Last week, Barron’s published a damning investigation of two high-end hotel real estate investment trusts (“REITs”): Ashford Hospitality Trust (AHT) and Braemar Hotels & Resorts (BHR). It raises a question every REIT investor should ask before they buy a single share.
Who are these companies actually managed for?
By law, a REIT must distribute at least 90% of its annual taxable income to shareholders in the form of dividends. This structure is explicitly designed to align management’s interests with those of their income investors.
Even so, it can be abused.
That much is clear since Ashford’s shares have fallen 99.9% since 2014. BHR, meanwhile, has declined roughly 90% since going public in 2013.
And they can’t blame the pandemic for those losses. Not when their tenants have more than recovered. Hyatt, for instance, is up 74% since January 2020, and Marriott is up over 137%.
Barron’s is clear about where it believes the blame lies, and that’s with Monty J. Bennett, founder and chairman of both REITs. He’s also the CEO of Ashford, their external manager.
Bennett has presided over a fee arrangement that extracted $1.9 billion from them over the past decade. And that’s on top of C-suite executives and related leaders collecting $110 million in compensation and $70 million in dividends.
So someone was making money. It just wasn’t the shareholders.
This is why I’m automatically suspicious of any REIT that’s run by an external manager. It can be done right, but management fees can too easily dictate the entire business.
Asset growth increases the fee base. Complexity increases the fee base. Transactions, whether accretive or not, generate even more fees.
The result? Incentive to act in the shareholder’s interest exists only when the contract demands it.
It’s hard to think of more drastic examples of this principle playing out than Ashford and Braemar. But they nonetheless provide a great chance to remind investors that management matters.
Never back a company that won’t back you.
Ladder Capital: A REIT Run the Right Way
Before I recommend any company of any kind, I research:
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Who runs it
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How it’s compensated
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Whether its financial interests point in the same direction as mine
Those are not mere details. They’re the foundation of successful investing.
That’s why I like REITs like Ladder Capital (LADR). It’s a commercial real estate finance company that’s literally run by shareholders.
Insider ownership isn’t a mere talking point at Ladder. It’s a structural feature of the business, with co-founders Brian Harris and Pamela McCormack holding significant equity stakes since the company’s 2014 IPO. And the rest of management have skin in the game as well.
The stress test that matters most for any commercial real estate lender is not the pitch deck. It’s how the balance sheet behaves when credit markets seizes.
In which case, Ladder Capital is an absolute pro.
In March and April 2020, commercial mortgage-backed securities (“CMBS”) spreads widened dramatically, intensely affecting most other commercial mortgage REITs (“mREITs”). Yet while the competition dealt with margin calls, asset liquidations, and dividend suspensions…
Ladder drew down its revolving credit facility proactively, built its cash position, and maintained its loan book with manageable loss provisions.
The company still had to cut its quarterly dividend that year from $0.34 to $0.20. However, it never suspended it because it didn’t have to. It instead resumed increases as conditions normalized and will presumably continue doing so.
Today, its dividend is $0.23 based on a strong balance sheet that features substantial allocation to agency securities and cash alongside its loan portfolio.
Ladder has outright proved it is possible to successfully navigate even an exceptionally damaging credit cycle – without destroying shareholder equity or eliminating income streams. It just requires intelligent, ethical, experienced management that’s properly incentivized.
Another Excellent REIT Example of Shareholder-Management Alignment
Another easy example of how management matters is Agree Realty (ADC). There, insider buying has produced a smarter, stronger balance sheet that’s fueled a larger, safer dividend.
Richard Agree founded the company in 1971 and took it public in 1994 as a plucky little landlord. His son, Joey, took over as CEO in 2013 and has since transformed it into one of the highest-quality retail REIT platforms around.
Agree now has a:
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Portfolio of 2,674 properties across all 50 states
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Net debt to recurring earnings before interest, taxes, depreciation, and amortization (“EBITDA:) ratio of 4.9 times
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Total debt to enterprise value of just 25.5%
Plus, 66.8% of its annualized base rent comes from investment-grade retail tenants.
The REIT has grown its dividend for 13 consecutive years, which it pays out monthly. That’s a deliberate choice to reward income investors with more frequent compounding – and one that reflects management’s confidence in the durability and predictability of the company’s underlying cash flow.
It’s also the choice of someone set on honoring his father’s legacy… not to mention a very wise move by someone who owns massive amounts of the stock himself.
Joey Agree, you see, has boldly tied his own personal fortune to that of his company. You’re going to be hard-pressed to find another REIT CEO who has put more money down the way he has.
SEC Form 4 filings confirm 24 separate open-market purchase transactions across his tenure, concentrated precisely at the moments of maximum fear.
He bought aggressively in October 2020 during the pandemic, with over $1 million deployed across two days…
Spent over $2 million more across seven transactions in 2023 as rising rates hammered the REIT sector and ADC traded as low as $53…
And he added another $500,000 in August 2025 and $249,000 in October, with zero open-market sales appearing anywhere in his filing history.
His father, now the executive chairman, has added his own unmistakable stamp of approval to Agree. He purchased $1.7 million shares in January 2026 while the stock traded at $70.67.
Unlike with the Ashford situation, this founding family isn’t playing games with shareholder value. It’s an active testimony that corporate governance is not a soft consideration, it’s a return driver.
So investors, never forget to know who runs the show in detail. What motivates you should motivate them as well. And if that’s not the case, don’t walk away.
Run.
Happy SWAN (sleep well at night) investing!
Regards,
Brad Thomas
Editor, Wide Moat Daily
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