“More is not better. Better is better."
Every REIT manager faces the same question: grow the portfolio or optimize what you own? From 1995 to 2020, the average REIT's footprint expanded 5% annually—new acquisitions, new developments, new markets. Conventional wisdom suggests that scale creates value. But a recent study of U.S. equity REITs over that 25-year period found something unexpected: fast-growing REITs delivered no better stock performance than their slower-growing peers. Growth, it turns out, isn't accretive: REITs are “unable to create excess value by way of property acquisitions or expansion alone.”1
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