Land & Buildings buys into Lamar Advertising, sells off Alexandria in Q2 2023

Activist investor Land & Buildings Investment Management LLC increased its share count in a majority of its holdings in the second quarter, closing the period with an 18-stock portfolio valued at $475 million, according to the firm's most recent Form 13F filing.

Position increases

The largest new addition to Land & Buildings' portfolio was Lamar Advertising Co. The firm bought 317,770 shares of the advertising real estate investment trust valued at $31.5 million at the end of the second quarter.

Other new REIT stocks added to the firm's portfolio included Tanger Factory Outlet Centers Inc., valued at $25.6 million, and real estate services company CBRE Group Inc., valued at $21.7 million.

Land & Buildings also bought back into casino REIT VICI Properties Inc., which it had exited in the first quarter of 2022. At the end of the quarter, Land & Buildings' stake in VICI Properties was valued at $24.7 million.

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Looking at existing positions, Land & Buildings increased its share count in healthcare REIT Ventas Inc. by 55.9% to $41.7 million in the second quarter, making it the firm's third-largest position by market value as of June 30. In late April, Land & Buildings issued an open letter expressing disappointment with Ventas' performance and valuation relative to its peers and pushed for change at the REIT's board.

The firm also more than tripled its share count in self-storage REIT Public Storage while boosting its stakes in manufactured home REIT Sun Communities Inc. and industrial REIT Prologis Inc.

Position decreases

The firm's most notable exit during the quarter was from life sciences office REIT Alexandria Real Estate Equities Inc. On June 16, Land & Buildings published a white paper showcasing some of the effects the work-from-home trend has had on the life science office market, with a focus on Alexandria Real Estate. In the report, Land & Buildings said that if the path for life sciences follows the trend set by traditional office space, Alexandria Real Estate could trade at significantly lower valuations compared to current levels.

Land & Buildings also sold its stake in self-storage REIT Life Storage Inc., which was acquired by Extra Space Storage Inc. on July 20. It likewise shed its stakes in shopping center REIT Retail Opportunity Investments Corp. and homebuilder D.R. Horton Inc.

Aimco remained Land & Buildings' largest holding by market value as of June 30, at $67.0 million, even as the firm sold off 16.9% of its stake during the second quarter. In April, the investment firm issued an open letter to Aimco's board, expressing concerns that the board is not acting swiftly enough to maximize shareholder value as the REIT continues to trade at a deep discount to its net asset value. In the letter, Land & Buildings urged Aimco to engage in a full public strategic review process to evaluate all potential alternatives, including a sale, to deliver value for shareholders. As of June 30, Land & Buildings held a roughly 5.5% stake in the REIT.

Land & Buildings dropped nearly 80% of its share count in hotel REIT Host Hotels & Resorts Inc. during the recent quarter, along with more than one-third of its stake in theme park operator Six Flags Entertainment Corp. and 21.4% of its position in multifamily REIT Independence Realty Trust Inc.

Sector exposure

The firm held the highest exposure to residential REITs, at $186.4 million in aggregate. Within the residential sector, $123.7 million was held in multifamily REITs, while the firm's manufactured home REIT holdings accounted for $32.3 million and its single-family rental REIT positions totaled $30.4 million.

Holdings in industrial REITs were the next-largest, at $48.5 million, while casino and gaming-related companies followed with $41.9 million.