Nelson Mills, president and CEO of Columbia Property Trust (NYSE: CXP), joined REIT.com for a CEO Spotlight video interview at REITWorld 2013: NAREIT’s Annual Convention for All Things REIT at the San Francisco Marriott Marquis.
Columbia Property Trust has been a fully public company since 2004. It listed on the New York Stock Exchange in October. Mills gave an update on the company’s progress since listing.
“So far, so good,” he said. “We’re very pleased with the results.”
Mills discussed the timing of the listing.
“To provide liquidity for our shareholders, create access to capital, lower our cost of capital and other reasons, we thought now was the time,” he said. “We’ve been working hard for a couple years to prepare for this event. I think we’ve been very well received. Trading activity has been a bit light to date, as we expected, but it’s beginning to build momentum. Pricing is holding up very well.”
Mills was asked about Columbia Property Trust’s efforts to reposition its portfolio.
“The REIT was originally designed primarily around a yield and dividend focus,” he said. “It accomplished that objective for many years for primarily retail individual investors. In preparing for the future, to sustain current income levels and growth, we thought it was important to do a few things. We were in 33 markets at one time—very widely diversified. We thought it was important to narrow that focus, and so we’ve taken steps in the last couple years to sell assets, re-deploy capital. We’ve reduced from 33 markets down to 16 with plans to go down to around a dozen in the next year or so. We’re focusing on primary markets and exiting many secondary markets. We’re shifting more of our focus from predominately suburban to predominately (central business districts) going forward.”
Mills offered his opinion on the dominant trends that he expects to see in the office sector in 2014.
“It continues to be challenging,” he said. “We feel like we’re past the bottom in most markets, and we’re starting to see some significant progress in terms of the fundamentals. Some of our key cities are very strong today, such as San Francisco, Denver, Seattle, Houston. There are others like (Washington, D.C.) that continue to have some challenges that are a bit softer.”