This paper examines corporate governance provided by different types of institutional investors on REIT investment decisions and its impact on firm performance. First, we find that property-type Q (firm-specific stock valuation) positively affects REIT investment decisions and such effect is materially influenced by institutional ownerships. Second, we expand Hartzell, Sun, and Titman (2006), and find negative impacts of investments on future REIT performance. We argue that firms over-invest when they see stock prices in their particular sectors are over-valued, and over-investments subsequently depress firm value. We also find that the over-investment problem is mitigated by corporate governance and monitoring performed by institutional investors.