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Principal Financial Officer – Something Has to Give

As more real estate firms go public the chief financial officer role becomes critical. But they need to know the industry.

By Tony LoPinto | Updated on January 25, 2011

Principal Financial Officer – Something Has to Give Last year a number of REIT IPOs did not get off the ground as the equity-capital markets were not ready to support the transition of many of the private real estate enterprises apiring to enter the public market. However, the tide is turning and a number of IPOs are lining up to take the plunge into the public arena. For most real estate entrepreneurs, the transition is a shock to their system and a difficult adjustment to the world of analysts, research, Sarbanes-Oxley, and quarterly reporting. In order to navigate in this new world, the chief financial officer is central to the IPO process and the ongoing business of being public. As “principal financial officer” a seasoned and experience public company CFO charts the course for the company in dealing with the analysts, and managing shareholder, institutional and retail investor relations. The catch is that the stock of candidates with the combination of public-company and real estate experience is skimpy, at best. I expect that as the REIT market expands we are going to see more CFOs from outside of the real estate industry. This is problematic for many executives who view industry knowledge as a critical component of the CFO job description.

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