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Yet another sickening RMR move.

RMR is outside manager for numerous REITS, to include SIR, GOV, HPT, TA. They are lousy managers, with long term performance at every REIT they manage lagging way behind the performance of VNQ.
There are RMR officers and "independent" non-RMR directors on the Boards of these REITS, but the independent directors pretty much all sit on numerous RMR-controlled REITs. They know what side their bread is buttered on, and are captive to the RMR machine. There is no natural way for these REITs to right themselves and get rid of RMR based on Board of Directors action.

Awhile back a large shareholder forced a vote in CWH (now ECQ) that forced the removal of RMR. That was a difficult vote for the outsider to force. Nonetheless RMR clearly has been worried that another outsider might force more votes in more REITs to evict RMR. And they had good cause to fear this. A month ago, RMR candidates for reelection at HPT were voted down. So they resigned and were immediately reappointed. This has been a trademark RMR move. They had done it at CWH before. The directors at GOV had been reelected, but there was a significant no vote.

The goal of RMR first and foremost, and at every level, has been to keep themselves in power and expand their assets under management. They have had GOV buy 2 large blocks of SIR shares well above market price, and after purchase the price of SIR and GOV tanked. But these maneuvers did reduce the risk of someone kicking RMR out of SIR.

Now they have announced that four of the REITs managed by RMR have executed 20 year management contracts with RMR. If terminated earlier for poor performance, RMR is entitled to get the present value of 10 years' worth of management payments. So it becomes almost impossible for shareholders to dislodge RMR from management. It seems to me that this sort of maneuver should have been subject to shareholder vote, but no doubt RMR has determined they are okay to do this on simple board vote. It is inconceivable that an independent board would think it wise to put the REITs so much under the control of RMR, especially considering RMR's sub-par history of producing returns.

Oh, did I say that the management contract was announced? Actually the headline was that they will transfer a minority bunch of RMR shares to the REITs. This is meant to provide some assurance of RMR being aligned with the interest of REIT shareholders. In reality the REITS will get no benefit from this. The operators from RMR will continue to run the whole operation for their benefit, and the REITs will be minority shareholders in RMR with no one looking out for their positions. In reality the REITs probably would be better off if they had not purchased those RMR shares. Certainly would have saved the purchase price.

This is a sad day for corporate democracy.
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