Industrial Preview, Part II: Some like it private As a precursor to November's industrial review, this month I wanted to offer a little preview so you could brace yourselves for what, hopefully, will be an enlightening discourse. One of my questions was inspired by a Wall Street Journal article that discussed the frustrations many REIT executives face as their companies continue to get accustomed to operating as public companies.
With REIT shares lagging, I could not help but ask private developers what they are able to do right now that their publicly held counterparts might have trouble pulling off. Greg Gregory, president and CEO of Atlanta-based Industrial Developments International (IDI), was quick to answer.
"I can ignore Wall Street, and I get great satisfaction in doing that," Gregory says with a laugh. "I don't give Wall Street a second thought. In fact, I don't give them a first thought.
Still, IDI owns shares of many REITs. "That's not to say that being a public company is not the right thing to do because there are a lot of advantages to, being a public company," Gregory continues. "It's just something we've chosen not to do. Well managed REITs - by good real estate people - are a good, long-term investment."
Tom Boyle, vice president of The Alter Group, Chicago, pointed to the mountains of capital available to private developers with a proven record.
"A private developer with a proven track record has [better] access to capital, so we can make deals happen," Boyle says. "Given our financial strength, we're able to go and take down land and run a number of different disciplines internally along the same time frame for the right client. We can really shorten the development schedule."