When conditions in the marketplace change, successful enterprises make adjustments. “Adapting for Success,” an article in the Winter 2016 issue of Knowledge Leader magazine, looks at the aggressive investment strategies used by Pure Industrial Real Estate Trust (PIRET) to become one of Canada’s largest public real estate investment trusts (REITs).
With a little bit of daring and the willingness to change, PIRET was able to make focused alterations to their operating strategy in response to external market conditions—without abandoning their original goals. In 2013, the company was in a high-growth mode and investor sentiment was positive, but a surge in U.S. treasury yields in the summer of 2013 had a strong negative effect on REITs. There was widespread fear of dramatic interest rate increases. PIRET’s goal was to continue its growth, but market circumstances took away much of their ability to issue equity. There was no way to avoid it; they had to make changes in the way they acquired property.
PIRET’s strategy had four components: They began strengthening their balance sheet. They explored development opportunities to complement their acquisition goals. They focused on establishing venture relationships with strong partners, and they undertook a capital recycling program to improve the quality of their tenants. In the end, the company transformed itself and its operations, and is now even stronger and well-positioned for the future.
Download the Winter 2016 of Knowledge Leader to learn more about PIRET’s adaptive strategies and how PIRET moved into the U.S. market in 2014, a move that took them to a different level with a leading global ecommerce provider.