STORE Capital’s new CEO Mary Fedewa is leading the net lease REIT to the next level.
STORE Capital Corp.’s (NYSE: STOR) new CEO Mary Fedewa believes the net lease REIT is at an inflection point. Having come through the pandemic with a proven business model, she is ready to take the company she co-founded a decade ago to the next level.
Fedewa was named CEO in April, following her promotion to president in 2020. She was appointed COO in 2017 and has served on STORE’s board of directors since 2016. She helped found the Scottsdale, Arizona-based company, whose name stands for Single Tenant Operational Real Estate, in 2011.
STORE owns spaces leased by businesses focused on the service sector. Tenants include daycare centers, movie theaters, fast-food restaurants, and car washes—the very segment hardest hit as customers stayed home throughout the pandemic. The REIT navigated the coronavirus crisis without seeing a dramatic drop in rental income or having to trim its dividend, which the company boasts has the highest growth rate among its net lease peers.
REIT magazine spoke with Fedewa about everything from building a multi-generational company to the importance of patience.
What was it like taking on STORE’s top job during the pandemic?
It’s been an exciting journey. As one of the founders of STORE, I’ve been helping build the company from the start. The pandemic has been tough for so many people, but it did serve as an opportunity for STORE to continue to prove out our unique business model. We were able to show how we help customers and were there for them in a tailored way during a really difficult time.
I believe there is light at the end of the tunnel and that we’ve largely come through the worst of the pandemic. I have a lot of faith in both our business model and our customers and it’s evidenced by how well our business has done.
What did you learn from this experience that you might not have otherwise?
From a business standpoint, the main thing that I learned is that we’ve built a really strong business here at STORE for long-term real estate financing and that we serve really vital industries and customers. We fill an important need in our economy and our customers really are resilient and vital to the U.S. middle market and the overall economy.
What I learned personally was that there is a very large human toll from this pandemic that should not be overlooked. Many people were challenged with job losses, health concerns for themselves and their loved ones, and education worries for their children. There is a much bigger aspect to the pandemic than just economic issues. It is a real event affecting humanity.
One positive takeaway is that I am in awe of how resilient we are as humans. People were able to reset and adapt quickly and persevere in a difficult time.
How do you think your previous service to the company will benefit you as CEO?
I’ve spent a lot of time building the team and platform here. I like to call this new chapter STORE 2.0 and I am excited by the opportunity to build a multi-generational company. My leadership style is all about being collaborative with the team and allowing others to shine. I liken it to being the conductor of the symphony—and I see myself as really that, being able to build the team, watch them grow, and produce really beautiful music and harmony together. I view my role as the ‘conductor’ as an honor and a gift. I am excited to watch this team really prosper.
I believe that STORE is at an inflection point because we have built a really great platform, which I was here for every step of the way. We have come through COVID with a validated business model and the triple net lease industry has prospered.
Now we have an opportunity to take that to the next level as there’s such a big market out there that we can really serve. I think that we can continue to scale this platform, and I, along with my team, are looking forward to helping many, many more customers.
What legacy does executive chairman, former CEO, and joint co-founder Chris Volk leave?
Chris was pivotal in helping to make very important foundational decisions when we started this company. We all carefully made decisions at the outset on how to build this company with the longevity of the business in mind for many generations to come. The stronger you build the foundation, the better you can thrive in all circumstances.
There aren’t a lot of other female REIT CEOs. Why is that, and what will you do to change this?
Great question. I don’t really know why there are not a lot of female CEOs in the REIT world, but what I can tell you is at our company we’re going to continue to focus on diversity and inclusiveness. We’re going to continue to cast a very wide net for qualified candidates in every position, and then we’re going to continue to cultivate leaders and get the very best leaders throughout the organization. We’re doing everything we can here to raise the next generation of leaders.
How would you describe your leadership style?
I’d say it’s inclusive, collaborative, energetic, and enthusiastic. I have a lot of trust in the team, but I hold people accountable. I believe it is all about giving people the opportunity to thrive and creating a learning environment where we all get to learn and grow.
What makes STORE different from other retail landlords?
STORE takes a very customer-centric approach. Our customers matter and it’s very important to us that we add value and that at the end of the day our customers are better off for doing business with us. We try to not make it about the actual transaction. We’re not a one and done transaction type of company. It’s about building a long-term relationship where we can be there for them as they continue to grow and prosper.
It’s also not about only helping them with the real estate, but also about helping them grow and generate new ideas for their businesses through our initiatives like the Inside Track Forum, STORE University, and our website resources.
We believe it is all about a holistic relationship and it’s important to us that we are adding value to our customers and positively contributing to the world. We focus and think a lot about our tenants’ customers and the employees they are giving jobs to and how we are part of creating those jobs.
There is plenty of discussion that e-commerce could mean the end of physical retail. What do you think of that notion?
E-commerce is just another channel for consumers to be able to get the goods and services that they want. However, most of our portfolio is concentrated in service industries such as childcare or veterinary services, which are hard to get over the internet. On the retail side, we’ve been focused on experiential retail where the brick and mortar is a need, not a want.
Most businesses are thinking omnichannel and want to have the ability to have somebody come into the store as well as get service over the internet. I do think that we will pick our spots, but for what we’re focused on, the internet is an important channel for our customers, in addition to their brick and mortar.
What is STORE doing right, and what needs to change?
I believe what STORE is doing right is our customer focus, our partnership mentality, and bringing repeat business.
What I would like to be different is for even more people to know about us and understand that STORE provides a really valuable service and have more people know and take advantage of what we offer.
Where do you see the company in three to five years?
The market is huge and therefore so is the opportunity. We estimate that 200,000 companies could use our real estate financing solutions. Right now, we have 522 customers. Therefore, the opportunity set is large.
According to financial filings from earlier this year, STORE’s marginal equity returns topped its peers. What specifically are you doing differently?
STORE is focused on adding value. It starts with the large marketplace, then it continues with being able to add value to the customer, and finally, being able to get paid for the value we add.
We’re very much focused on profitability and delivering high, risk adjusted returns for our investors based on our approach.
ESG is an important topic with investors. What are you doing in this space?
We’re doing a lot on ESG and it is very much top of mind. Our goal and mission is to leave the world a better place than when we started. We want the world to have sustainable resources and not deplete everything that’s out there.
We don’t operate the businesses, but we own the real estate. And we provide consent to do things on our properties, whether it’s solar panels, electric car chargers, replacing windows, efficient lights, etc. We are completely aligned with our customers to make their properties more sustainable. We also have plenty of active programs going on right now with our customers for sustainability initiatives.
What do you hope stakeholders take from your sustainability report?
We just published our second corporate responsibility report. The inaugural showcased our commitment to ESG and our excitement around it and the connection and partnership we have with our customers.
The second showcases even more some of the companies that are involved in sustainable ESG activities where we own the real estate. It addresses some of the EV and solar panel projects that we’re working on. The report gets deeper into the initiatives that we have and those that we will start. I want people to take away that we are really committed to making the world a better place, and we’re excited about our part in doing that.
What do you do for fun when you aren’t being a CEO?
I like to spend most of my time on meditating and yoga. I’m also golfing a lot these days. In general, I love to be outside in nature and enjoying my family.
What advice would you offer to college students who are thinking of a career in commercial real estate?
I’ve been in this business for a really long time—for over a couple of decades and it’s the most amazing business. If you are in the triple net lease space, it’s fun to watch how the businesses operate. You get to see so many businesses and focus on what they do really well.
What advice would you offer to your younger self?
Patience. Hang in there. The journey is unfolding as it should. It’s okay. If everything is good, it’s okay. If something didn’t work out just as you thought it should, it actually did. Trust your intuition.