NEW YORK CITY—Facing an ever changing market, industry executives at the 20th Annual REIT Symposium, hosted last week by the NYU School of Professional Studies Schack Institute of Real Estate, spoke about the differences they see in the industry now compared to the past as well as what they expect to happen in the years to come.
“Institutions aren't into REITs right now, they turn off and on and they are off now,” noted Theodore Bigman, Managing Director, head of global listed real assets at Morgan Stanley Investment Management. “But we hope that changes.”
Added Joel Marcus, chairman, CEO and founder of Alexandria Real Estate Equities. “Funds trade in and out of stocks much more than they did pre-Lehman. Funds used to hold stocks for five years but that's changed in a remarkable way.”
Today's demographic trends are shaping the activities of REITS, according to panelists in a State of the Industry discussion. “Today, when you think about real estate—which is such a local business—and serving the community, you're making local business decisions,” observed Donald Wood, president and CEO of Federal Realty Investment Trust. “When you think about what retail product a community needs, it's more than just a clean parking lot and a store—it's an experience.
“Today, consumers don't need to come to your shopping center, they have to want to come,” he continues. “That's a big difference. So food is a bigger part of what we do, lifestyle and health is bigger. That's where you'll see the biggest difference 10 years from now.”
Others looked out as far as 20 years from now. “More education and workforce training will be integrated into 'real estate sites' in 20 years,” said Marcus. “Whether it's retail or our innovation centers, that could be a breakthrough for the millennial generation.”
Ultimately though, being a REIT doesn't determine your operating strategy, said Bigman. “REIT is just a tax classification, it doesn't define your investors or what you want.”
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
