http://www.bloomberg.com/news/2013-05-03/lucrative-fees-behind-property-management-spark-fights.html
CommonWealth REIT (CWH) owns office buildings throughout the U.S., yet employs no one. Cole Credit Property Trust III Inc. (0283899D), which leases about a thousand stores around the country to retailers such as CVS, Lowe’s and Wal- Mart, also had no workers until a recent acquisition.
Instead, both real estate investment trusts have been run by outside managers who are paid to choose properties to buy and at what prices, and which ones to sell and when. That has raised criticism from some investors, who say a management company may make decisions for its own benefit -- decisions not necessarily right for REIT shareholders.
“It’s a good business if you can get it,” said Jim Sullivan, a managing director at Green Street Advisors Inc., a Newport Beach, California-based research company. “The adviser does well if the REIT gets bigger, but the shareholders may not be well-served by the REIT getting bigger.”
That conflict has been at the heart of two of the biggest REIT fights this year. CommonWealth, based in Newton, Massachusetts, is battling an attempt by its second-biggest investor to remove its board. Phoenix-based Cole Credit had to fend off a rival’s buyout offer after announcing plans to purchase the firm that oversaw its properties
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