Green Street's Mike Kirby says the past 20 years have been a "big lab experiment" for the REIT space (no rubber gloves necessary), with evidence to show what has and hasn't worked for CEOs. Excessive leverage was a very painful lesson learned during the downturn, as was overbuilding. By the time trouble hit, all the value created during good times was wiped away. Unless development is in a REIT's DNA, or they have an excellent track record in the area, "don't do it" (put that shovel down and step away). In short: The simpler the better. He knows that might sound boring, but REITs can deliver better total returns if they don't try to "do fancy stuff." (Think Rachael Ray REITs.)
Advice From A REIT Researcher
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Mike Kirby
