Market Overview

Land & Buildings Issues Presentation Responding to QTS' Highly Concerning Misrepresentations and Distortions of the Facts


QTS' First Substantive Public Response to Land & Buildings' Critiques
Troublingly Leaves Investors with More Questions than Answers

Shareholders Should Not Only Consider the Credibility and Accuracy of
QTS' Claims, but also the Numerous Points the Company has Declined to

Urges Shareholders to vote WITHHOLD on Chairman and CEO Mr. Chad
Williams and Chair of the Compensation Committee Mr. William Grabe at
May 3, 2018 Annual Meeting

Land & Buildings Investment Management, LLC (together with its
affiliates, "Land & Buildings") announced today that it has issued a
presentation in response to the one filed by QTS Realty Trust (NYSE:QTS)
("QTS" or the "Company") after the market close on Friday, April 13th.
The complete presentation can be found at

Land & Buildings, an approximately 3% shareholder of QTS, intends to
withhold its votes for QTS Chairman and CEO Chad Williams and Chair of
the Compensation Committee William Grabe. Land & Buildings believes that
a clear message needs to be sent that the persistent and consistent
failures in corporate governance and compensation practices, and
substantial underperformance for QTS shareholders, simply cannot

Jonathan Litt, Founder and Chief Investment Officer of Land & Buildings,
stated: "We believe that the presentation issued late last Friday by QTS
is highly troubling. The misleading claims the Company made – and, just
as importantly, the facts they did not address – are quite telling. QTS'
response is the latest in a pattern of actions by the Company and its
Board of Directors to divert shareholders' attention away from the
manner in which Mr. Williams and the Board have created a culture of
self-enrichment with absolutely zero accountability – all at the expense
of the true owners of the Company. Shareholders need to send a clear
message that this behavior is unacceptable by withholding their votes
for Chairman and CEO Mr. Williams and Chair of the Compensation
Committee Mr. Grabe."

Consider the following "facts" presented in QTS' presentation:

  • QTS' Board wants investors to believe that Land & Buildings did not
    attempt to engage in constructive dialogue with the Company's Board.
    In reality, Land & Buildings requested a meeting with independent
    directors on March 9th, 2018 and the Board refused to have
    the meeting until just last week – nearly five weeks later, and only
    23 days before the Annual Meeting.
  • Mr. Williams and the Board want QTS investors to believe Williams
    lives "full-time" in Kansas, but he declares his Arizona home as his
    primary residence, and he owns homes in three states.
  • Mr. Williams and the Board want investors to believe that QTS' pre-IPO
    private equity sponsor's interests were aligned with those of common
    shareholders at the time of the IPO when approving the current
    horrible corporate governance practices that plague the Company. That
    same private equity sponsor has since liquidated its investment in
    QTS, yet, inexplicably, three of that firm's directors remain on the
    QTS Board. Who is their allegiance to – Mr. Williams or all QTS
  • QTS' Board wants investors to believe that it is perfectly acceptable
    for Mr. Williams to own the Company's headquarters building which, as
    they pointed out in their Friday presentation, includes data center
    space, which is precisely the business of QTS, and for the Company to
    pay Mr. Williams more than $1 million in annual rent for the building.
  • QTS' Board wants investors to believe that its forecasts for financial
    performance are reliable, despite its about-face on its strategy
    following its November 2017 investor day and a multitude of missed
    projections since its IPO, including EBITDA margins, return on
    invested capital, earnings growth, and revenue growth, among others.
  • QTS' Board wants investors to believe that it is appropriate to just
    ignore the past six months of shareholder returns, which represent the
    culmination of years of poor leadership, in our view, that recently
    came to a head.
  • QTS' Board wants investors to believe the Company's has made strong
    capital allocation decisions, while trying to downplay Carpathia, the
    single largest acquisition in the Company's history, which we believe
    will largely need to be written down.
  • Mr. Williams and the Board want investors to believe that management
    compensation is aligned with performance, despite compensation being
    discretionary, and despite the fact that compensation has risen even
    in the face shareholder total return underperformance relative to QTS'
    Data Center Peers1.
  • QTS wants investors to believe the Board does not need new
    perspectives despite the average tenure of its directors being more
    than 50% longer than the Company has been public.
  • Mr. Williams and the Board want investors to believe his dual-class
    super voting stock and interest in the Company's operating partnership
    are normal course of business and fair, but in fact they create
    significant conflicts of interest between Mr. Williams and common

Mr. Williams and the Board did not take issue with numerous alarming
facts shareholders must consider. The Company's presentation raises the
following questions:

  • What is the explanation for Mr. Williams' numerous related party
    transactions, including QTS chartering an aircraft owned by Williams
    for nearly a half million dollars in 2017?
  • What is the justification for the unearned award of stock options to
    Mr. Williams for "additional motivation" after the stock declined more
    than 35% in 2018?
  • Where is the explanation of the Compensation Committee's decision to
    make the March 2018 options award at a trough in the market price when
    the Board may have been in possession of material non-public
    information that would boost the stock just days after the award,
    including a critical capital raise and significant lease renewals?
  • Where is the justification for Mr. Williams' employment agreement
    requiring that the Company nominate him as Chairman of the Board, and
    stipulating that if the Company declines to do so Mr. Williams may
    walk away with more than $8.8 million?
  • What about the numerous missed financial targets since the IPO, which
    beg the question: why should investors believe Mr. Williams now?

Land & Buildings urges its fellow shareholders to WITHHOLD on
CEO and Chairman Mr. Chad Williams and Chair of the Compensation
Committee Mr. William Grabe at the QTS Realty Trust May 3, 2018
Annual Meeting.


Jonathan Litt
Founder & Chief Investment Officer
Land &


About Land & Buildings:

Land & Buildings is a registered investment manager specializing in
publicly traded real estate and real estate related securities. Land &
Buildings seeks to deliver attractive risk adjusted returns by
opportunistically investing in securities of global real estate and real
estate related companies, leveraging its investment professionals' deep
experience, research expertise and industry relationships.

This is NOT a solicitation of authority to vote your proxy. Land &
Buildings is not asking for your proxy card and will not accept proxy
cards if sent. Executed proxy cards should be returned according to the
Company's instructions.

1 Data Center Peers defined as the following REITs that own,
operate and develop data centers with a significant US
footprint: CyrusOne (NASDAQ:CONE), CoreSite (NYSE:COR), Digital Realty Trust (NYSE:DLR), and Equinix (NASDAQ:EQIX)

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