10 Questions with Jussi Askola
Global REIT expert. Estimated reading time: 13 minutes
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Today, I’m talking to Jussi Askola, an expert on real estate investment trusts who writes on Substack and Seeking Alpha.
I came across Jussi when doing research on the Singapore REIT market. And I wanted to get his take on some of the REITs I’ve been looking at. Importantly, how does he analyze REITs? And where is he seeing opportunities at the moment? Let’s dig in.
Table of contents:
1. Background and current focus
2. Lessons from covering REITs for years
3. Top 3 characteristics of a REIT
4. Mistakes REIT investors typically make
5. The office REIT market
6. The retail REIT market
7. Jussi's perspective on Link REIT
8. Other REITs in Asia
9. The Russian threat to the Baltic region
10. Contact details1. Thanks for participating, Jussi! Can you tell us briefly about your background and what you’re focusing on right now?
I’ve always been in real estate. From the day I moved to France because of my father’s ventures in the industry, to tagging along on construction sites with him as a teenager, to eventually working in private equity in Dallas, Texas, and acquiring properties in Germany and Estonia.
Today, I run a small investment firm focused on REIT investing. Early in my career, I realized that REITs are often far superior to traditional private real estate investments, so I made the decision to specialize in them.
What I love about REITs is how they let you invest in virtually any type of real estate, anywhere in the world, right from your home — while also benefiting from liquidity, economies of scale, professional management, diversification, and limited liability.
Over the years, I’ve only deepened my focus on REITs as the sector has continued to gain popularity. Interestingly, REITs are currently trading at decade-low valuations, with many individual names priced well below the value of the underlying real estate they own.
I believe this presents a historic opportunity — so that’s where I’m concentrating my efforts right now.
2. What have you learnt over the years of writing about REITs at Seeking Alpha? Any successes and missteps you’re willing to share with us?
I believe every investor should take the time to put their thoughts into writing and share them on platforms like Seeking Alpha or Substack. It’s free — and the feedback you receive can be incredibly valuable.
Sometimes, you might overlook key risk factors. Other times, you may have misjudged the leverage or simply been too optimistic in your assumptions.
That kind of feedback can feel like a cheat code — it helps you course-correct and sharpen your thinking.
I’ve now published over 1,000 articles on Seeking Alpha, so you can imagine I’ve had my fair share of missteps along the way.
One of my bigger early mistakes in REIT investing was putting money into a mall REIT called CBL & Associates (CBL), which eventually went bankrupt. I knew lower-tier malls were struggling, but the valuation seemed too cheap to pass up. What I failed to fully appreciate was just how heavily leveraged the company was— and I paid the price.
I've made a few other similar errors over the years, but I’d like to think I’ve learned from them. Today, I pay much closer attention to leverage.
Fortunately, the wins have far outweighed the losses. I’m especially proud of our track record in identifying potential buyout candidates.
Time and again, we’ve invested in undervalued REITs that were later acquired by private equity firms at significant premiums to our purchase prices.
A great example is American Campus Communities (ACC), which ended up doubling our investment in just two years.
These kinds of opportunities frequently arise in the REIT space, largely because public market investors tend to be very short-term oriented. They often overreact to temporary setbacks —whereas private equity players take a longer view and are more than happy to scoop up quality assets at discounted prices.
Our goal is to get there first — investing ahead of the bigger, slower-moving private equity firms.
3. When you try to assess a new REIT, what are the top 3 factors you look for before investing?
Management quality should be the number one priority. If the management team is conflicted, the rest doesn’t really matter — a bad manager will always find a way to take value from shareholders.
I’m fortunate to have access to many REIT management teams, as they often want to make a good impression in hopes of receiving positive coverage in our REIT-focused newsletter, High Yield Landlord, which reaches thousands of REIT investors. We regularly conduct interviews and make it a point to ask the tough questions to ensure that these managers truly have shareholders’ best interests at heart.
For those who don’t have direct access to management, there are still some key things you can look at. Their past capital allocation decisions can tell you a lot. Have they raised equity at dilutive prices? Did they buy back shares when they were undervalued? Did they take on excessive leverage at the wrong time?
You’ll also want to review insider ownership, the structure of executive compensation, and any recent insider transactions. These can all provide valuable clues about whether management is aligned with shareholders.
4. What mistakes do you think investors typically make when they invest in REITs?
Many investors chase the highest-yielding REITs, assuming that a higher yield will naturally lead to higher returns. But in reality, it’s often the opposite — and CBL & Associates was a prime example of that.
Chasing yield at the expense of growth and safety rarely ends well. There’s little value in collecting a 10% dividend yield if it comes with significant capital erosion and ultimately leads to a dividend cut.
Instead, the goal should be to find a strong balance of yield, growth, and safety. One REIT that I think checks those boxes today is Sila Realty Trust (SILA US — US$1.5 billion).
This newly public REIT offers a well-covered 6.3% dividend yield with a conservative 70% payout ratio. It focuses on net leased healthcare properties—assets that are recession-resistant and provide steady, predictable growth. On top of that, SILA has the lowest leverage in its peer group, positioning it well to continue acquiring properties and growing both its cash flow and dividend.
In my view, the combination of yield, growth, and the potential for multiple expansion makes SILA a far more attractive opportunity over the long run than most REITs offering double-digit yields. We have built our portfolio around such companies.
5. What’s your take on the decline in the value of Office REIT since COVID-19, has the work-from-home trend led to a permanent impairment of value? Or would you be buying here?
I believe offices are here to stay and will eventually recover, as most companies have been gradually bringing employees back to the workplace.
That said, I still think the pain for office REITs will be both significant and prolonged. Even as companies return to the office, many are now embracing hybrid models, allowing employees to work from home one to three days a week.
This shift reduces the overall demand for office space and also changes the kind of space companies are looking for. In the short term, this has favored Class A office buildings while hurting older, more generic properties. Tenants are downsizing their space but opting to stay in newer buildings with better amenities.
However, in the long run, I expect even Class A buildings to feel the pressure. Many vacant Class B buildings will eventually be sold at steep discounts, allowing new owners to reinvest heavily and upgrade them to compete more directly with Class A assets. This will force Class A landlords to spend more to maintain their competitive edge.
It’s important to remember that office vacancy rates are at an all-time high—around 20%—and as long-term leases continue to expire, that number is expected to rise to about 25% in the coming years. It’s going to take time—possibly years—before the sector fully stabilizes and returns to growth.
Given this outlook, I don’t believe office REIT valuations are low enough relative to other property sectors — especially considering the added risk of a potential recession.
6. What’s your take on retail REITs, and the risk of disruption from growth in e-commerce – will shopping malls remain relevant, and what should we look out for?
I believe most retail REITs will do just fine over the long run. There's a common misconception that Amazon and e-commerce are killing malls, but the reality is quite different. Class A malls — like those owned by Simon Property Group (SPG)— are actually generating higher sales per square foot today than ever before.
These top-tier malls have evolved by diversifying their offerings to include entertainment, services, and in many cases, even office and residential components. They've become mixed-use destinations and community hubs, drawing steady foot traffic that’s no longer reliant solely on traditional retail. Many stores now also function as last-mile distribution and return centers. Even digitally native fashion brands are increasingly opening locations in malls.
Of course, you're right to point out that lower-quality malls that failed to adapt have struggled—and many have already shut down. But that actually works in favor of REITs like SPG, since it reduces supply and concentrates traffic toward the remaining high-quality malls.
Beyond malls, there’s also a large segment of retail REITs focused on service-based and grocery-anchored strip centers. One we particularly like is Kite Realty Group (KRG US — US$4.6 billion).
It owns primarily grocery-anchored centers in high-growth Sunbelt markets. KRG has the lowest leverage among its peers, strong long-term growth prospects, and is currently trading at a historically low valuation. It wouldn’t surprise us if it became one of the next REITs to be acquired by private equity.
7. When you saw my presentation for Link REIT (823 HK), what was your initial impression? Feel free to criticize.
I thought your analysis was spot on. I agree — this is generally a solid REIT. It owns high-quality assets, has a reasonably healthy balance sheet, and it's internally managed, which is quite rare in many Asian markets. Like most REITs today, its valuation is also quite low.
That said, my main concern with Link REIT (823 HK — US$11 billion) — and many others in the region — is the political risk and how that could impact performance over the long term.
Right now, Link REIT is caught in the crosshairs of the ongoing trade tensions. The U.S. has imposed significant tariffs on China, and China has responded with its own. This dynamic could put serious pressure on China’s economy, which would likely spill over into Hong Kong — and retail, being cyclical, would suffer as a result.
Longer term, I’m also uneasy about what could happen if China decides to invade Taiwan and the world responds with major retaliation. The consequences for REITs operating in this region could be substantial.
So ultimately, whether Link REIT is a good investment depends heavily on your outlook for China’s future. That’s why I’m staying on the sidelines for now. It may be cheap — but so are many other REITs around the world, without the same level of geopolitical uncertainty.
8. Have you seen any other REITs in Asia that you personally think are attractive? Or any other REITs that you have invested in?
I’ve come across several Asian REITs that initially looked promising, only to regret investing in them later. One example was Suntec REIT (SUN SP — US$2.5 billion) in Singapore.
I was familiar with its properties, and at the time, it seemed like a compelling way to gain exposure to prime Singapore real estate at a discount—an appealing diversification play.
But the core issue with many Asian REITs, including Suntec, is poor management and serious conflicts of interest. As I’ve mentioned before, if a REIT is mismanaged, everything else becomes irrelevant — and unfortunately, that’s a common problem in Asia.
Many of these REITs are externally managed by sponsors who are more focused on collecting fees than creating shareholder value. They’ll routinely issue new shares even when it’s dilutive, just to grow the asset base and justify higher management fees. Another common practice is “asset dumping,” where the sponsor develops properties separately and then sells them to the REIT at inflated prices. It’s a strategy that would never be tolerated in the U.S., but remains widespread in parts of Asia.
I’ve even worked as a consultant for one of the largest Asian REITs, and spending time with their CEO gave me a firsthand look at how these dynamics play out at many REITs behind the scenes.
9. Given that you’ve served as a Special Forces Intelligence Officer in the Finnish Defense Forces and live in Estonia, I have to ask: what do you make of the Russian threat to the Baltic Region? What’s the mood on the ground?
Just to clarify, I’m only a reserve officer, so I don’t have any kind of “insider information.”
That said, I follow the situation in Ukraine very closely and have been there six times since the start of the war to help deliver gear to Ukrainian fighters.
The reality on the ground is that Russia is struggling — despite what their propaganda would have you believe, this invasion has been a massive failure. A few key facts help put things in perspective:
At the end of March 2022, Russia occupied around 30% of Ukraine. Three years and approximately 900,000 casualties later, that number is down to just 19%.
At the start of the full-scale invasion, Ukraine controlled 23 regional capitals and cities with special status. It still controls all 23. Russia hasn’t captured a single one.
Russia has completely failed to meet its stated strategic objectives of "demilitarization" and "denazification"—goals that would require a full regime change in Ukraine. In reality, Ukraine is now more sovereign and more militarized than ever.
Russia is losing military equipment at a rate it simply can’t replenish. It has relied heavily on its inherited Soviet-era stockpiles, which are now rapidly dwindling. Its current production capacity isn’t anywhere near sufficient to make up the shortfall.
Economically and demographically, the war is unsustainable for Russia. Its economy is overheating due to labor shortages, surging public spending, and international sanctions. The situation has become so strained that the Russian central bank has raised interest rates to 21%.
Given all this, the idea of Russia launching an invasion of the Baltic states — NATO countries — seems extremely far-fetched. Especially now that Finland and Sweden have joined the alliance, and with European defense spending ramping up significantly, led by countries like Poland.
10. Where can readers go to learn more about you and your service?
Thanks for letting me plug my service!
I run a REIT-focused newsletter on Substack called High Yield Landlord.
It’s the largest REIT newsletter online, as far as I know. We publish one free article each week, typically highlighting one of my top opportunities at the time.
For those looking for more, we also offer a premium tier that includes full access to my personal, real-money REIT portfolio, along with all trade alerts and in-depth research — shared in real time. There’s a 2-week free trial if you’d like to check it out and see if it’s a good fit for you.
Respondent’s disclaimer: The comments above constitute my personal views only, and all names mentioned here are not to be construed as recommendations to buy or sell any of the aforementioned securities.
I was a subscriber to his service on seeking alpha for several years. The performance of their portfolios was sub-par and they were not very transparent about it. As with many newsletters: buyer beware.
geopolitical analysis is pathetic, as usual, but what can one expect from Russo/sinophobic Scandinavians...