Real Estate Consultant Says REITs Making Progress on Diversity

Merrie Frankel, founder and president of advisory firm Minerva Realty Consultants, LLC, participated in a video interview at Nareit's REITwise: 2018 Law, Accounting & Finance Conference in Hollywood, Florida.

Minerva provides independent consulting services to assist companies pursuing credit ratings and capital structure analysis for REITs contemplating accessing the public markets or ratings. Frankel was previously a REIT analyst with Moody’s Investors Service.

Frankel described the initial public offering (IPO) market as a “great resource for a company looking for permanent capital to fuel growth.” She also noted that the ratings process for REITs hasn’t changed all that much over the years—“basically tweaks and fine-tuning” from the major credit ratings agencies.

Turning to diversity matters, Frankel noted that only 17 percent of Fortune 500 companies have women on the boards: “That statistic has been pretty static for a number of years.” She also noted that among Fortune 500 companies, only 250 to 400 board seats turn over every year. “That’s not a lot of seats to fill, so that explains why it takes a while to get diversity on the boards,” Frankel said.

Frankel also pointed to a recent Well Fargo study that found that REITs with 25 percent or more women on their boards performed better that REITs with a lower percentage: “That shows it really can hit the bottom line.”

Meanwhile, a report by Ferguson Partners Ltd., an executive search firm specializing in real estate, showed that about 80 percent of REITs studied had one woman on the board versus 97 percent for Fortune 500 companies.

“REITs are doing okay, but have a little bit of a way to go,” Frankel said.