VEREIT’s Portfolio Diversification Making Positive Strides

Glenn Rufrano, CEO of VEREIT, Inc. (NYSE: VER), participated in a video interview at Nareit’s REITweek: 2018 Investor Conference in New York.

Rufrano said VEREIT’s portfolio diversification is moving in a positive direction after standards were set for it more than two years ago. While there is still work to do, he said, protecting the downside of the company is key.

“The cash flow is stable, the growth is stable, [and] we don’t want anything to disrupt that,” Rufrano said. In order for VEREIT to remain diversified, he said the company has two criteria it adheres to: keeping tenants at no more than five percent and office properties within 15 to 20 percent.

Rufrano agreed that a simple, straightforward approach to retail is the best method. It’s a philosophy he’s adopted over his career, beginning with his roots in the mall business in the 1980s, and then when he worked for a shopping center company in the 2000s.

“Today we’ve got simple boxes on corners. Retail has changed,” he said, noting that forms of distribution and credit profiles in particular have evolved.

Rufrano said it’s a very binary decision when VEREIT looks at buying a tenant or not. “We don’t buy a shopping center where there are 20 tenants where we’ve got to worry about credit,” he said. “Simple is better; less capital is better.”

Meanwhile, VEREIT isn’t concerned about overbuilding or supply outstripping demand in its markets. “We don’t see it yet, but could it happen—yes,” Rufrano said.

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