Rising interests rates will have a major impact on REIT investment activity this year, according to Doug Ressler, a senior research analyst at Yardi's Commercial Café. Yardi recently released a new report analyzing office investment activity in the Los Angeles market. The report suggests minimal growth this year for the L.A. market, and pegs the area as a mid-strength market. To find out more about how REIT investment will change this year, and how the office performance is impacting REIT acquisition strategy, we sat down with Ressler for an interview.

GlobeSt.com: How is the office performance in Los Angeles in the fourth quarter going to impact REIT acquisitions this year?

Doug Ressler: Investors and REITs will need to change tack, acquiring for “strategy-to-suit” tenants. This is a more proactive approach where your improvements revolve around who your tenants will be and the rents they will support. Another thing they'll have to monitor is area demographics to support anticipated work force, plus more rigid expense control in building cost efficiencies, especially energy, adapting and installing “Smart” technologies.