REIT management teams will face a range of questions during Nareit’s REITweek: 2021 Investor Conference that are likely to address their medium and longer-term outlooks, the impact of inflation, possible tax changes, ESG matters, interest rates, mergers and acquisitions (M&A), and more, the 2021 REIT Investor Relations Symposium heard.
Hosted by Nareit and the New York Stock Exchange, the fifth-annual symposium included a panel discussion, The Grand Re-Opening, moderated by Greer Aviv, senior vice president, investor relations, at Iron Mountain Inc. (NYSE: IRM). The panel included Duong Nguyen, senior analyst at CenterSquare, and David Rodgers, senior research analyst at Robert W. Baird & Co.
Nguyen noted that given the impact of the pandemic on REIT results in 2020, year-over-year growth comparisons might not be particularly meaningful. Rather, investors will be more interested in hearing about the pace of recovery and REIT management teams’ long-term positioning plans, she said. Rodgers agreed, saying that investors want to know where companies are headed post-recovery.
Inflation will also be a key area of investor interest—“is it transitory or a long-term trend?” Nguyen said. Companies will need to show how inflation could impact their costs, she added. Meanwhile, the Biden administration’s legislative tax proposals, including possible changes to 1031 like-kind exchanges, could also be discussed, Rodgers said. In addition, investors will want to hear from REIT management teams about the impact of interest rates and their availability of capital, he noted.
Another topical issue for this year’s REITweek involves M&A. Rodgers said he expects to see continued M&A activity for the rest of 2021 and into 2022, potentially presenting REIT management teams with “unique opportunities.” Both Rodgers and Duong said they expect to see more go-private deals, on balance, although Duong added that an uptick in companies seeking a public listing could also occur. In any case, REIT management teams need to be thinking about M&A activity and have an answer to any investor questions, she stressed.
The panel also looked at steps that REIT investor relations (IR) teams have taken to improve transparency over the past 18 months. Duong and Rodgers both pointed to a trend toward more frequent IR communication, as well as the use of a variety of methods to communicate. The selective use of voicemail drops by IR teams has been effective, Rodgers pointed out.
Duong and Rodgers also encouraged REITs to include as much meaningful information as possible in their earnings releases, and to use earnings calls for further explanation or discussion of that information.