REIT Industry Likely to See More Consolidation, Real Estate Advisor Says

Mary Hogan Preusse, founder and principal of consulting, investment and advisory services firm Sturgis Partners LLC, participated in a video interview at Nareit’s REITweek: 2018 Investor Conference in New York.

Hogan Preusse sits on the boards of four public REITs. She noted that some of the most common issues facing boards today surround succession and making the boardroom look “more like America.” Other key issues include executive compensation.

In terms of the current level of REIT valuations, Hogan Preusse noted that REITs perform the worst at times of interest rate uncertainty. “Once people feel they know where interest rates are going…investors adjust their total return expectations and feel more confident jumping into the group,” she said.

Meanwhile, Hogan Preusse described the recent pace of mergers and acquisition (M&A) activity as “remarkable.” She attributed the trend to the deep discounts for public real estate, in combination with the high level of funds available to private investors.

“I do think we’re going to see a lot more consolidation in the industry,” Hogan Preusse said.