Activist Investors
One new factor leading to more REIT purchases is the rise of activist investors such as Jonathan Litt, co-founder of Land & Buildings Investment Management. Agitating by Litt, who had criticized Associated Estates Realty Corp.’s share performance and urged it to find a buyer, was a likely catalyst for the landlord’s August sale to a unit of Brookfield Asset Management Inc.
The large discounts priced into REIT shares don’t mean management should automatically succumb to suitors, said Litt, who targets firms with issues such as poor management that can be fixed. But if the disconnect persists, there will be more deals, he said.
“The public markets are weak on concern about interest rates, and this will likely correct itself,” Litt said. If not, “good companies will go private.”