If you’ve been watching the REIT sector lately, you’ll have noticed something: private equity can’t stop buying. In the space of a single week when we recorded this episode, three REITs were either acquired or approached for buyout – Whitestone REIT, SBA Communications and Unity Group. That’s not noise. That’s signal. And our guest this week, Jussi Askola, has been watching this sector closely enough to know exactly what it means about REIT investing.
Jussi is the founder of Lundberg Capital, a REIT investment firm advising family offices and small institutional investors. He runs High Yield Landlord, one of the largest paid REIT investor communities online. He’s written a book – The REIT Advantage – and he has roughly half of his personal net worth invested in REITs. This is not someone selling you a course. This is someone with real skin in the game.
Originally from Finland, raised in France, educated in Germany, with a stint in the US before settling in Tallinn, Estonia, Jussi also brings an authentically European perspective to a sector that is dominated in public discourse by American voices. That combination of deep REIT expertise and European context made this one of the most useful conversations we’ve had on Dividend Talk.
Here’s what we covered.
Jussi’s insights on REIT investing offer a unique perspective that benefits both novice and experienced investors.
Understanding the Fundamentals of REIT Investing
Jussi opened with some context that every REIT investor needs to understand: the sector has been in a bear market for three to four years. Valuations have fallen to historically low levels, with many REITs trading at large discounts to the net asset value of the properties they actually own.
That discount is what private equity is acting on. Firms like Blackstone, Brookfield and KKR are doing the maths: if a REIT is trading at a 30% discount to NAV in the public market, they can pay a 20% premium to acquire it and still buy the underlying real estate at a meaningful discount. They get professional management, diversification, economies of scale – and they earn asset management fees along the way. When conditions eventually improve, some will bring these portfolios back to the public market at a premium.
For retail investors, this wave of M&A has two implications. First, if you own one of these deeply discounted REITs, you might get a buyout premium. Second, these acquisitions reduce the number of publicly available options. But as Jussi pointed out, with over 1,000 REIT-like entities globally across 40+ countries, there is no shortage of hunting ground.
The Number One Thing Jussi Looks for in a REIT (It’s Not the Yield)
Before Jussi looks at a balance sheet, a portfolio, or a dividend yield, he looks at management. He’s direct about why: “If there are conflicts of interest, the rest of the story really doesn’t matter.”
The clearest structural red flag is external management. Externally managed REITs outsource operations to a third party that earns fees based on the volume of assets under management. This creates a powerful incentive to grow the asset base regardless of whether that growth creates value for shareholders. More acquisitions means more fees – even if those acquisitions are destroying per-share value. Internally managed REITs, by contrast, pay their teams salaries tied to KPIs like FFO per share growth or total shareholder returns. The incentives point in the right direction.
Beyond structure, Jussi looks at capital allocation history. When the REIT was trading at a steep discount, did management buy back shares – or issue new equity? When they traded at a premium, did they use that to acquire good assets cheaply? He looks for management with meaningful equity ownership, and he notes that CEOs who are willing to come on investor-focused podcasts and face hard questions are usually the ones with nothing to hide. It’s a small data point, but it matters.
European REITs, Jussi flagged, have a particular problem here. Many are run with an empire-building mindset, raising capital and acquiring assets even when the spread between the cost of capital and the cap rates on properties being bought is negative – effectively destroying value with every deal. He considers this so prevalent that it makes most European REITs uninvestable, with a handful of well-run exceptions like Cibus and Vonovia.
REITs vs Private Real Estate: The Leverage Misconception
One of the most practically useful sections of this conversation was Jussi’s takedown of the most common argument people make against REITs: that private real estate lets you leverage up whereas REITs don’t.
It’s a misconception that he encounters constantly. When you buy shares in a REIT, what you’re buying is the equity – not the total asset value. If a REIT has a 50% loan-to-value ratio and you put in €50,000, you’re effectively controlling €100,000 of real estate. If the LTV is 70%, you’re controlling closer to €150,000. REITs are leveraged investments – the leverage just lives on the balance sheet, not in your name.
And that distinction matters for more than just semantics. With REIT leverage, you don’t personally sign the loan. You don’t pay origination fees. Many REITs locked in long-term fixed-rate debt when interest rates were much lower, meaning investors buying today still benefit from that cheaper borrowing. Lenders treat large, SEC-regulated, professionally managed companies more favourably than individual private landlords, which typically means better terms too.
The cash flow yield comparison also goes in REITs’ favour. REITs are required to distribute 90% of taxable income, but taxable income is materially lower than actual cash flow due to depreciation. Many REITs retain 30–50% of cash flow after paying dividends. So comparing a REIT’s dividend yield directly against a private property’s rental yield is comparing apples to something else entirely. The cash flow yield tells a very different story.
Jussi’s Three-Bucket Framework for Finding Value
Jussi describes himself as a value investor, but not a dividend growth investor in the traditional sense. He doesn’t require a long history of dividend growth, and he won’t automatically avoid a company that has cut its dividend. The WP Carey situation is a good example: when the company restructured, sold its office properties and reset its dividend, the market sold it hard. Jussi bought heavily. His thesis was that the underlying property values hadn’t changed – the reset was painful for income-focused investors but was the right move for the long-term health of the business. The stock has since recovered strongly.
His framework sits across three buckets:
- Blue chips: Highest quality REITs with strong balance sheets, Class A assets and reliable growth. The problem is they rarely trade at significant discounts. There’s not much repricing upside when everyone already knows they’re good.
- Deep value: Structurally broken REITs with conflicted management, excessive leverage and troubled assets. Jussi generally avoids these – the headline cheapness is usually warranted.
- Quality value (where he spends most of his time): Solid REITs facing temporary issues that the market is treating as permanent. An oversupplied sector, a lease default, a short-term dip in growth. These are situations where the market’s short-termism creates a window for investors willing to be patient.
The key – and the hardest part – is distinguishing temporary headwinds from structural ones. His Alexandria Real Estate investment is a cautionary illustration. What looked like temporary life-science oversupply became a much more complex story when US health policy disruption began moving demand offshore. A two-to-three year thesis became a five-plus year, much more speculative one.
Where Jussi Is Looking Now: Specific Stocks and Themes
Across the listener Q&A section of the episode, Jussi shared views on a large number of names. Some highlights:
- Shurgard – His top European REIT pick at time of recording. Self-storage in Europe is structurally undersupplied, the concept is still growing in popularity, and the valuation discount relative to US peers is steep. He also flagged potential M&A interest from Public Storage, which already owns around 20% of Shurgard.
- HASI – A near 5% yield with guided FFO-per-share growth of 8–10% annually, which Jussi thinks will come in at the high end. He bought around $30 and sees it as a buy-and-hold with renewable energy secular tailwinds.
- Camden Property Trust – A classic blue chip that’s drifted into quality value territory as the residential sector deals with oversupply. Management has been buying back shares aggressively. He expects conditions to improve meaningfully from 2027.
- Rexford Industrial – Discounted due to Southern California oversupply but he sees it as a structural supply-constrained market long term. Also flagged as a potential Prologis acquisition target.
- EPR Properties – Owned for years and sold successfully, but now cautious. Nearly 40% of rental income from movie theatres, and the AI disruption risk to content production and distribution keeps him at arm’s length.
- Primary Health Properties – On paper attractive, but high leverage and high payout ratio mean less margin of safety than the headline yield suggests.
- Getty Realty – Sceptical on structural grounds. Heavy exposure to car washes (low barriers to entry, increasing competition) and gas stations (long-term EV risk). Would need a much steeper discount.
- Asian REITs – Currently owns none. Management conflicts and misalignment in Asian markets are, in his assessment, materially worse than even the problematic parts of Europe.
The Bull Case for REITs Even Without Rate Cuts
One listener asked the question a lot of REIT investors are sitting with: what if interest rates just don’t fall the way the thesis requires?
Jussi’s answer was reassuring in its honesty. Lower rates are not required for REITs to generate decent returns – they’re a bonus. With LTVs averaging in the mid-30s, REIT balance sheets are among the most conservative in the sector’s history. A REIT priced at 10x cash flow, paying a 5% dividend and growing cash flow at 5% annually gets you to 10% total returns with no multiple expansion needed. If rates do fall and capital rotates back into the sector, that’s upside on top.
He does believe the AI revolution will ultimately be deflationary and pull rates lower over time. But he’s not betting on the timing, and he’s not asking you to either.
About Jussi Askola
Jussi Askola is the founder of Lundberg Capital, a REIT investment firm advising family offices and institutional investors. He runs High Yield Landlord, one of the largest paid REIT investor communities online, featuring weekly research, exclusive REIT CEO interviews and a live portfolio. A free tier with approximately one report per week is available, along with a 14-day free trial for the paid tier.
His book, The REIT Advantage, is available on Amazon for approximately $20 and makes the case for REITs over private real estate before walking through a decade of hard-won investing lessons.
You can find Jussi on Seeking Alpha and on YouTube by searching High Yield Landlord.
Listen to the full conversation with Jussi Askola on Dividend Talk – available now on Spotify, Apple Podcasts and YouTube.
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