Next in Line

Next in Line This is a busy week for the REIT sector as investors and executives gather in New York City for NAREIT’s REITWeek, an opportunity for REIT execs to be sequestered in their hotel suites for two days of around-the-clock meetings with investors, analysts, and research types to talk about their performance and the outlook for the year to come. Once upon a time, when I was a REIT CFO, I recall that investor conversations rarely addressed organizational planning and most importantly, succession planning for the company’s top executives. Let’s face facts – who is driving the ship, and the team around him or her, is central to the performance and long-term health of the company. Yesterday, one of the finest examples of succession planning played out with the announcement that AvalonBay Communities’ Bryce Blair will be stepping down as CEO at the end of 2011, and Tim Naughton, the current President, will step up and assume the reins. Bryce and Tim worked together at AvalonBay for 20 years and thus it will be a natural and seamless transition. Tim is a star, but with his own view of the world and approach, which will help guide the company into its next generation. Regrettably, we observe few companies that have succession planning as well thought out, or for that matter even seriously considered. The real estate industry has been chronically slow to make organization development a top priority. It’s about time, especially in these trying times.