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Activist Investor Land & Buildings Builds Stake In CBRE, 7 REITs

Land & Buildings remains heavily invested in residential real estate, despite exiting its stake in Tricon Residential.

Land & Buildings Investment Management, the activist investor led by Jonathan Litt, has boosted its holdings as it pushes to unlock value from publicly traded real estate firms it views as discounted.

Most notably, it bought more than 3 million shares of office real estate investment trust Equity Commonwealth, making it the fund's largest holding, as it pushes the office REIT's leadership to liquidate its remaining assets and return cash to investors. It owned a $60M stake in Equity Commonwealth at the end of the first quarter, according to an S&P Global analysis of Land & Buildings' regulatory filings.

The office REIT, which trades under the ticker symbol EQC, now owns just four buildings but has $2.2B in cash on hand. In a March letter, Litt wrote that EQC had consistently underperformed its REIT peers, and he expressed concern that the firm was running up exorbitant costs for executive compensation.

Litt's firm increased the value of its holdings in real estate companies from $435M at the end of last year to nearly $457M by the end of the first quarter.

The investments were across property types, from apartments to malls and casinos, including a major increase in its stake in the world's largest commercial real estate services firm.

Land & Buildings owned 303,040 shares of CBRE with a market value of $29.5M, now its seventh-largest holding. The hedge fund increased its investment in CBRE by nearly tenfold in the quarter, although it hasn't released any public statements about why. 

Litt’s firm also purchased more than 1.1 million shares in single-family rental REIT Invitation Homes, now Land & Buildings' second-largest holding by market value at approximately $39.4M.

Shortly after American Healthcare REIT began trading on the New York Stock Exchange Feb. 7, Land & Buildings scooped up a roughly $22.2M stake. The REIT is the product of the merger of Griffin-American Healthcare REIT III and Griffin-American Healthcare REIT IV.

Litt also took a $16.7M stake in regional mall REIT Macerich, $11.9M in First Industrial Realty Trust and $1.1M in apartment REIT Aimco.

Land & Buildings also expanded its existing holdings, more than doubling its shares in data center REIT Equinix, making it the firm's fourth-largest holding by market value at $38M. Equinix has been the target of a prominent short seller that alleged it is manipulating its accounting to boost its profitability.

The REIT said earlier this month an internal audit found no evidence of wrongdoing.

Land & Buildings further bumped its share count in outlet center company Tanger, Apartment Income REIT and proptech firm SmartRent. In a letter last week, Litt urged SmartRent to consider “strategic alternatives,” including a sale.

In addition to taking a total of seven new stakes, Land & Buildings exited its stake in five other holdings during the first quarter, according to S&P Global.

The largest exit for the investment firm was Tricon Residential, which had been Land & Buildings’ largest holding, valued at $52.8M. The exit came as subsidiaries of Blackstone completed their acquisition of the single-family rental investor.

Land & Buildings also sold its stake in communications REIT SBA Communications, previously valued at $38.4M, as well as retail REIT Agree Realty, hospitality company Hilton Worldwide Holdings and single-family rental REIT American Homes 4 Rent.

Litt is notorious for shorting major office-owning REITs in the earliest stages of the pandemic — and continuing to do so today. Representatives for Litt didn't immediately respond to Bisnow’s request for comment.