Nareit’s REITworld: 2024 Annual Conference convened 1,300 REIT leaders and industry professionals Nov. 18–21 in Las Vegas. Nareit wishes to extend its appreciation to the event’s 21 sponsors, including Diamond Sponsor LoopNet.
At REITworld, Nareit recognized its member companies that have demonstrated superior and sustained environmental practices through its 19th annual Leader in the Light® Awards program. Nareit also presented two individual awards at REITworld. Timothy Naughton, executive chairman of AvalonBay Communities, Inc. and Nareit’s 2017 chair, was honored with Nareit’s 2024 Industry Leadership Award; and Prentiss Feagles, partner at Hogan Lovells, was honored with Nareit’s 2024 Industry Achievement Award.
Continue reading for a recap of the general and concurrent session presentations at this year’s event.
REITs and Sustainability
How investors evaluate REIT sustainability performance, sustainability program maturity, and sustainability-related risks and opportunities, and how they inform decision-making, were among the themes of a REITworld 2024 panel.
Jessica Long, senior vice president for sustainability at Nareit, moderated the panel, which included Elena Alschuler, Americas head of sustainability at LaSalle Investment Management, Hugo Machin, co-head of global real estate securities at Schroders, and Doug Morrow, ESG strategist at BMO Capital Markets.
Panelists also discussed how REITs are providing greater transparency about their responsible business practices and how their approach to managing climate-related risks is creating and protecting long-term value.
During the discussion, Morrow noted that the evolution from voluntary to mandatory sustainability reporting isn’t a linear process. The bottom line, he noted, is that investors want to see “structured and comparable” data, and that requirement is unlikely to change, even in light of recent political shifts. Alschuler noted that a second Trump administration is likely to see a move back to the states, which will increase the patchwork of sustainability regulations.
Meanwhile, Machin pointed out that fund managers seem to be pulling back from including “sustainable” in fund names. Morrow added that while companies are not going to stop reporting on sustainability, the language they use is shifting.
Turning to sustainability goals and governance, Alschuler said her firm is moving away from making top level targets the priority, and instead is taking a more granular approach.
As for how REITs compare with other sectors on sustainability, Morrow said that “REITs stack up well. There’s no doubt about it.” Machin told the panel that “REITs are well-positioned as guardians of the built environment.”
Alschuler, meanwhile, stressed the importance of storytelling in terms of companies getting their sustainability story out, rather than just presenting numbers on a page.
Social Impact: REITs and Collaborative Strategies
A panel at REITworld explored social impact in the workplace and how REITs can create meaningful opportunities for students seeking a greater understanding of financial investing.
Ayris Scales, senior vice president, social responsibility and global initiatives at Nareit, moderated a discussion between Cedric Bobo, CEO and founder of Project Destined, and Nataly Valadez, management trainee at Kimco Realty Corp. Valadez is an alumnae of Project Destined and received her placement with Kimco as a result of the program.
Bobo talked about his vision for Project Destined, a social impact education platform that specializes in training underserved students in real estate and finance, noting the importance of increasing entrepreneurial growth within the REIT industry. Nareit and Project Destined first launched an internship program together in the fall of 2022; and more recently announced the Fall 2024 REIT Bridge Program, a six-week educational program for college students and recent grads supported by a Nareit Foundation Dividends Through Diversity grant.
Valadez told her personal story about how she saw real estate as “a place to call home” when she first learned about the career path in college, noting that her involvement in Project Destined has helped her build confidence.
Other topics discussed included mentorship, key performance indicators, and actionable strategies for REITs to enhance their community engagement efforts.
CEO Perspectives: The Current and Future REIT Industry
REIT CEOs’ perspectives on the current and future REIT industry took center stage during the first lunch general session at Nareit’s REITworld. Nareit’s 2025 Chair Conor Flynn, CEO of Kimco Realty Corp. moderated the panel, which also featured: Angela Aman, CEO of Kilroy Realty Corp.; Edward Pitoniak, CEO of VICI Properties, Inc.; and Andrew Power, president and CEO of Digital Realty.
During the discussion, each panelist focused on their respective sectors. Aman highlighted how new full-time return-to-office policies and the venture capitalism industry are helping improve the office outlook on the West Coast and how companies are focusing on creating work environments that foster productivity. In his remarks, Pitoniak noted two of VICI’s current priorities: ensuring that active managers truly understand VICI’s value proposition and properties and ensuring that VICI remains relevant to clients and consumers.
Power discussed the importance of scaling to meet multinational companies’ global needs and the challenge of balancing current and future constituencies. Other topics included the panelists’ insights into the REIT industry as a whole; the importance of getting change management right; and their appreciation of their companies, the people who work for them, and the positive impact their companies are having on tenants and consumers.
Economic Outlook: REIT & CRE Market Performance
The outlook for REITs in 2025, trends in capital issuance, and active managers’ shifting REIT allocations were some of the key topics that panelists discussed during this economic outlook. John Worth, executive vice president of research and investor outreach at Nareit, moderated the panel, which also featured: Nicole Funari, vice president of research at Nareit; Steve Loffman, managing director at Raymond James; and Edward Pierzak, senior vice president of research at Nareit.
Loffman discussed what he expects to see in 2025, noting that private and public market valuations will continue to converge, transactions will increase, and more REITs will partner with joint ventures to raise capital: “We’ll see a ton of [REIT and JV] partnerships over the next couple of years.”
Pierzak expounded on the private and public market convergence theme, using third quarter data to illustrate the 69 basis point spread between REIT and private real estate cap rates. He also gave an overview of third quarter REIT performance data, noting that REITs have solid balance sheets and sound fundamentals, which “continues to gives them a great competitive advantage over their private counterparts.”
In her remarks, Funari focused on how active managers are continuing to shift their allocations to the digital and health care sectors. Using data from Nareit’s actively managed real estate fund tracker, Funari explained that for nearly a decade, active fund managers underweighted telecommunications.
“Some of that is likely due to benchmarking issues, but this year we’ve seen telecommunications flip,” she said. “In the third quarter, telecommunications had the second highest investment at 15.5%. Residential had the highest at 16.9%, but telecommunications is right behind it and closing that gap.”
Other topics included mergers and acquisitions, equity and debt issuance, and the likely rise of overnight transactions.
Investor Perspectives on REITs
Members of Nareit’s Investor Outreach team outlined the work they undertake with financial advisors, fund managers, and pension plans in an effort to increase understanding of REITs and the performance benefits they can offer across investment portfolios.
Nareit’s Kurt Walten, senior vice president, investment affairs, led the discussion at REITworld 2024, alongside Abby McCarthy, senior vice president, investment affairs, and David Sullivan, senior vice president, investment affairs.
Some of the key points raised by the panel included the fact that close to 90% of institutional investors view an investment in REITs as an investment in real estate, and that REITs play a key role in creating a diversified portfolio.
Nareit shares the message that REITs offer access to those newer sectors of the economy that are attracting widespread investor attention today. That message is taking hold, as the team pointed to recent case studies featuring Norges Bank Investment Management and Employee Retirement System of Texas that show how these investment platforms have turned to REITs to access new sectors as well as international markets.
Meanwhile, Walten, McCarthy, and Sullivan pointed out that REITs consistently outperform private real estate, although more needs to be done to convey that message. The team also noted that about 78% of financial advisors are recommending that their clients use REITs.
Washington Update: Post-Election Round Up and 2025 Outlook
During a post-election analysis panel at REITworld, policy and public affairs experts discussed the 2025 outlook for the upcoming legislative session for REITs and the commercial real estate industry.
Cathy Barré, Nareit’s executive vice president, policy and public affairs, led the discussion with John Jones, senior vice president, government relations, and Robert Dibblee, senior vice president, government relations.
Jones broke down the House and Senate Democratic leadership; and Dibblee talked through the incoming committee chairs: “There’s going to be nine new Senators in the U.S. Senate [and] 60 new House members,” Dibblee said.
Barré discussed tax policy and economic considerations for the upcoming tax legislation, as well as the potential impact of the narrow margins in the U.S. House and Senate that legislators will be navigating to pass tax reform through the reconciliation process.