting & Finance Conference in La Quinta, California.
Litt described the approach Land and Buildings takes to boost shareholder value at companies where it invests. Typically, Land and Buildings invests in companies it believes are trading at a material discount to the underlying value of the assets, Litt said. Land and Buildings then focuses on aspects of a company it believes can be fixed, such as capital allocation, margins, operating strategy and culture, he said.
Litt also countered the view that activist investors are only concerned with short-term results.
“As we’ve engaged with companies over the years, there are easy, short-term ways to make money which are not the best outcome for all shareholders. We’ve stuck with companies and pursued the best strategy that maximizes value over the long term. If it means staying in a stock three, four years, we will do that,” he said.
Meanwhile, Litt pointed out that overall REIT governance has “improved quite appreciably.” He praised the industry’s ability to attract capital and generate attractive returns during the past three decades, and said he expects that will remain the case going forward.