04/14/2023 | by Nareit Staff
Sherry Rexroad

Sherry Rexroad was recently appointed to the board of directors at Aimco (NYSE: AIV), bringing more than 30 years of experience in REITs and real estate investment, finance, and capital markets to that role. She most recently served as CFO of STORE Capital Corp., and before that spent a decade at BlackRock Global Real Asset Securities as global head of business development, as well as co-global chief investment officer and chair of the investment committee. She was also the first investor to be elected to Nareit’s Advisory Board of Governors.

What do you see as some of the most important issues that boards need to get right today?

Balance sheet oversight, management of board refreshment (it’s hard to say goodbye to old friends but new ideas are needed),and maintaining true independence, which means comprehending the full picture versus what management is presenting. It requires a lot of focus and energy to fully understand everything from a company’s financials to its HR needs to its future strategy in a compressed amount of time. Boards can’t hesitate to ask questions and dive deeply.

How important is adaptability to professional development and what role has it played in your own career? 

I used to always counsel young people to put their careers in the path of growth. Now I add to it, be adaptable. It’s a key ingredient to staying relevant and thriving in a changing world. Being adaptable also prepares you to see trends as they are forming and gain first mover advantages.

For me, it was transitioning from U.S.-only REIT mandates to global in the late 1990s, incorporating ESG metrics into security selection in the mid-2010s before it was a client topic, incorporating infrastructure with real estate securities to make real asset products, also in the mid-2010s, and, finally, recognizing that maximizing STORE Capital Corp.’s value to shareholders meant selling the company that I had recently joined.

What do REITs need to be doing in order to weather the current volatile macroeconomic climate?

Batten down the hatches: make sure the balance sheet is secure, reevaluate growth plans that could stretch resources, e.g. development, and be on the lookout for opportunities created by distress/stress in the system.

Looking ahead, what are some key issues or trends that you are likely to be watching in the REIT and commercial real estate space?

What does the current banking crisis mean for small and regional bank lending for real estate? How will a possible lack of lending impact the CMBS loans coming due? If the labor market loosens, will the stickiness of work-from-home abate? Will this change the future of the U.S. office? 

Related to the office issue is what is the future of our gateway cities? How to manage homelessness and lack of affordable housing? How can these cities cope with a diminished tax base in the face of the massive underfunding in infrastructure (that was recognized for years before the pandemic).