Sherry Rexroad, managing director of global REITs with BlackRock, joined REIT.com for a video interview at REITWorld 2013: NAREIT’s Annual Convention for All Things REIT at the San Francisco Marriott Marquis.
Rexroad discussed the factors that lead investors to invest in REITs outside of the United States.
“I think investors always look for diversification when they look globally,” she said. “That’s an age-old reason, and I think it continues. But I do think we see more and more people trying to go to other markets to look for higher growth rates. In the past, that’s been going to more emerging markets, but as we’ve seen emerging market growth ebb, I think there’s actually renewed interest in the United States, because we’re having a steady recovery.”
Rexroad was asked which geographic areas she feels most confident about.
“As I said, I feel very good about the United States,” she said. “The high earnings growth, combined with dividends growth, and the general economic outlook attracts investors. When you look abroad, I think in Japan, clearly we have a monetary policy that will continue to inflate asset prices. We also have structural reform in the economy and the corporate sector – those should continue to drive the Japanese markets.”
Rexroad also shared her opinion regarding whether the REIT approach to commercial real estate investment has fully taken hold around the globe.
“Yes and no,” she said. “Clearly we’re worlds apart from where we were 10 years ago. But that said, I think that there’s still implementation issues for the REIT structure globally. Until you resolve that, rolling out the interest globally to investors, you need them to be able to invest in their own countries - that’s where people tend to go first. So, in those countries where we still have external management, or tax rules that are disadvantageous for investors, you’re going to have barriers to those investors exploring REITs. We have had a quest for yield around the globe, which I think has heightened investors’ awareness of REITS, and drawn them into the sector. So, I think it’s made telling the story easier. It’s made education and outreach easier. But there’s still work to be done.”