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REALtalk - Conversations with Commercial Real Estate Leaders
29 minutes | Aug 23, 2021
REALtalk – with Brendan Wallace (Fifth Wall)
On this episode of REALtalk, Brendan Wallace, Co-Founder and Managing Partner at Fifth Wall, joins REALPAC CEO Michael Brooks to discuss the intersection of PropTech and innovation in the age of COVID-19 and beyond. The episode covers: The evolution of PropTech What the future of PropTech looks like in a post pandemic world The WeWork crash and its impact on real estate Fifth Wall’s $100 million Retail Fund Accelerating brands beyond brick-and-mortar expansion The online to offline trend How to move towards achievement of sustainability and climate goals within real estate About Brendan Wallace: Brendan Wallace is a Co-Founder and Managing Partner at Fifth Wall, where he guides the firm’s strategic vision. Prior to starting Fifth Wall, Brendan co-founded Identified, a workforce optimization data and analytics company that raised $33 million of venture funding and was acquired by Workday (NYSE: WKDY) in 2014. He also co-founded Cabify, the largest ridesharing service in Latin America, and has been an active investor, leading more than 60 angel investments including Bonobos, Dollar Shave Club, Lyft, SpaceX, Clutter, and Philz Coffee. Podcast transcript: Michael Brooks (REALPAC): Hello, everyone, thanks for listening and welcome to REALtalk, the show that brings you unique insights from leaders in Canadian and international commercial real estate. I’m Michael Brooks, CEO of REALPAC. Our guest today is Brandon Wallace of Fifth Wall, who will be talking with us about the intersection of PropTech and Innovation in the era of Covid. Brandon is a co-founder and managing partner at Fifth Wall, which is the largest venture capital firm focused on the global real estate industry and property technology for the built world. It connects the world’s largest and most influential owners, developers and operators, redefining how the world interacts with its physical environment. Prior to starting Fifth Wall, Brendan co-founded Identified with a capital “I” – a workforce optimization data and analytics company, as well as co-founded Cabify, the largest ridesharing service in Latin America. So a very entrepreneurial, technological and future thinking mindset. Welcome, Brendan. Brendan Wallace (Fifth Wall): Thank you so much for having me. Michael Brooks (REALPAC): All right, let’s get to the discussion. Brendan, it seems like long ago we started hearing about PropTech, and a lot of us started attending conferences with panels of startups. It’s got to go back to 2017-2018-2019. Maybe that was PropTech 1.0 in your world, but it was it was almost a must have session at every real estate conference. And we heard about many great early successes, VCs, Airbnb, Convene, Honest Buildings and many others. And I think actually that many Canadian companies were early investors in some of those. Then we had a WeWork crash and probably all of our attention’s diverted away by the pandemic. Where do you think we are now? And what’s the way forward in PropTech following the end of the pandemic? Is it back on like it never left it? Will it be somehow different? How do you see this market now? Brendan Wallace (Fifth Wall): Yeah, I think PropTech, just as a category, has matured enormously. And I agree with much of what you said in terms of just like the history of PropTech, there was kind of something around 2015 – 2016, which was kind of like a age of enlightenment moment for the real estate industry, where owner operator, developers of real estate who previously never really had any clear or discernible point of view on technology, recognized they needed to. And I know that sounds like something that is obvious. Of course they should have. You have to contextualize this in the real the context of the real estate industry, the real estate industry as an industry which is the lowest spender of any major industry on it. The real estate industry is probably the biggest tech laggard, major industry. And it’s also an enormous industry in the US. It’s 13% of US GDP. It’s the largest asset class, the largest lending category. And basically that whole industry missed the entire Internet and all of mobile. And then around 2015 – 2016, this light bulb went off. And so the demand for tech was voracious. And you had this kind of leapfrog effect where you went from analog solutions, you know, Excel models or literally spreadsheets and kind of pen and paper to fully mobile cloud enabled data and analytics and powered software. Brendan Wallace (Fifth Wall): And so demand was voracious and it spawned a lot of enterprise value creation over really the period from when Fifth Wall started, like 2016 until 2020, pre pandemic. With that said, I think one of the things that the real estate industry never fully embraced was that, you know, tech is not decorative, meaning it’s core to the business of owning or operating real estate at a operations level. But it’s also pretty core to informing which kinds of real estate assets you should buy, meaning technological trends, as well as sociological and demographic trends to inform asset class and geography. But I don’t think most real estate owners truly got that so prepend. I would still describe PropTech as kind of somewhat theatrical in some cases for real estate firms. I’d say they’re starting incubators or doing one off deals, but it wasn’t the core part of their business. So it was it was just gestating that real estate needed to be this core. I think what the pandemic did is it really highlighted for thoughtful, self-aware real estate owners that tech is not decorative, it’s not theatrical. It doesn’t need to be the small incubator program. It needs to be at the core of owning and operating. Brendan Wallace (Fifth Wall): Real estate is actually at the core of being a real estate company. And I think that’s partially because a lot of the assumptions that have kind of girded the real estate industry and allowed it to ignore the onset of technology in every other industry were questioned. The kind of anchor of those assumptions was questioned when we don’t know if people are going to return to. In any form like they did pre pandemic, we really don’t know how oversupplied retail we are, we might have thought we had an understanding of it, but clearly we don’t. And I think we’re about to see that we clearly did not anticipate the demand for industrial real estate and data centers. We clearly did not anticipate the demographic reshuffling that has been affected by this kind of work from home or work remote dynamic. And so all of those existential questions are now colliding with the real estate industry. And I think tech is it provides tailwinds to all technology, the PropTech in particular. So I think what you’re seeing right now is a maturation of product from being somewhat decorative and theatrical in terms of how real estate companies engage with it to be existential and core to their businesses. Michael Brooks (REALPAC): I think they’re you think they’re a certain kind of buckets. When I think back to the early days and there were platforms for use of your boardroom, platforms for use of your house, Airbnb, and then there was stuff that would help you operationally like leasing platforms. And it seems like that was so different than the dotcom boom bust of 2000 – 2001 where everybody talked about disintermediation. It’s like no one really got disintermediated on this one. But everybody’s business model could be enhanced by technology. Do you think of it in terms of major buckets of innovation that we’re the first generation? Brendan Wallace (Fifth Wall): You know, I understand what you’re saying and I think we’re just at different stages across different asset classes. So the kind of disintermediation dynamic you’re talking about is kind of one the OTAs cropped up and Hilton and Marriott basically were disintermediated from their end customers by the price lines and the expedients. And obviously those companies have gone on to create enormous amounts of enterprise value and price transparency, none of which is actually good for the underlying hotel industry. And I think we saw permutations of that in office. You can kind of think of we work as, frankly, being just a decent mediator for this kind of SMB, more granular tenant base. Airbnb was kind of the same thing in a different way, just kind of almost re-enfranchising a certain asset class, in this case residential, as actually being hospitality. Right alongside that, you’ve also seen enormous growth of enablement technology, which is like the voices of the world that are just simply rendering more friction, less the process of leasing space or buying space or financing space in the business of doing real estate. So this kind of technology enablement, I think the other major buckets that we think are really exciting is just financial service innovation. So real estate capital markets are the largest capital markets on Earth and they’re probably some of the most antiquated financial markets on Earth. And so a lot of what you’re seeing now is like real fintech innovation on the consumer side. So the process of buying a home, getting title insurance, getting a mortgage, getting home insurance, notarizing the asset, discovering the assets, selling the assets, all of those processes have now seen real tech enabled solutions emerge, which I think have added more transparency and enhanced the home buying and selling experience in the US. Brendan Wallace (Fifth Wall): We haven’t yet seen that collide with commercial real estate, but we’re about to call that just technologies to make more frictionless the operations of real estate capital markets. But the last bucket that I think is surprising to a lot of people is that the line there’s kind of a hard line drawn between what is a real estate company and what is a tech company. And that line is getting pretty blurry right now. It actually has been blurry for quite some time. I just don’t think the real estate industry recognized that. So if you look at, for example, industries like cold storage, cold storage is in operations in a tech business that that is fundamentally what it is. But it’s now characterized as a real estate company. Same thing with data center, same thing with cell towers. So at one point those were tech companies. Now they’re characterized and structured like real estate companies. And so a lot of the business model innovation that we’re seeing today, which we kind of call tech enabled real estate, which is like living coworking on demand self-storage. And a lot of these businesses are actually real estate businesses. And the real estate industry is doing what most incumbent industries do for quite some time. They deny that it’s a competitor. They say it’s a different product until it’s very obvious that it isn’t. And I think you’re going to start to see companies that are like in the Fifth Wall portfolio that we’re investing in, out of a venture capital fund, competing directly with many of the large real estate incumbents. So that’s a whole other theme where that line between real estate and tech gets quite murky and quite blurry. Michael Brooks (REALPAC): It’s really exciting and really interesting, and I just spent this morning scrubbing fax clauses out of some contracts that we’re working on and there’s still some doctor’s office where you have to fax in data on your blood work and whatever. So, boy, still a long way to go in some sectors. Let’s talk about for a moment your 125 million dollar retail fund. As I understand it, that fund seeks to invest in emerging brands and retail concepts to accelerate brick and mortar expansion. So this is maybe consistent with your theme of tech merging with real estate now early in the pandemic, because we saw it on the valuations and on our on this meeting today, there’ll be a lot of people in the public markets who saw their valuations drop like a stone in the retail sector. But starting to come back now. What’s the vision for this fund and how will it be impacted by the Amazons of the world? Brendan Wallace (Fifth Wall): So it’s a great question. And I think it’s a fund that is adjacent to our tech strategy. But, you know, retail is this really embattled sector of real estate. I think the death of retail is something that we read about in the papers and in the press constantly. And it’s an interesting dynamic because, you know, in the US, about 90 percent of all consumer commerce takes place offline. And actually consumers are buying more stuff than ever before. But for some reason, retail is dying. So there’s this kind of disconnect and like this macro trend and what’s actually happening in retail, real estate. And I think what’s happening is that a lot of the incumbent retailers, the big box retailers, as everyone has been reading about over the last five years, they struggled, they got overstored, they got over levered, and they are in turn going back up and they’re disappearing. But no one’s talking about is that in their wake, there’s a lot of new emerging challenger brands that are being built online and offline and what is today called omnichannel. Most of these brands actually start building a consumer identity and building a product, distributing that product online. What they quickly discover is that 10 percent of commerce, which is online, is not enough to build a big business. So they have to go offline and become omnichannel. But the challenge is that because they’ve always been native digitally, they don’t know how to. So he said, can we build a fund that would engage with the largest owners of retail real estate who want to attract these emerging clients and want to attract them to their centers and help these brands go offline for the first time? Because the challenge today, let’s say you own a mall. Brendan Wallace (Fifth Wall): It used to be that you could probably have two hundred conversations with the two hundred largest retailers and fill that entire mall today. That doesn’t work. You’d fill probably a third to half of the mall. This is a question of how do you feel the other half and the other half is now filled by thousands, soon to be tens of thousands of brands. So the granularity has gapped out as consumer choice is tapped out. And so the problem is it turns the real estate owner into something like a venture investor, because if you’re a retail landlord and you’re signing a five year lease with an early stage venture backed business that’s out of money in one year, you are taking venture risk. You’re just not getting compensated for it. So we built a fund to kind of bridge that and say, can we actually invest in an equity level in these new emerging tenants, these younger businesses, higher risk, oftentimes cash flow, negative businesses that are growing and kind of recharacterizing what the future of the brick and mortar retail will look like. And so this is everything from consumer products companies to food and beverage to fitness, to wellness, to health care. But they all really have a kind of omnichannel component, which is they’re both online and offline and existing incumbent retail landlords are struggling to access them. So that fund invests in that thesis. And we’ve made probably 20 investments in and around that thesis. Michael Brooks (REALPAC): It’s fascinating. When you said venture risk and you started to talk, you started to describe this about owners becoming de facto venture capitalists. I thought about the early days of we work and there always are almost like two solitudes in the office owner market. There were those landlords who were prepared to take a risk on a we work covenant, which was often a single purpose company, no guarantee of the parent. So there you were in a situation where maybe it was perceived as a high risk. Some wouldn’t do the least because there was no parent guarantee with any substance behind it. Some did. Recognizing that this is a trend and let’s just ride this and maybe we got some empty space is not doing anything anyway, so let’s go with it. So I mean, for some that worked out well, others, of course, maybe got caught by we demise. But there are other more successful examples. What about risk for the retail landlord? And is this really what the role is? At Fifth Wall, you’re curating what you believe to be successful retail startups for them through this fund? Have I got that right? Brendan Wallace (Fifth Wall): That’s exactly right. And I think the WeWork example was really apt because I’ll draw the parallel to retail. WeWork example: I mean, the real estate industry, I don’t have a lot of sympathy for people that are having leases rejected by WeWork because they knew any dynamic where you have capped fixed upside in the form of your lease, but unlimited downside, which if you didn’t understand that, that is a very good chance this company will disappear and will then therefore reject your lease and you’ll have nothing. If you didn’t understand that dynamic, honestly, you shouldn’t be in the real estate business. So I have to believe every real estate owner went into that with their eyes wide open and they were just on the wrong side of a trade. Now, in retail, I think what happens is the same dynamic. You appropriately noted it, which is a lot of these brands that are opening stores won’t survive or won’t become big. So you have existential risk at the brand level. They also have existential risk at the center level, meaning it is also possible that the malls, they’re leasing space and become dead malls, or dead retail streets. So the question is actually one of how do you align interests? So you have downside protection if unlimited down, you have no downside protection of unlimited downside. Brendan Wallace (Fifth Wall): But how do you create that alignment on the upside? And I think that comes through a construct which we haven’t leaned enough into in the retail industry, which is % rent. So % rent is a way of capturing the sales activity, the cash register activity inside a store. It’s a way of aligning the incentive between the landlord and the tenant. But if you think about what % rent is, it’s just effectively atomized equity in the brand. It is done at a very kind of micro level. And the reality is for many of these brands, the performance of that store is critical. It’s existential in terms of their risk. And the performance of that brand in the mall is also existential. If you don’t have shoppers coming to your mall or coming to your center, come into your street because they don’t care about any of the brands. That’s also existential. So really, what investing in an equity level into these brands is, is just the next logical extension of that. It’s just saying, well, the clearest way to align incentives is to actually invest in the success of these businesses. You can do that in % rent and you have kind of this atomized, very specific, very idiosyncratic synthetic equity instrument around a store. You don’t have it across the entire brand. And for the brands, what they like is that it kind of aligns their interests with the landlords. They don’t have to beat each other, debate each other over a fixed rent. They know their margins. They can identify a percent rent level. That makes sense. So the natural or kind of logical extension of this is that retail landlords and certainly the kind of command and control retail landlords, the owners of centers and strip malls and kind of the owners that control entire districts, whether they like it or not, their venture capitalists. And very soon they’re going to realize that venture capitalists. And so the problem is they’re not very good venture capitalists. They’re leasing team. They’re not great venture capitalists. So how do you bridge that gap between leasing expertise, which is underwriting spaces and sometimes, you know, the duration of different brands and how that drives center activity and center for traffic and center sales with actual equity investments? And that’s what a retail fund does. We say where that bridge we helped drive that alignment by actually enabling you to take an equity position in those emerging retail concepts. Michael Brooks (REALPAC): It’s a fascinating approach. And I mean, two thoughts came to mind. One is, of course, the owners will say, well, I can’t finance % rent only leases and that’ll be a barrier to me in their malls. But the second thing I’m thinking, Brandon, is that a lot of the asset managers and you talked about people who manage, they don’t have the insight into the digital world to appreciate what has legs and what doesn’t. So I’m thinking of, OK, how are people going to do disintermediate Fifth Wall? And unless they have the knowledge of who the winners and losers are, and that’s almost another staff position for a lot of these owners, I would think. Brendan Wallace (Fifth Wall): Yeah, I mean, it’s the struggle of, you know, and this is not just true of retail brands. It’s also true PropTech itself. I mean, real estate owners make terrible venture investors. I mean, in some ways, Fifth Wall is we are entire success as an explanation of that reality that the best venture investors, the best people that are investing in operating businesses do not work with real estate companies and they never will. And that’s kind of a challenge for real estate companies, because whether they like it or not, they’re taking those kind of risks increasingly in whether the same thing that we’re seeing in retail. You’re also seeing an industrial you’re seeing it office of the same dynamics are afoot in some way, shape or form in every industry, and so the problem is, as the business of being a real estate owner starts to look and actually operate a lot more like a venture capital firm taking venture capital like risk, having to make venture capital like due diligence and underwriting decisions. How do they do that? And that’s really where I think Fifth Wall has emerged and positioned itself and said, you know, we’re going to step in, we’re going to hire the best in class investors. We’re going to internalize the priorities and the needs of these large real estate owners. And we’re going to invest in what we think are best in class businesses that can grow in scale. And I think if you look at a fifth of those investments out of our retail fund, you look at a lot of the emerging leases that mall owners lease space to. They look a lot different, meaning the business of investing in high risk businesses is not easy and it’s very difficult. Being a venture capitalist is very difficult. And so it’s a challenge. And I think some real estate owners have appreciated that, but not all of them have. Michael Brooks (REALPAC): It’s a good point. And I can remember discussions with some of the early investors in Fifth Wall and others who whose motivation was they wanted a window. They wanted a window into that world. And this was one way for them to understand who’s out there. What have they got to offer? How does it work? Could I use it in my business and have an informed intermediary like you to help interpret back and forth? So it makes a lot of sense to me. Let me pivot to the to the most recent one, the Climate Tech Fund. And I think you you’ve had a new Canadian investor in in that particular fund. What’s the thought behind the climate tech fund? What are you going after and how do you think you can bridge the gap that we have in emissions reductions for building? I’m assuming that there’s a tech solution in there. Brendan Wallace (Fifth Wall): Yeah, I mean, in some ways, you just you said the thesis. It’s that the real estate industry is 13% of the US economy. It’s 40% of US CO2 emissions. So the real estate industry is the single most culpable or responsible industry in the climate crisis. And historically, for some reason, the real estate has kind of skirted the spotlight. I don’t think most people intuitively would say, yeah, the real estate industry’s most responsible for the climate crisis. But by the way, all the technocrats, all the scientists, they all know this. But now the public is understanding this. And so the public is turning its attention to the real estate industry because they understand how profound the carbon impact on an embodied level in an asset, but also on an operating level, how profound the real estate industry’s contribution to the crisis is. So that kind of reality dawned on me a few years ago as we were working at Fifth Wall. And then I would talk to real estate companies. I was like, what are you doing to mitigate this? And you’d hear lots of things about awards and Energy Star and LEED certification. But I got I got a weird sense meaning I had one of those. You can just tell someone’s kind of buzzing you. I got it from everyone. And I was just like, I just don’t think this is really the answer is like, you know, getting an Energy Star certification. Brendan Wallace (Fifth Wall): So we hired someone on our team that understood climate tech. And as he began evaluating this, he was like, you know, even with the best technology and owner of an asset today, even a modern building, if they wanted to deploy all the best technology that they could to mitigate their operational carbon footprint, they’d only get about 50% of the way there. So 40% of real estate industry emissions go to 20% – still massive. And assume that, OK, this is a massive technical gap there. How do we close the other 50%? You’d expect the real estate industry to be invested into the science, the material science, the alternative energy science to mitigate that. But they’re not actually no one in the industry is. And what I think that creates is an opportunity for really forward looking real estate owners to invest against that and reposition their businesses, both from a branding perspective to say, look, we’re contributing to the science that will help decarbonize and mitigate our industry’s contribution to the crisis. But secondly, we actually think this is going to give us a competitive edge, because at the same time this is happening, the public is kind of recognizing this. Tenants are recognizing it like the largest corporate tenants now have carbon neutrality laws and carbon neutrality aspirations that basically. Prohibit them from leasing space from energy pig owners, and so that’s going to be an inflection point. Brendan Wallace (Fifth Wall): And regulators now are coming to tax the real estate industry. So these local carbon neutrality laws like what happened in New York and what happened in Los Angeles is going to happen all across the US. And so real estate owners generally are kind of caught pretty flat footed. And when you look at the industry, you’re like, OK, for an industry that contributes to the climate crisis, whereas it’s like Elon Musk wears like the person that is kind of like rebuilding the industry, revisioning it with a carbon zero future. And I just didn’t see that. And so the view we always take is how do we then help real estate owners who are not that become that by encouraging them and enabling them to proactively invest in the science, invest in R&D, investing climate tax to help mitigate their carbon footprint? That’s exactly what the fund does. Yes, Ivanhoe Cambridge from Canada made a very significant investment at that fund. And we have a number of other large international pensions that are coming into that fund. And actually a large number of US REITs and private real estate companies and financial investors. So that fund, I imagine, will be probably one of the most heavily subscribed funds we’ve had because, you know, the real estate industry’s climate problem is only getting worse by the day. Michael Brooks (REALPAC): Yeah, it’s fascinating, it reminds me of the early days of green buildings when tenants would say, I want a green building, but I’m not going to pay a nickel more in rent for it. And there was a bit of a standoff for a little while until owners realized that the risk to them was building obsolescence, not getting the nickel more in rent. And so a pivot had to happen. And what you’re talking about is another debate coming up. Brandon, look, we’re almost out of time here. It’s been a fascinating discussion and frankly, could go for another half an hour. It’s very inspiring to hear from you, all of these conversations. And we look forward to continuing to hear about your success in this specific space, particularly the ESG and low emission, low emission economy is top of mind for us as well as an association, and I’m sure many of my sister associations around the world. So thank you so much for coming today and for being on this with us. Brendan Wallace (Fifth Wall): Thank you so much for having me. Michael Brooks (REALPAC): Well, this is Michael Brooks and that’s it for this week’s episode of REALtalk. Be sure to visit us at realpac.ca/realtalk and subscribe wherever you get your favorite podcasts. If you have an idea for a topic or a guest, please send me an email at firstname.lastname@example.org. And if you like what you hear, give us a 5-star rating. Thank you for listening and tune in next time.
27 minutes | Jul 27, 2021
REALtalk – with Bill Ferguson (Ferguson Partners)
On this episode of REALtalk, Bill Ferguson, Chairman and CEO of Ferguson Partners, joins REALPAC COO Carolyn Lane to discuss rising to the leadership challenge, the characteristics of great leaders, and what the future of leadership looks like. The episode covers: Bill’s new book: The Test is Now Upon Us Skills of leaders in real estate vs other industries Traits and attributes of what make great leaders Generational differences between leadership styles Factoring leadership into a company’s succession planning Mistakes made by leaders, especially during crises How great leaders responded to covid-19 How leaders will have to lead differently in the future About Bill Ferguson: William J. Ferguson serves as Chairman and CEO of Ferguson Partners. Mr. Ferguson conducts senior management recruiting assignments, with a specialization in president/Chief Executive Officer searches and recruiting assignments for Boards of Trustees/Directors. He also conducts CEO succession planning assignments and facilitates public company Board assessments and senior management assessments.. Podcast transcript: Michael Brooks (REALPAC): Hello, everyone, thanks for listening and welcome to REALtalk, the show that brings you unique insights from leaders in Canadian and international commercial real estate. I’m Michael Brooks, CEO of REALPAC. Carolyn Lane (REALPAC): Thanks very much, Michael. My name is Carolyn Lane and I’m CEO of REALPAC and I’m here in Toronto. Joining me today in Chicago is Bill Ferguson, Chairman and CEO of Ferguson Partners. I had the privilege of knowing Bill for over ten years and of working closely with him and his team at Ferguson Partners to deliver our highly regarded annual Canadian Real Estate Compensation Survey, our Sentiment Survey and several other thought pieces. Bill regularly conducts senior management recruiting assignments with a specialization in president, CEO and board searches. He also conducts the succession planning assignments and facilitates public company board assessments and senior management assessments. Bill holds a bachelor’s degree from Harvard University, where he was a member of Phi Beta Kappa and an MBA in marketing from the Wharton Graduate School of Business. Welcome, Bill. Bill Ferguson (Ferguson Partners): Carolyn, thank you very much. Appreciate the opportunity and very much appreciate in value our partnership with REALPAC. Carolyn Lane (REALPAC): Thank you. Likewise. So Bill, let’s get right to it. In 2012 you wrote and REALPAC published the book titled Market Discipline: The Competitive Advantage – Lessons from Canada’s Real Estate Leaders. At that time, you conducted one on one interviews with some of the most notable people in the Canadian commercial real estate industry. Now, I don’t know where you find the time, but you’ve just released a new book focused on leaders in the US titled The Test is Now Upon Us with a focus on the defining qualities of leadership through crisis. So you looked at the real estate industry and a number of other industries in that book, and I’m just curious what compelled you to take on another book and what were the drivers behind prompting you to write it? Bill Ferguson (Ferguson Partners): Well, once again, Carolyn, thank you for the thank you for the opportunity. My most recent book, The Test is Now Upon Us is my fifth book and probably my capstone book about leadership in the industry. And it is my first kind of global look at leadership, both leadership in the industry, which we broadly defined as real assets, hospitality and health care services, and comparing the leadership skills of the great leaders in the sectors we serve versus leaders in other sectors. So we included leaders in other business sectors. We looked at leaders in government, we looked at leaders in the military and even leaders in science. So we tried to look at leaders across all generations and we tried to identify the leadership traits which made them successful. And then we tried to tie those leadership traits in alignment alongside of leaders in our industry. And let me start by kind of talking about something which a lot of people don’t realize, and that’s that the real estate industry, I think, in the United States, in North America and in the world is the largest industry of any across all industries. And what drives the size of the business, clearly in the states and beyond is inclusion in the single family business. So whether that’s the residential mortgage business, the homebuilding business, a business today, which is very much on fire, which is the single family home rental business, but when you include the commercial and the residential business, the real estate industry is the largest industry in the world. Bill Ferguson (Ferguson Partners): So it’s been a fascinating incubator. When I when I look back, having started my career 40 years ago, there’s been a metamorphosis running from basically firms that were regional to global, private to public and entrepreneurial, institutional. And so it’s been a fascinating incubator, especially since most people in our industry start as entrepreneurial dealmakers at a very small proportion of those people ultimately rise to the CEO spot, whether it’s a Bruce Flatt at Brookfield, a John Gray at Blackstone or whoever it might be. It’s an extraordinarily small number of people who really have the skill set to start as a dealmaker and ultimately to become a CEO. And then the last point I would make is we’re at a very interesting time right now because you have a tremendous amount of generational change, transition from one leadership group, typically the baby boomers into the next generation of leadership. So studying leadership traits and attributes I think is very important as succession committees of boards and others really try to assess that next generation of leadership and appoint a new CEO. Carolyn Lane (REALPAC): So I’m curious to know how leaders in the commercial real estate industry are similar or different from the global leaders that you interviewed across other businesses like government and military politics and art and science. And can you touch on any of the generational differences? Bill Ferguson (Ferguson Partners): Absolutely. Well, first of all, I wouldn’t speak for Canada, but I will speak for the US. Is that our industry, meaning the real estate industry, probably more on the commercial side has had a little bit of an inferiority complex in the sense that everybody viewed people, the great deal makers, but really, were they really good leaders? And amazingly enough, as I studied the great leaders in the industry, whether it might have been a Bruce Flatt, for instance, at Brookfield or a John Gray at Blackstone or Hamid Moghadam who runs Prologis, which is, if not the largest one of the largest rates tied in the logistics space. Bill Marriott, who ran Marriott Corporation for number of years and on and on, the leaders in our industry actually fared very well and quite honestly had many of the leadership attributes that we found common outside the industry. So really no reason to have any kind of inferiority complex. The leaders in our business have stepped up and have stood nicely on their own and have stood the test of time for sure. Carolyn Lane (REALPAC): Are there any generational differences between the leadership styles? Bill Ferguson (Ferguson Partners): Well, I think I think what you find, Carolyn, is that all these companies continue to grow. And so the issue of growth and of managing through crisis, which is what we’re doing right now with the pandemic, really test leaders probably more than they’ve ever been tested. So the next generation of leadership, some of whom have stepped into the role today, including John Gray and Bruce Flatt and others, have had, I think, more of a challenge just given the scope of the businesses that are running the complexity of these global businesses. And you overlay that with a crisis like a pandemic. And to some degree, you’ve got a perfect storm. And so they have, I think, been required to step up and really to exhibit leadership skills probably above and beyond to some degree, what my generation has experienced anyway. Carolyn Lane (REALPAC): Right. So what are some of the common leadership traits highlighted in the book and how should they factor into the company’s succession planning approach? Bill Ferguson (Ferguson Partners): Well, I think to answer the second question first, Carolyn, I think it’s very important for the next generation of leadership to be assessed around these attributes. And what’s interesting is when you when you really pull back the onion and study these leaders, it is all about the people. It’s about hiring the right people, developing the right people and empowering them for sure. And in our industry, historically, everybody’s attributed leadership to people who can buy assets at the right point in the cycle for sure. But when you really study why these leaders are great leaders, it does come back to their ability to really leverage their IQ. So I’ll cover a couple of leadership attributes that I feel really stood out and we can discuss them as as appropriate. But the first leadership attribute, which is common among both leaders I studied in the industry and outside, is this whole issue of integrity. And I would say John Gray at Blackstone is pretty much the epitome of this issue of integrity. And it’s interesting because it comes right after the post Trump presidency for sure. But one thing that John Gray echoes time and time again is the golden rule. He treats people as he wants to be treated, whether it’s people he’s doing business with, whether it’s his partners, whether it’s regional, state, federal government, whether it’s his people. He treats everybody with honesty, with forthrightness. And it’s not a question of being nice necessarily, but it’s really a question of being honest and candid and supportive, I think, for sure. Bill Ferguson (Ferguson Partners): So clearly, this issue of integrity permeates everything that John does and most of the great leaders do for sure. The second attribute, which I think is noteworthy is, is this is this issue around passion. If you study Bill Marriott, for instance, Bill, when he was CEO of Marriott, literally would go out and visit hundreds of properties and he wouldn’t pull the sneak attack and he wouldn’t go up to his people and say, well, why aren’t you making the beds right, whatever. But he would go and listen to the customers and he would try to understand what they were thinking about what was working and what wasn’t. And as a result, to try to be supportive of his people who try to say, you know, these are the types of things we’re doing well and these are the types of things we should be thinking about in the future. But he had a passion for the business. He woke up every morning. Was excited by it and literally walked the walk the assets, and that’s something that I found pretty much across everybody I interviewed and studied, whether they be in real estate or outside of real estate. They had the passion for sure. I would say the next trade that was common was this whole issue of innovation. And when you look at a Stuart Miller, for instance, who’s running the biggest homebuilding company in the US in our homes, or Bob Johnson, who in essence kind of started Black Entertainment Network, I mean, who ever would have thought that there would be a channel dedicated to black entertainment? And Bob took it on and really built it to a significant business and so forth. Bill Ferguson (Ferguson Partners): And so this issue of innovation, of learning, on asking the question, why was another attribute that we found typical among leaders both inside and outside of our industry? And I would say the last one, Carolyn, and it’s based on is this issue of leaders being independent thinkers almost to the point of being controversial. And probably the most controversial leader that we have here in the United States is Sam Zell, who founded Equity Office, Equity Residential, Equity Lifestyle Equity International. I mean, Sam was behind the securitization wave that now led us to have over 150-200 REITs. He was the one who thought about taking these private companies public and really allowing them to have strong balance sheets and allowing institutional investors to be owners. His affectionate nickname is The Grave Dancer. And what Sam is famous for is buying assets at the right point in the cycle, at the right price and really adding value and writing them up the curve. And that’s exactly what he did a number of times. So this idea of being an independent thinker, of bordering on being controversial, this is what leaders are paid to do. And the great leaders clearly have that as a very important attribute as well. Carolyn Lane (REALPAC): Fantastic. So passion, integrity, innovation, independent, controversial thinking are all great attributes. I’d add humility and generosity, which is right behind you there. So what was the most surprising takeaway from your leadership research? Is there a mistake that leaders typically make when leading their people, especially during crises? Bill Ferguson (Ferguson Partners): Yeah, you know what was interesting? It surprised me, to be frank, was this whole focus on EQ. It was all about the people that really are in your organization and are really making a contribution. I didn’t think for a minute that it would be as pervasive across all the leaders we interviewed, across the sectors that we serve. This whole idea of once again identifying people, the right people, recruiting them, developing them and ultimately empowering them for sure. I mean, all these leaders, you can tell we’re never too far away from their businesses. They knew the details, but you know what? They never micromanaged. And that’s really an art that a lot of leaders can kind of pursue because they unfortunately jump into the REIT micromanagement side of things, which a lot of entrepreneurs do. And that’s why they don’t grow out of building a company only to a certain size for sure. The mistake that I found a lot of leaders made, and it was both in our industry and outside our industry, is thinking too short term, whether it’s a quarter to quarter public company performance or whatever it is. I mean, the leaders that I interviewed clearly took their time. They were strategic and they understood they needed to invest in businesses to grow. And if the businesses did return the kind of financial performance during the first quarter, the first two quarters the entire year, as long as they were laying the groundwork for a great company, that’s what they really focused on. And I think too many short sighted leaders really don’t invest for the long term and as a result, don’t build a sustainable business. Now. Carolyn Lane (REALPAC): Good point. So how did the truly great leaders respond during covid-19 around such things like mental health or managing culture and their business execution and communication? And more importantly, how are leaders going to have to lead differently in the future? Are they going to have to lead differently in the future? And if so, how? Bill Ferguson (Ferguson Partners): Good question. Which is really the test is upon us is all about how leaders respond to crises. And in this case, it was the crisis, the pandemic. What I saw among the great leaders is we, in essence, have gone through now 16 months of the pandemic is that they really focused on their people and the health of their people. And it was all about both physical health and mental health. We’ve gone through extraordinarily stressful time and unfortunately, we just haven’t been able to interact. And there are situations all over the world that we’ve had with our people where you’ve got a dual career couple both trying to do everything they can remotely. And then you may have kids at home and kids who are not going to school. And all of the challenges that that home life and work life intersection have cost, to be frank. And so I found that the great leaders have kind of taken a step back and at least for the first nine months of the pandemic, we’re totally focused on how do we take care of our people, in essence, and try to give them the support and the flexibility they need not only to help us run the businesses, but also to, in essence, got to keep their families as a common unit and really think about how they nurture their families in a time of tremendous stress, because it was new to all of us for sure. And I think the other thing, great thing that leaders did was that they focused on ways to enhance communication and technology, I think stepped up and played a very key and important role in allowing CEOs to, in essence, try to run their businesses. Bill Ferguson (Ferguson Partners): And I’ll take our companies as a case in point. And this is the credit’s due to the people around me. It’s not due to me. But I can honestly tell you, Carolyn, after 16 months of the pandemic, that we are closer as a leadership team than we’ve ever been before. And that’s due to people around me like Gemma Burgess and are the regional leaders around the world. Be mindful of the fact that we’ve got 11 offices around the world. 120 people, very, very difficult to keep that unit tightly knit. And Gemma did wonderful things. And the rest of the team did, too. We would have regular, obviously, conference calls on all kinds of subjects and we would involve everybody in those calls. And then we also did fun stuff. I mean, who’s ever thought about having a Halloween party or having birthday parties for people remotely? We figured out ways once again, not me, but the team in having fun as well as communicate, you know, and getting people’s advice and opinions and letting them know what’s happened. Now, I will tell you that post the nine month mark, when we recognized, at least in the US and beyond that we were blessed and starting to have vaccines coming online where we could kind of see the next stage in our evolution. I did start to hear from a lot of clients that we had to refocus on culture, and that meant getting people back together on the right time frame where people were safe and whatever, and maybe having people come in a couple of days a week at some point in time, whether that happens as of June 1st, whether it happens Labor Day or whatever. Bill Ferguson (Ferguson Partners): But I think they recognize you cannot run a company and have a sound culture by doing it remotely five days a week. And so companies have started to make plans to bring people back and as I said, bring them back safely and on their terms to some degree for sure. But business execution was starting to suffer a little bit and so forth. And so I think what would leaders have learned? Is that going? Forward, you can be more flexible is how you run a company. We’re not going to require people to come back five days a week. We’re going to ask people probably to come back three days a week and give them those other two days to work from home and still be very involved in their family life. I think Kim, my assistant, well, she’s got a daughter who’s now riding horses. Well, Kim commutes three hours a day to the office and allowing her to stay two days at home. You know, at five o’clock when she’s done, she can go to go see her daughter with her horseback riding lessons, and that’s for sure. So I think we will now witness going forward a much more flexible work environment and allowing people to enjoy their families and to make sure that they’re making this a priority while still coming in a few days a week and getting us back into a culture routine where we can run a business and run it. Carolyn Lane (REALPAC): Well, that’s great, as horseback riding is very important to me, so I’ll have to connect with Kim! OK, so is there anything that I didn’t ask you about your book that you want to do that you want to discuss? Bill Ferguson (Ferguson Partners): Yeah. Thanks for asking, Carolyn. And once again, appreciate the opportunity. All the proceeds from the book are going to an organization by the name of LEAD. You can Google it and whatever. LEAD is an organization based in Atlanta and it is totally dedicated to the well-being of underprivileged youth. And not only does it help, in essence, kind of get these young people who are talented into good colleges, but it also helps them find opportunities once they’re out of out of college and kind of their first job in the workforce. And we, as a firm, as I know you are at REALPAC, hugely dedicated to DEI. And this is a generation of youth that we’re told, and I totally convinced that if you can give them support at this stage in their own growth and evolution, you can help ensure their success academically and also in the workforce. So we’re very excited to, in essence, kind of give every penny that we earn in the sale of the book to lead, and then they can make a difference in these young people’s lives. And we’re very excited about it. And we really appreciate your support and our support and others in really making this contribution to a very, very worthwhile cause. And like us, I know you and Michael are totally dedicated to diversity, equity, inclusion, not only in your organization, but across all the organizations you serve. And I think that’s going to do everybody stand them well, relative to the diversity of thought around the table makes for better business performance. So thank you for that. Carolyn Lane (REALPAC): Yeah, absolutely. Well, Bill, it’s been a pleasure speaking with you, but I’m afraid that’s all the time that we have for now. So, once again, thank you so much for joining us and for sharing your insights. We really appreciate it. Bill Ferguson (Ferguson Partners): Well, Carolyn, thanks all of you, for all you and Michael do for all the real estate organizations throughout Canada. And we very, very much prize our special relationship with REALPAC. So thank you for that. Carolyn Lane (REALPAC): Likewise. Michael Brooks (REALPAC): Well, this is Michael Brooks and that’s it for this week’s episode of REALtalk. Be sure to visit us at Realpac.ca/REALtalk and subscribe wherever you get your favorite podcast. If you have an idea for a topic or a guest, please send me an email at email@example.com. And if you like what you hear, give us a five-star rating. Thank you for listening and tune in next time.
18 minutes | Jul 14, 2021
REALtalk – with Amy Erixon (Avison Young)
On this episode of REALtalk, Amy Erixon, Principal and President, Global Investment Management at Avison Young, joins REALPAC’s Manager of Research & Sustainability Kris Kolenc, to discuss leadership and trends across environment, social, governance, and wellness. The episode covers: How Avison Young has set up its ESG practice and processes Current areas of focus Integration of these policy areas into all aspects of the business Data collection and mapping Climate risks and opportunities across portfolios Differences across North America and Europe when it comes to tackling ESG WELL and LEED cerficiations Net zero commitments About Amy Erixon: Amy Erixon founded and heads Avison Young’s Global Investment Management practice which is active across all major and select specialty property types in Canada, the US, Mexico, Germany and UK on behalf of major institutional investors. Prior to joining Avison, she was CEO of IGRI, a full service development and investment firm that built the first LEED certified projects across Canada in the mid 2000s. With more than 30 years of industry experience she has acquired, developed, and repositioned portfolios valued in excess of $9 billion, and completed large scale rezoning and development projects in numerous North American cities. Podcast transcript: Michael Brooks (REALPAC): Hello, everyone, thanks for listening and welcome to REALtalk, the show that brings you unique insights from leaders in Canadian and international commercial real estate. I’m Michael Brooks, CEO of REALPAC. Kris Kolenc (REALPAC): Hello, my name is Kris Kolenc, I’m REALPAC Manager of Research & Sustainability, and I’ll be hosting today’s podcast. Our guest today is Amy Erixon, Principal and President, Global Investment Management at Avison Young. Amy founded and heads Avison Young’s Global Investment Management Practice, which is active across all major and select specialty property types in North America and Europe on behalf of major institutional investors. Prior to joining, ever since she was CEO of a full service development and investment firm that built the first LEED certified projects across Canada in the mid 2000s. With more than 30 years of industry experience, Amy has acquired, developed and repositioned portfolios valued in excess of nine billion dollars and completed large scale rezoning and development projects in numerous North American cities. Welcome, Amy. Amy Erixon (Avison Young): Thanks, Kris. Nice to be here. Kris Kolenc (REALPAC): Today we’re going to talk about environmental, social governance (ESG) and wellness. Clearly, both of these trends are surging right now and will continue to be part of our industry well into the future. So let’s jump right into it. Amy, clearly, you’re one of our industry sustainability pioneers. We’re really lucky to have you and you continue to push the needle when it comes to ESG. Can you describe how Avison Young has set up its own processes and what areas you are currently focusing on regarding ESG? Amy Erixon (Avison Young): Yes, certainly our investment management team have been reporting and grasp since 2015 and we’re currently at top quartile reporter there at the corporate level. We last year adopted the UN Sustainable Development Goals as a framework through which our strategy is being executed. That led to improvement in a number of our internal policies, particularly around ESG and Diversity & Inclusion. And we have now developed key metrics that we’re tracking so that we can report out on our progress against that framework. And we adopted that framework because it is universally accepted as one of the key policy frameworks around which people are understanding how we’re all collectively working in the same direction. In our investment management group last year to continue moving that needle, we launched our inaugural TCFD Report. TCFD is the Task Force on Climate Related Financial Disclosures, and it’s the Financial Stability Board’s way of incorporating climate risks and opportunities into financial reporting. And we also became a PRI – that’s the UN Principles of Responsible Investing Signatory. Now each of those frameworks is considered a best in class position and that’s the reason why we pursued them. We wanted to not just do all the work, but report out on these internationally recognized frameworks and and get the scores to demonstrate how well we’re leading from an industry perspective across these issues. Kris Kolenc (REALPAC): Perfect. That’s great. I mean, clearly, yourself, and Avison Young has had great leadership. I mean, we have some of our REALPAC members reporting to TCFD and PRI, but it’s not a huge cohort quite yet. So it’s great to see Avison Young leadership there. So that’s great to see the progress you’re making. Of course, it’s a very busy field ESG, as you know, and there’s lots of challenges as well. So for you, Amy, with Avison Young you can speak to the industry in general, what are some of the main challenges you see when companies like yours are supporting ESG? Do you have any other thoughts on how we can overcome those challenges? Amy Erixon (Avison Young): Well, I think that, you know, I’ve talked about this a couple of times this year, that the silver lining of Covid has really shine the light on a number of these issues and how urgently we need to address them. So from the standpoint of the naysayer resistance, I think that that has substantially fallen away in the last year. And so it’s not so much about demonstrating the urgency of addressing these issues, but it’s the integration of these policy frameworks into how we deliver our services, how we think about our products, and making sure that we are walking the talk both in terms of our own operations, but also assisting our clients through our service delivery model to achieve their specific goals. Kris Kolenc (REALPAC): And our feed data is a big piece. We love data. We need you to support everything. How can you talk a bit about what you’ve seen? Avison Young’s data management, not just on the quantitative side, but also soft data and qualitative. How are you tackling that? Amy Erixon (Avison Young): Yeah, sure. We have a data warehouse and we are collecting all of the normal real estate data on a real time basis. But we have also picked up a number of adjacent data fields. When you’re starting to think about climate risks and opportunities in your portfolio, obviously the flood maps are pretty wrong. I mean, we have an asset, a large asset in Nashville, Tennessee, who have had two 1 in 1000storms in the last 11 years, so that’s sort of indicative of you need to actually start tracking insurance premiums, you need to start looking at where adjacent data that is going to help you get closer to understanding the trends that have the potential to physically impact your portfolio holdings from a transition perspective, which is another angle that TCFD approaches that’s really keeping track of the regulatory changes and the rate of change. And that’s a lot more difficult to forecast. So if you’re planning if you have a long term perspective on your portfolio and our clients do, then it’s not so important to have the precision of exactly when will these impacts hit as understanding and using screens in order to screen out assets where we feel those kinds of risks are unacceptable and or phasing out assets that have exposure to risks that we are worried may not be insurable in the future. Kris Kolenc (REALPAC): That’s great. And on the flood mapping side, we’ve done some work on that. It’s nice to see the federal government and their Budget 2021. They’re doing a national infrastructure assessment, the first of its kind. Hopefully we got some flood mapping as part of that because that’s just one piece where we need some better data. And maybe just before we move on, I think it’s really interesting your position since you’re global, especially in North America and Europe, when it comes to tackling ESG. Do you see differences in those two jurisdictions or just globally? Do you see some areas where challenges are more prominent than in others? Amy Erixon (Avison Young): Oh, for sure. It’s a spectrum. I mean, the Europeans have been embracing these initiatives and policy changes for longer than North America has in North America, and particularly the US and Canada are major oil producers. And just in general, that the weight of that segment of the economy weighs heavily on the policy makers and I think has caused us to lag in terms of development of national standards and the Balkanization of provincial controls versus federal controls or state controls versus federal is also an issue in North America. Whereas in Europe, most countries operate their own grid and so they’re able to integrate renewables and it’s one system. So those are two sort of factors, I think, that Canada has been at, particularly in our industry, a real leader in terms of getting in front of climate risks and GHG reduction and the efficiency of our buildings. And our grid is already 80% renewable. So we’re well ahead of the US in that regard. But my my track record working the US market for some 40 years suggests that the Americans can turn on a dime. And they did put a man on the moon. So I wouldn’t rule it out. I just think that there’s a big spectrum of takeup and actual actions to support what needs to get done to get there from here. Kris Kolenc (REALPAC): Totally. And now with the Biden administration are starting to see some action. Sometimes I think Canada’s going out to play catch up because they’re moving quite quickly on that. So moving on, we’ve talked about climate risks, data, ESG generally. Let’s talk about health and well-being. Obviously, that’s important. But with covid-19, of course, that’s being amplified. So Avison Young recently partnered with the World Green Building Council and the WELL Building Institute to develop a new health and wellbeing framework. Very exciting. Can you tell us a story about how this framework was formed and what it seeks to achieve? Amy Erixon (Avison Young): Yeah, for sure. I mean, for those people who have been active in the devices, which are the green councils in the US or Canada or who have been following LEED certifications, are aware of the fact that Rick Fedrizzi, who really pushed that effort forward through the Green Building Councils, launched the WELL Building Institute. And so there’s a lot of compatibility between the frameworks of the well certification and the lead certification. And so it was a natural partnership for them to come together to address this point. And the collaboration was in part designed to respond to the complaints of signatories or certifiers, entities like ours, that go and obtain building certifications about the fact that the certification systems use different metrics. They have different questions and they’re covering quite a significant overlap of items. So we were trying to streamline that and make it easier for people who have buildings that have LEED certifications to obtain, well, certifications. But as we started exploring what that looks like, I think it became readily apparent to the participants that one of the issues that we have to get beyond is thinking about the buildings on a standalone basis and that we. Need to think about them in the context of the community, and there are some places like Hamburg with the HafenCity where they have tried some experimentation and sort of communal zoning approaches in order to achieve a whole set of social objectives, in addition to the environmental standards that are applied to each building individually, for example, each building has to use some form of onsite renewable energy production. There doesn’t have to be the same. They’re allowing each owner to develop their own solutions and provide social support for the community context in order to get a better district out of the effort. So I would encourage people, if they aren’t familiar with the Building Better Places initiative, to reach out to either Kris or to me and we can get you those materials. It’s really interesting reading about how to think about what we’re doing here from a community perspective. Kris Kolenc (REALPAC): That’s great. And I totally agree to the kind of take a more macro lens of sustainability issues or the built environment rather than just, you know, my one building got a good lead score. Let’s move on. There’s so much more to it. And I know you and I were speaking before me. It’s kind of funny that for the WELL standard, that’s becoming a little more mainstream because now there’s a commercial with Lady Gaga, Robert De Niro just speaking to that. So, I mean, similar to how people recognize the lead label on buildings, maybe WELL and other things will become part of the Canadian knowledge as well. Amy Erixon (Avison Young): Well, along those lines, I saw that the Biden administration convinced the dating sites to put her on their scoring sheet for are you vaccinated? And the point is that men are less likely to get vaccinated than women. And so they wanted to demonstrate that women are twice as likely to select to date a man has been vaccinated than not, and it appears to be driving vaccination rates. So this stuff is all from a community context, amusing, but experiments work. Kris Kolenc (REALPAC): That’s so amazing. And the last big topic that’s really part of the conversation right now is carbon emissions net zero. We’re seeing more and more companies make net zero commitments, fewer in commercial real estate. Obviously, there’s challenges to that. I know our members want to make sure they have a very credible approach before they release anything in regard to that. But just on the on the state of net zero emission. So what do you think are some of the opportunities you should really be focusing on right now to hit net zero by 20, 50 or sooner? Amy Erixon (Avison Young): Yeah, well, this question really echoes the one two prior where there’s a big difference between how this is being tackled in Europe from North America. And our U.K. team has been privileged to be hired as the lead consultant to develop the net zero programs for the government of the United Kingdom and Scotland. And they’re starting to work for other countries. So the government is looking at their own footprint first, and they’re using that to inform how they develop financing tools and and policies and zoning standards and so on in order to drive net zero across the real estate community in North America. That leadership has really come out of the Canada Green Building Council and REALPAC and it’s really been the industry titans, particularly the biggest owners, the Oxfords and Ivanhoes and Cadillacs, who jumped on this four or five years ago and are really pushing the envelope because of their scale. They’re able to make a big difference in terms of how people understand that. But those industry consortia are really important and it’s important that we work together. The GBC has had working groups of cross functional professionals tackling various specific issues, and I’ve worked on two of those, one related to harmonizing the recycling rules because food, waste and demolition from Thai’s as you work through your building are two major sources of GHG emissions that should be readily controllable by substituting materials, by getting recycling standards standardized. And we just launched a new consortia about two months ago that’s looking at low carbon materials for ground up construction. So those that it’s bigger than the real estate industry, these consortia include contractors, materials suppliers, architects. We’re working as an eco system to try and get at those answers and then lean into organizations like yours to do the policy advocacy work with the government in order to get the financing to bridge the gap. Kris Kolenc (REALPAC): Perfect. And like you said, collaboration is key. At REALPAC at our ESG committee, we’re pushing it so hard, we had our first net zero meeting specifically on that topic a few weeks ago, over 60 people attended. We thought maybe it’d be a smaller group. We have a second one coming up. So lots to do there. And like you said, thinking beyond real estate, our world needs to hit these targets, countries need to. And then all industries need to grow in the same direction. So we look forward to continue to work with with our memberships and beyond and beyond Canada as well, just to make sure that we do make a difference here. Amy Erixon (Avison Young): Well, hats off to your leadership, Kris. I’m one of those 60 people, and I really enjoyed that conversation. And I think that there’s great value that people take away from it. They they are pretty open kimono about sharing tips and tools and resources that helped us get to, you know, a quick understanding of the issues at hand. And your handouts with four pages of links to industry resources are a little bit formidable, but you can’t find what you’re looking for in that bibliography, then you’re not you’re not paying attention. Kris Kolenc (REALPAC): So, no, that’s true. Thanks so much, Amy. And again, I mean, to our all our members, including yourself, the input has been amazing. And as our CEO, Michael Brooks would always say, we’re all in the same tribe. Sustainability professionals, even if we are competitors, we’re all rowing in the same direction towards the same goal. So the collaboration and openness is really great in that regard. But without Amy, it’s been great having you. Just as an aside, it’s also been great getting to know you over the past four years. I’ve been in the industry and I look forward to finally seeing you again at a conference, hopefully sooner or later in person. So thank you so much for joining us today to did that. Amy Erixon (Avison Young): Kris, thanks for having me. Kris Kolenc (REALPAC): So we’ve been speaking with Amy Erixon, Principal and President, Global Investment Management at Avison Young. Michael Brooks (REALPAC): Well, this is Michael Brooks and that’s it for this week’s episode of REALtalk. Be sure to visit us at realpac.ca/realtalk and subscribe wherever you get your favorite podcasts. If you have an idea for a topic or a guest, please send me an email at firstname.lastname@example.org. And if you like what you hear, give us a 5-star rating. Thank you for listening and tune in next time.
27 minutes | Jun 17, 2021
REALtalk – with Annie Korver (Rise Consulting)
On this episode of REALtalk, Annie Korver, Principal at Rise Consulting, joins REALPAC CEO Michael Brooks for a discussion around Indigenous reconciliation in commercial real estate, what economic reconciliation looks like, and building cultural and organizational competency to enable relationship building and reconciliation. The episode covers: The intersection between economic development and reconciliation The importance of acknowledging history The unique challenges faced by the Indigenous Peoples of Canada Treaties between Indigenous Peoples and the Crown The land back movement How Canadian commercial real estate can integrate Indigenous relations at a strategic level About Annie Korver: Annie Korver is a purpose-driven entrepreneur dedicated to enriching relationships between Indigenous and corporate communities. Inspired by reconciliation in Canada and her own Metis ancestry, Annie founded her company Rise Consulting Ltd. (‘Rise”) in 2013 to advance reconciliation and Indigenous inclusion with a focus on economic development. Bringing together Indigenous and corporate communities to create shared value, Annie champions a values-based approach to strategic inclusion. She creates undisputed space for her clients to realize their vision and establish inclusive relationships, ultimately supporting her clients with reconciliation. Annie has provided leadership to support the success of various Indigenous inclusion, economic development and regulatory activities for organizations such as Trans Mountain, Pembina Pipelines, and Imperial Oil and she is told that the positive energy she brings with her work is welcomed. Annie’s background in economic development, marketing and communications provides her with a solid foundation for translating multifaceted socio-economic challenges and opportunities, while leveraging the strengths and skills of those around her. Annie holds a Masters of Business Administration and Aboriginal Relations Leadership Certificate from the University of Calgary, a Bachelor of Tourism Management from Thompson Rivers University and is a certified Public Participation Practitioner through the International Association of Public Participation. Annie is a member of the Metis Nation of Alberta, is proud to serve as a Director on the Board with the Canadian Council of Aboriginal Business, is the Co-chair of the Young Women in Energy Indigenous Relations and Reconciliation Committee, and is a member of the Circle for Aboriginal Relations Society and Canadian Business for Social Responsibility. Podcast transcript: Michael Brooks (REALPAC): Hello, everyone, thanks for listening and welcome to REALtalk, the show that brings you unique insights from leaders in Canadian and international commercial real estate. I’m Michael Brooks, CEO of REALPAC. We are now joined by Annie Korver, who is the Founder of Rise Consulting, which she set up in 2013 to advance reconciliation and Indigenous inclusion with a focus on economic development. She brings together Indigenous and corporate communities to create a values-based approach to strategic inclusion and is a member of the Métis Nation of Alberta, serves as a director on the board with the Canadian Council of Aboriginal Business, is the co-chair of the Young Women in Energy, Indigenous Relations and Reconciliation Committee, and is a member of the Circle for Aboriginal Relations Society and Canadian Business for Social Responsibility. We are very fortunate to have her join us today for this incredibly important discussion on what Indigenous reconciliation looks like for commercial real estate in Canada. Welcome Annie. Annie Korver (Rise Consulting): Hi Michael. Thank you for having me. It’s a pleasure to be here. Michael Brooks (REALPAC): All right. Let’s talk about let’s do a definition. Let’s talk about the concept of economic reconciliation, the intersection between economic development and reconciliation. Would you please share a little about what this means? Annie Korver (Rise Consulting): Sure. Absolutely. Michael, it’s always exciting. And I always appreciate opportunities to talk about the work that I’m involved with and my journey to get here, because it’s been it’s been an exciting one for me and it’s been somewhat linear as my career has grown and as I’ve received education. And it was actually through my MBA, I was completing an MBA at the University of Calgary. I’m actually joining today from my home in Treaty 7 territory in Calgary, Alberta, home of the Alberta, the Métis Nation of Alberta region, three of which I’m a proud member. So when I was completing my MBA in 2013, I was focusing on the intersection between economic development. I was working at the city of Calgary at the time in economic development and reconciliation as I was learning about my own Métis ancestry and really as I was learning about the history of Indigenous Peoples in our country and really the notion of rights, be it through that the British North American Act, be it through Section thirty five of our Constitution, I was learning about these things for the first time and I was identifying the intersection between economic development and economic reconciliation. And to really sort of as I journeyed about over the past decade, I’ve really learned that economic inclusion is really advancing community wellness and economic interests and living livelihood in a purposeful way. And we do that through purposeful thought and action based on based on knowledge and based on education. Michael Brooks (REALPAC): So we get commercial real estate people watching us and listening to us. What’s the opportunity in economic reconciliation for the Canadian commercial real estate industry? Annie Korver (Rise Consulting): Yeah, regardless of the industry, Michael, the opportunity always begins with understanding. So for your colleagues and members that are that are participating, it’s really about listening and learning and then on reflecting on what that opportunity could be through conversations with Indigenous Peoples and communities that have an interest in the lands and territories where we’re operating. And so this opportunity will vary. It’s not something that we can assume. We have to understand the opportunity through conversation. But I think a similar thread exists in all. And really it’s the notion that reconciliation is relationship. And so truth, reconciliation and justice are really at the heart of the opportunity. And by learning the truth of our history and through careful reflection, we’re able to participate in reconciliation, which is a process of healing relationships that support an equitable, just and inclusive society. And the honorable Murray Sinclair has been involved in a lot of this work. And he encourages us, you know, as Canadians, we must do more than just talk about reconciliation. We have to learn about how to practice that in our everyday lives within ourselves, with our families, in our communities, in our places of work. And I think the opportunity emerges and we get to identify what the things are, where we can actively participate and support economic reconciliation and think about leadership and making policy commitments or participating in community events that allow for a transfer of knowledge about opportunities with operations or projects with our business, where we identify training to employment opportunities or procurement practices, for example. Michael Brooks (REALPAC): We’re going to come back to that in a few minutes. The land piece is fascinating. I’ve seen a map recently of just how much of Canada is covered by treaties. It’s incredible. And these are the treaties generally negotiated between 1871 and 1920 when I found out from my friend Google and probably but there’s probably more disputed areas and rights still in question than just those treaty areas. How can we talk about Indigenous inclusion and economic reconciliation without talking about the land back movement and the reclamation of Indigenous lands? And how ought commercial real estate to relate to that, especially in jurisdictions like B.C., where there are a number of land claims outstanding? What are your thoughts about that? Annie Korver (Rise Consulting): That’s a big one, my friend. So Google is right of the treaties that exist. We have early treaties, friendship treaties with the Haudenosaunee. We have early treaties that that exist that were signed. But I think about BC, I guess in particular and really in many other regions in Canada. And our friend Google will give us more information about this as well. But land is unceded and that means that treaty, which is an agreement between Indigenous Peoples and the Crown, has not been signed. And so where land is unseated, Indigenous peoples never ceded or legally signed away their lands to the crown or to Canada. And this is complicated and it takes a lot of time to truly understand this concept, because in colonial ways of sort of thinking and being, you know, we live in systems. And so it’s difficult to think, OK, what was that like hundreds of years ago? And so essentially with the land back movement, what we’re talking about, Michael, is consent and the realization that Indigenous Peoples have suffered from and continue to suffer from injustices as a result of the colonial colonization and disposition of land, territories and resources preventing them from exercising their rights. I briefly mentioned rights earlier as I sort of have learned about what that means and how they exist. But Section 35 of our Canadian constitution, these rights have been recognized and affirmed, but the Constitution didn’t create them. Aboriginal rights have existed long before Section 35. And it’s important to also note that Section 35 doesn’t define them. It doesn’t define what Aboriginal rights are. But what we do know is that they cross a multitude of things and they’ve been defined through case law. There is a great book: Bill Gallagher is an author that I really like: in “Resource Rulers” he goes through sort of case law in Canada and so much of it is related to land. And the Calder case in 1973 is one that’s really important, I think, for this group to be aware of. And really what happens. In 1967, Frank Calder and other Nisga’a elder sued the provincial government of British Columbia, declaring that the title to their lands had never been lawfully extinguished through treaty or any other means. While both the B.C. Supreme Court and the Court of Appeal rejected the claim, the Nisga’a appealed to the Supreme Court of Canada for recognition of their original title to their traditional ancestral unceded lands. Their appeal was landmark. It was a landmark move, and it posed considerable risks not only for Nisga’a but to all Aboriginal people hoping to have their rights entitled, affirmed and recognized. And we see that today. So what the Supreme Court concluded was ground-breaking. While the lower levels of court had denied the existence of Aboriginal title, the Supreme Court ruled in 1973 that Aboriginal titles had indeed existed at the time of the Royal Proclamation of 1763. There’s this buzz out there right now about Crown land, but is it Crown land? Like we have to sort of take pause and think it’s not Crown land because it’s unceded territory. So there’s this Supreme Court 1973 decision was the first time that the Canadian legal system acknowledged the existence of Aboriginal title to land and such title existed outside of and was not simply derived from colonial law. I’m not a lawyer, but I secretly would like to do my JD – I really am interested. Michael Brooks (REALPAC): I am a lawyer, and I’m already confused. Annie Korver (Rise Consulting): Rights have been interpreted to include a range of cultural, social, political and economic rights, including the right to land, as well as to fish, to hunt, to practice one’s culture and establish treaties. And so really the opportunity right now, Michael, as we want to recognize the need to respect and promote the inherent rights of Indigenous Peoples. And so what we frequently see today and over the past number of decades, Indigenous Peoples are standing up for their rights and injunctions are being activated. And the concern that exists is that the Canadian government is not exercising free prior and informed consent. A primary tenant within the United Nations Declaration on the Rights of Indigenous Peoples as corporate Canada, including the commercial real estate industry. We have to consider the rights and we have to consider these on a case by case basis. It’s complicated, it’s emotional, but I really think that it’s something as Canadians, as we’re called, to reconcile with Indigenous Peoples will we are called to participate in repairing the damage relationship. And this is part of that. Michael Brooks (REALPAC): And I see as I think about what you’re saying, I see I see two parts to this. The first part I see to this is that if you’re a commercial real estate purchaser or developer, you need to be aware of the risk of unceded land wherever you are. And that’s not a title search. That’s more than a title search. The second piece that I’m hearing is that you need to engage with the local Indigenous communities and find out what their perspective is. That’s a little more social and personal than it is legal. Hopefully I’ve got those minimum two parts right. But let’s roll from that into the strategy, so. How can the Canadian commercial real estate industry integrate Indigenous relations to ensure that Indigenous communities, First Nations, Inuit, Métis are considered in annual planning at the strategic level? And what does that include? Annie Korver (Rise Consulting): Yeah, and I mean, you know, knowledge is power. As described earlier, it’s important to start with educating ourselves and developing an understanding of the history of Indigenous Peoples in our country, or especially in proximity to where we’re operating. Until Canadians become aware of and understand this history, it’s really tough to navigate the complexity of the environment. Michael, Indigenous relations needs to be well understood to be effectively integrated. And key to this is a commitment from leadership to purposeful and active, proactive integration of Indigenous inclusion built on the tenant. Nothing about you without you. I think in building knowledge, it leads to the creation of strategic priorities. Goals and objectives are or an overarching plan. And the opportunity exists to engage with community and integrate ideas and feedback received from community into the path forward. It’s really the opposite of the Indian Act, the opposite of the acts of assimilation. Michael Brooks (REALPAC): It’s a fascinating quote, nothing about you without you, and I can say that developers tell me what my regulatory barriers and hurdles are. And, you know, I then I want to buy this land and I want to put something up on it. But this is a little more than just legal requirements. This is this is more than that. One of the things that’s a very strong part of REALPAC has been our ESG group and our ESG committee, you know, 70 plus people on that. With the recent rise of the demand for ESG accountability by investors and other stakeholders. Is that another place to operate to integrate Indigenous relations with the company’s overall corporate social responsibility strategy? And how are they to go about doing that? I presume it’s the S we’re talking about the sphere of the one would think. Annie Korver (Rise Consulting): One would think at all. And actually that this is an area for growth for me, Michael, and I’m really digging in and enjoying it as I build my understanding not only of sustainability and ESG space, but really identify that intersection between sustainability, ESG and reconciliation. And often I am asked Annie, should it be SGI? No, I don’t think so. The I exists within the within the S and within the G, and I really think that the adoption of ESG standards has become almost a minimum entry requirement for most of Canada’s large companies and investment managers, reflecting a widespread consensus that a commitment to sustainable investment should not only be part of a company’s practices, but can directly improve its profitability and performance. And in my work with Ri’s, I really focus on Michael Porter’s model around CSV – creating shared value, which is different than CSR. And the challenge for investors is that the vast majority of the existing ESG standards do not include the rights and interests of Indigenous Peoples. And we’ve recently learned this together, Michael, as we went through the standards. But they’ve been developed in the absence of Indigenous input, which obviously is not ideal. And so the opportunities for us as corporate Canada, regardless of this, but regardless of the standards, to really sort of think about what those intersections are as we build out ESG strategic plans, reporting frameworks, metrics, targets with the input of Indigenous Peoples. Michael Brooks (REALPAC): It’s a great response because I now realize that’s been a blind spot for us. I haven’t thought of the I part of each of E and S and G, and that’s something that we will address going forward. Let’s talk about including Indigenous People in our business. Obviously, another big area for many industries in addition to ESG has been equity, diversity and inclusion. And we’ve talked about it certainly from headlines of Black Lives Matter and anti-Asian racism. But this is something that is critically important, to identify these communities and to find ways to attract them into our industry and remove unconscious biases. What are some of the barriers that you see to engaging with Indigenous Peoples and making them part of our commercial real estate industry? Annie Korver (Rise Consulting): Mm hmm. Yeah, I think, um, and it’s good to identify those intersections with what else we’re doing in organizations, Michael, with DEI or with you know, some of my colleagues say I don’t really like the BIPOC acronym, Annie. Indigenous Peoples have distinct rights, which makes them distinctly different than Black or People of Color. But the barriers that we see and we continue to see are linked to capacity and resources. So we see very large, successful Indigenous communities in Canada. Absolutely. With large real estate plays. But for smaller communities that are in proximity to development, be it real estate or energy, a lack of capacity to engage exists. There may not be somebody in community, in the band office, for example, employed, ready to respond to questions. You know, I’ve suggested conversations and engagement are paramount, but that’s very difficult. So that’s a barrier when you’re open to building a relationship, but there’s nobody to build it with or to have conversation with. And so we see capacity funding provided through development of projects or through operational activities to support. Communities in another big financial barrier with the Indian Act and with reserve lands and the status of communities, access to capital to participate, to have a seat at the table with ownership is really limited. And so we’re seeing new structures and programs come forward, Michael, which are excellent. I’m familiar with an opportunity here in Alberta with energy industry development, the Alberta Indigenous Opportunities Corp., which is specifically providing the program to provide capital to bring Indigenous communities to the table with asset ownership. Michael Brooks (REALPAC): Terrific. That sounds like a terrific initiative, and I hadn’t thought about the other side of the table and the fact that they may not have the resources to engage the real estate companies, might have a developing manager or even CFO CEO. But if the other side of the table doesn’t have someone who can speak at your level, understand your business, then it’s a problem. Let’s actually pivot a little bit to the role of government and the Truth and Reconciliation Commission in 2015 came out with 94 calls to action. How can these calls be acknowledged and implemented by the commercial real estate industry? How should they respond to the calls for reconciliation, creation and innovation with Indigenous Peoples? Annie Korver (Rise Consulting): Maybe I’ll start by just sharing a little bit of background information in case folks aren’t familiar with the Truth and Reconciliation Commission. So it was established in 2008. If you can go on the National Truth and Reconciliation website and you can order these booklets. I’m the lady standing on the corner like it’s the calls to action booklet. And so I have a whole stack of them here. But in 2008, the Truth and Reconciliation Commission was created as part of the Indian Residential School Settlement Agreement. And at the same time as this formal public apology from the Prime Minister and the Commission was formed as a means of reckoning with the devastating legacy of forced assimilation and abuse left by the residential school system. And so, from 2008 to 2014, the Truth and Reconciliation Commission heard stories from thousands of residential school survivors. And in 2015 in June, the 94 calls to action came out in response to the stories that they heard. And I think it’s important to note that within the 94 calls there’s topics related to wealth where welfare, education, language and culture, health, justice and reconciliation. And call number 92 is specifically for us. Michael, it’s the call to business. And so I’ll just read it now. So it says, :We call upon the corporate sector in Canada to adopt the United Nations Declaration on the Rights of Indigenous Peoples as a reconciliation framework”. Annie Korver (Rise Consulting): So you’ll also need to use your friend Google and look up the declaration and you can find the declaration and order these little booklets so you can have a set right on your desk. So it says to adopt it as a reconciliation framework and to apply its principles, norms and standards to corporate policy and core operational activities, including Indigenous Peoples and their lands and resources. This would include committing to meaningful consultation, building respectful relationships and obtaining free prior and informed consent before proceeding with the economic development activity. Ensure that Aboriginal peoples have equitable access to jobs training, education opportunities in the corporate sector, and that Aboriginal communities gain long term sustainable benefits from economic development projects. And third, provide education for management and staff on the history of Aboriginal peoples, including the history and legacy of residential schools under the Treaty and Aboriginal rights, Indigenous law and Aboriginal Crown Relations. This will require skills based training in intercultural competency, conflict resolution, human rights and anti-racism. And I’m often asked, even at my Christmas dinner, by my own family. What does reconciliation mean? And really, it’s about relationship, our ability to have respect for other people and for ourselves through the process and about the learning process. It’s really about truth, reconciliation and justice. And today we have the opportunity to ask ourselves what we want that relationship to look like. For Canada to prosper, we must establish a new and respectful relationships between Indigenous and non-Indigenous Peoples and move forward with reconciliation and co creation. Michael Brooks (REALPAC): It’s the residential schools situation is shocking, I mean, for those of you listening today, can you imagine having your children taken away from you, taken far away, put on a school indoctrinated with a different culture? I mean, it’s shocking in hindsight. And that that that that went on so hence the tense, hence the reconciliation part of that. I’ve heard you say in an interview that Indigenous inclusion is something that that can be woven into all aspects of the organization. And it’s not a bolt on. It’s not something that as an organization proceeds, they can choose to activate or not activate. What final words of advice do you have for the leaders? Joining us to take away from today? Annie Korver (Rise Consulting): Yes, it’s like I have these key phrases right in my circle. Yeah, you know, I’m firm with that, Michael, and it’s really built on my understanding that reconciliation is relationship and the principles of reconciliation or a relationship, just like any of our relationship with our family, our spouses, our friends, their ongoing and purposeful, we work hard to build trust and respect and to maintain both. And this won’t happen if Indigenous relations and economic reconciliation activities or an afterthought or are optional or in some organizations that are building projects. And they say to the owner operator, would you like this to be an inclusive project or not? I mean, that doesn’t make sense. And so they need to be woven throughout all aspects of our organization, led by a committed group of leaders who truly understand and demonstrate what an inclusive culture looks like. Michael Brooks (REALPAC): Annie, thank you so much for your candidness and honesty across this conversation today. Deeply moving and hopefully just the starting point for a longer conversation within our industry and what we as leaders in commercial real estate can do to make tomorrow’s Canada better than yesterday’s Canada. So thank you. Annie Korver (Rise Consulting): Thank you, Michael. It’s been such a pleasure to have a conversation with you and have a great have a great day. Michael Brooks (REALPAC): Well, this is Michael Brooks and that’s it for this week’s episode of REALtalk. Be sure to visit us at realpac.ca/realtalk and subscribe wherever you get your favorite podcasts. If you have an idea for a topic or a guest, please send me an email at email@example.com. And if you like what you hear, give us a 5-star rating. Thank you for listening and tune in next time.
16 minutes | Jun 7, 2021
REALtalk – with Hugh Kolias (yuhu)
On this episode of REALtalk, Hugh Kolias, CEO of yuhu, joins REALPAC CEO Michael Brooks and COO Carolyn Lane to discuss the state of technology in the multi family asset class, Canada’s progress in this space, and how leaders can equip themselves for the future. The episode covers: The state of technology in the multi family market Canada’s relative advances and lags in this area The value of tech during the pandemic, and how tech helped Future thinking “must digitize” areas, and tips for asset owners Innovations in Canada, US and Europe About Hugh Kolias: Hugh received a Bachelor of Applied Science in Mechanical Engineering from Queen’s University in 2012. Hugh left his job at a Toronto-based hedge fund to become CEO of his own company and launched Yuhu in late 2016. Yuhu is a comprehensive SaaS platform focused on improving and unifying property operations, processes and resident experiences to multifamily owners and operators across the US, Canada and Europe. Some of Yuhu’s client’s include CAPREIT, Boardwalk, Campus Living Centers and Hollyburn. Podcast transcript: Carolyn Lane (REALPAC): Hey, Michael. So before we get started, here’s a little background on our guest today. In 2012, he received a Bachelor of Applied Science in mechanical engineering from Queens University. He went on to the job at a Toronto based hedge fund and after four years, he left become CEO of his own company and launched yuhu in late 2016. You is a comprehensive software as a service or SaaS platform, and it’s focused on improving and unifying property operations, processes and resident experiences to multifamily owners and operators across Canada, the US and Europe. Some of you whose Canadian clients include Boardwalk REIT, Campus Living Centers, and Hollyburn. Hugh Kolias (yuhu): Thanks so much for having me, everyone. Michael Brooks (REALPAC): All right, Hugh, let’s start with the state of tech in the multifamily owner market, and I’m using apartment and multifamily interchangeably today. You’re talking to multifamily building owners all over North America. Where are we in terms of relative sophistication in Canada? Can you give examples? What’s lagging behind and what’s seemingly up to date? Hugh Kolias (yuhu): Yeah, absolutely. It’s been an interesting journey over the last couple of years. And I’d say Canada’s definitely made a decent headway over the last two, three years, which has been fantastic to see. I think what is repeatedly articulated a lot of industry conferences is, you know, Canada’s five, ten years behind from a technology adoption curve. And as we have our conversations with property managers really across the world, I don’t know if that’s as valid today. And there’s been a lot of focus on the resident experience in Canada. So there’s a lot of companies and property management, owner operators who are focusing in on that resident experience through whether it’s apps or online portals, which provide a great platform for on the smart home side. I think we’re maybe a couple of years behind from an adoption perspective, but the US isn’t necessarily that much further ahead. There hasn’t been mass adoption and the players are really still kind of duking it out to find kind of that that industry standard. And I think that’s what everyone’s kind of waiting for. It’s a difficult problem to solve from a hardware perspective. There’s tons of different hardware providers across the spectrum. And really finding a provider that can consolidate all of those into one I think is probably the key to success there. So there’s a couple of great names coming out of the US, but Canada is definitely a little bit further behind from even just kind of jump starting at least kind of dipping our toes in as a as a as a country, I guess you could say. Hugh Kolias (yuhu): So that’s probably the biggest area that we’re we’re behind that in terms of access to different technologies. A lot of what’s available in the US is available in Canada as well. And you see a big concentration. The biggest difference, I’d say, actually, is that there’s a bigger concentration of Yardi based clients in Canada than the US. So a lot of clients are kind of adopting the Yardi stack and then augmenting it with other point solutions or platforms like ourselves that kind of sit on top. So definitely when we first started a couple, was it four or five years ago now? I guess six actually almost. We we noticed in a lot of our conversations that there was a hesitancy to adopt cloud, adopt SAS and that conversation has definitely dissipated, which is being great. So that’s helped kind of accelerate that tech adoption curve within the property management industry. And it’s definitely accelerating. So lots of exciting kind of initiatives going on across a lot of our clients and within other prospects that we talk to within Canada. And I definitely say we’re we’re not as far behind as everyone would like us to think, which is which is exciting. I think that’s that’s great for Canada and and great for the industry. Michael Brooks (REALPAC): Yeah, that’s interesting. When I think about REALPAC’s experience, you know, we and most organizations in Canada, with the onset of the pandemic, had to pivot to becoming digital immediately, every part of our operations and communications and banking and so on and so forth. Have you seen anything similar with the apartment owners? Have they have they learned about the value of tech during the pandemic? And if so, what have they done? What have they been doing and where has tech helped? Hugh Kolias (yuhu): Yeah, it’s it was I think just about everyone saw that that meme that was going around on LinkedIn about it was the biggest driver for your technology transformation plans. And it had a couple of options and it was one of them. And of course, covid was the answer. And that really drove a lot of companies, I think it just about every every vertical to adopt some sort of technology. So we saw a lot of clients adopt kind of WhatsApp or Facetime or any of the other kind of virtual video conferencing tools to do virtual showings, a lot of clients would set up kind of like payment portals and just try to try to bring everything online as quickly as possible. I think what that has caused, though, is a little bit of a hodgepodge. Let’s call it a hodgepodge of technology solutions that clients have kind of put together because they had to put it together really, really quickly over one to three month time period once covid hit. So now what we’re seeing is everyone’s kind of digesting their technology changes and looking to us or other providers to kind of consolidate some of the the point solutions or ad hoc solutions or providers that they put in as quickly as possible. So that’s been a very interesting, I think theme for this year is call it digesting of a massive change in such a short period of time. Hugh Kolias (yuhu): But it’s super commendable. I think a lot of our clients went through just insane amounts of change from a technology perspective. They probably did five times more initiatives. It’s maybe a bit of an over exaggeration within that time period than they would have within like a couple of years, which is which is great to see. And now we’re kind of just digesting that through. So we’ll have a lot of interest on the payment side. I think that’s a piece that everyone wants to kind of bring online and really directing residents and their inquiries online, because that saves a lot of time from a site perspective. And coming out of the pandemic, no one really knows what kind of social norms are going to exist, whether people are going to go back to kind of that site office initiative experience or we’re going to transition more to self serve and more people are more comfortable towards that, which is, of course, our bet. So that’s definitely been an exciting shift and change, I think, that we’ve seen over the last year. And I think kudos to the industry for really driving that change forward and meeting the needs and putting safety first. Carolyn Lane (REALPAC): So, Hugh, what’s the way forward and what are some of the must digitize areas of the apartment industry? Do they have a payback period or how should owners drive what to digitize next? What are the next steps? Hugh Kolias (yuhu): Yeah, it’s a great question. I think now that we’ve gone past kind of the pandemic and doing the must haves in terms of health and safety, the next step is, as any any business owner always thinks about, is is ROI and payback. And that can come in a number of different ways, whether it’s a bump in rents because you’re providing a better service to your end users or it’s a savings in costs. So whether that’s the tech is allowing you to operate that save on the operational side of your business. So what we see as themes, I think a big part of it is centralizing some of the administrative overhead. And that’s really what we’re we’re gearing towards and have kind of built our platform around is focusing in on as an example on the leasing experience. There’s a lot of administrative overhead in terms of approving applications and consolidating a lot of that into a head office role instead of having your your site staff perform that on the maintenance side as well, trying to provide a more centralized way of of scheduling and dispatching and instead of having dedicated staff per building, being able to increase essentially the number of units per staff member on the maintenance side. So those are some great kind of areas and initiatives that take both technology and a change in operational processes to move that move that forward. Hugh Kolias (yuhu): And definitely some some exciting things that we’re working with, with clients and prospects on rental payments, as well as another big one that I think we’re just in the early innings on. A lot of residents are still paying by check and going to the side office. So there’s not only administrative overhead there, but also in the age of covid trying to minimize that as much as possible. I think having an online payment portal at the very least, I think really helps with with that transition. And then, as we mentioned, kind of in the first opening, I think that the smart apartment building component is definitely a great area to explore. Companies in the US are seeing kind of rental bumps for units that have kind of that. Smart apartment asks features and functionality, and there’s also operational aspects that when you merge that with one of your operational platforms, you’re able to consolidate some of the processes, such as the twenty four hour notice of entry on the maintenance side, being able to automate that whole process, give the maintenance technician the ability to type in the code. That’s one time once the permission is granted and accessing the unit, little things like that actually add up to quite a bit from an ROI and cost savings perspective. Carolyn Lane (REALPAC): And is there anything really innovative going on in Canada, the US or Europe in regard to digitization in the multifamily space? Hugh Kolias (yuhu): Definitely. I’d say the the smart apartment access control that whole realm. I think there’s there’s lots of activity occurring there on the payments and even insurance side. There’s some interesting developments there, whether it’s deposit insurance for the smaller mom and pop landlords, there’s even a full kind of rent insurance. So if the resident defaults on rents or destroys the unit, you’re essentially fully covered for a certain number of months, upwards of six months to a year. And so it’s neat to kind of see some of the fintech related aspects that have really kind of been spurred, I think, as partly through the pandemic and the smart home and smart apartment piece has been going for the last five plus years. But it’s really up until the last couple of years where you’ve seen a big movement there. I think SmartRent is IPing over the next couple of weeks, which is exciting. So they’d probably be one of the leaders in the space from that perspective. Latch has some some beautiful hardware. So definitely those two areas I think are are areas to watch from an innovation perspective. And then there’s lots of, I think providers, ourselves included, that are really kind of focusing in on that resident site staff and even the physical property experience, because they’re all kind of tied into one one area and trying to really optimize that for for the future, which we’d argue is almost four for the current state. I think a lot of the conversations are focused in around, you know, how far behind is Canada from the US. But I think another way of rephrasing that is how far behind is the industry from where the consumer behavior is today? And from that vantage point, I’d say we’re definitely five or 10 years behind. And that’s really what’s spurring a lot of these providers. And even the larger, you know, the yards and the real pages of the world are also really focused on trying to bring the industry forward. Michael Brooks (REALPAC): Terrific Hugh. Thank you very much for joining us today. We’re so pleased that we have a Canadian flag bearer with yuhu in the space, we’re so pleased that you’re keeping us up to date on a technology point of view. And I’m hoping there’s a lot more upside for you going forward. We’ve been speaking with Hugh Kolias, CEO of yuhu. Hugh Kolias (yuhu): Well, thank you so much for having me, Michael and Carolyn. Really, really appreciate it. It was a great conversation. Michael Brooks (REALPAC): Well, this is Michael Brooks and that’s it for this week’s episode of REALtalk. Be sure to visit us at Realpac.ca/REALtalk and subscribe wherever you get your favorite podcast. If you have an idea for a topic or a guest, please send me an email at firstname.lastname@example.org. And if you like what you hear, give us a five-star rating. Thank you for listening and tune in next time.
17 minutes | May 12, 2021
REALtalk – with Marco Ding (CPP Investments)
On this episode of REALtalk, Marco Ding, Director, Real Estate at CPP Investments, joins REALPAC CEO Michael Brooks for a discussion about the evolution of the real estate portfolio and portfolio strategy in CPPIB, the impact of disruptive events such as the global financial crisis of 2006-2007, and the way forward for one of Canada’s largest real estate investors. The episode covers: The evolution of the real estate group at CPPIB Building a portfolio of high-quality real estate assets A focused approach to international growth Managing direct deals and joint ventures The way forward for the CPPIB portfolio About Marco Ding: Marco currently leads the team responsible for executing CPP Investments’ real estate program in Canada, which comprises over 23 million square feet of office, retail, industrial and multifamily assets across major markets. As a founding member of CPPIB’s real estate investment team in 2005, Marco participated in over $10 billion in real estate transactions globally, including the organization’s first real estate investments in the UK, Asia, Australia, Brazil and the U.S. Prior to joining CPPIB, Marco spent several years with a major investment bank focused on IPO and M&A mandates in the Canadian real estate sector. Podcast transcript: Michael Brooks (REALPAC): Hello, everyone, thanks for listening and welcome to REALtalk, the show that brings you unique insights from leaders in Canadian and international commercial real estate. I’m Michael Brooks, CEO of REALPAC. I’m pleased to be joined by Marco Ding, who is Director of Real Estate at the Canada Pension Plan Investment Board – CPPIB for short, and he’s responsible for the Canadian portfolio at CPPIB. CPPIB is a $475billion fund with amazingly a 10.8% annualized return over the last 10 years. And of course, all of that’s due to Marco’s hard work there. Just kidding. Welcome, Marco. Marco Ding (CPPIB): Thank you, Michael, for having me. Michael Brooks (REALPAC): All right. So, Marco, tell us about your early career and how you ended up at CPPIB and the roles you’ve had in the fund. Marco Ding (CPPIB): Sure. I’ve been with CPPIB now for over 15 years and just thinking about how I got started. The business started when I graduated out of business school right during the dotcom bust. Obviously, we were in a recession at the time, so not a lot of jobs available for new grads like me. Luckily, I was able to to land at TD Securities and in the investment banking group, first as a summer student and as a full time analyst. After my work term was completed, I had very little formal training in real estate at school. They were just no courses on it. My first so my first real exposure to real estate was on the job when I joined the real estate group in one of my industry rotations in investment banking at TD. And really from there I fell in love with the business. It was tangible, intuitive, practical, simple, seemingly simple at first, but can also become very complex. And I always thought investment banking was a good way for me to learn the ropes of deal making. But it wasn’t a career that I wanted to pursue long term. And so after a few years, I started to look around for business opportunities and a colleague of mine who had left me a few years back was working at CPP Investments, and they told me that they were hiring. So I applied for a position. And actually, at the time the real estate group at CPP Investments didn’t really even exist. And so I applied to their private investments group and someone in H.R. saw my resume and said, hey, you got some real estate experience. We’re actually spinning off a real estate group. Would you be interested? I said, of course. Marco Ding (CPPIB): So I went in for a series of interviews, got the job. And in the summer of 2005, I was I joined the real estate team as their fourth investment professional. And as you can appreciate, when I joined the real estate group back then, in many ways it was like working for a billion-dollar start-up. We basically started from a blank canvas and our only mandate was to build a portfolio of high-quality real estate assets with durable returns over the long term. And we started our business in our own backyard, initially focused on building our domestic book. And one of the first deals I worked on was the privatization of O&Y REIT and O&Y Properties with our partners, Brookfield and AIMCO. From there, I also worked on our first JV with Oxford, where we acquired a 50 percent interest in most of the Vancouver and Toronto office portfolios. And that relationship would become one of our largest and longest partnerships to date. And with the O&Y and Oxford deals, it gave us immediate scale in Canada. And so from there we then turned our sights to growing the business internationally. And I was part of the team that built the foundations of our global real estate business. Today, I was tasked with identifying markets that were scalable and attractive from a return perspective, build an investment strategy, source local partners, and execute on transactions until we reach some reasonable scale. And from there, we then would hire local team and establish local office and rinse and repeat. And so I had the opportunity to build that program in many markets globally, including Europe, Asia, Australia and Brazil in the US. Michael Brooks (REALPAC): Let me jump in there. The rinse and repeat part is interesting. Many in the business will remember Graeme Eadie, who probably was the boss of those four people back in the early days, will remember him fondly. But what were those early strategies other than acquiring large existing portfolios? How would be evolved and how have they changed over time? Marco Ding (CPPIB): Well, I think, you know, for those of you who know Graeme, he’s one of the most pragmatic and methodical investors in the business. He’s a man of few words and he likes to maintain a low profile, but he’s laser focus on the job at hand. And I think those qualities of pragmatism, modesty and sticking to one’s principles really helped us grow the program quietly but effectively. In many ways, it’s the Canadian ethos. Keep your head down, focus on the task at hand, and don’t chase headlines for its own sake. And, you know, I think. Through that approach, it’s kept us well placed to grow our portfolio carefully and methodically over the past 15 years, particular, for example, sticking to our principles has worked well for us. We, for example, we had we knew that we had a lot of capital to deploy, but the intention was never to empire built. And we only focused on markets that made sense from a risk return perspective. And so as we were growing internationally in the mid 2000s, for example, we intentionally underweight the US as a real estate market because we didn’t feel like the risk reward proposition was overly attractive. And as we all know, history’s proven that it served us well. As you know, during the GFC, we exited that that crisis relatively unscathed. You know, we’re also a firm believer that we’re investors first and we’re not operators. And so on the equity side, we’ve generally not focused on sectors that were more management intensive, like hotels and retirement homes. And again, I think that’s serving as well as we speak into this crisis. You know, I think we also owe a lot of our success to a healthy dose of pragmatism. Marco Ding (CPPIB): And so, for example, we knew that we wanted to create a direct investment program, but with a small team, like you said in the early years, we knew that that would not be a practical approach from the outset. So one of the ways we grew our portfolio initially was to invest in funds. They were more expensive and more passive than we prefer, but they also provided a window into the market and provided us with a lot of valuable market intelligence. And so as we learn more about those markets and built a local team, we then pivoted towards direct deals and joint ventures, which now form over 95% of our business. And I think finally, you know, while we are one of the largest investors globally, it’s always important to remember who we work for. It’s the 20 million beneficiaries and contributors into the plan and that keeps us grounded. So having a bit of modesty, humility is has been our approach. And I think it’s turned out also good for our business. Our approach has never been to throw our weight around for its own sake, because at the end of the day, our business revolves around building partnerships with local operators. So, you know, one may be able to steamroll your partner to get what you want when they’re in need of capital. But we don’t believe that’s how you build long lasting relationships. It’s a two way street. There are always puts and takes. It’s never just about one deal. And so with this approach, we’ve been able to build a number of very successful and enduring global relationships, many of which are over 10 years old. Michael Brooks (REALPAC): It’s a terrific story. You’re describing moving to funds first and then to direct probably is the is the playbook for many small pension funds who are growing, who follow the same strategy and for the same reasons on the markets side of things you mentioned about not going into the US, but you’ve obviously got choices about which countries to go to and you’ve probably got choices about which asset classes are ignoring for the moment, hotels and retirement homes, which you’ve already said you don’t like because they’re more active, but you still got four others to choose from. You know, what’s the strategy been about which countries and which of the four main asset classes? Marco Ding (CPPIB): Well, I think our approach into identifying markets and building an investment strategy in the markets that we like has has been laser focused on A. Partner quality and B. Scale. And so there might be very attractive markets and sectors in the world. But if we’re not comfortable with the partners in those markets or we feel that they’re not large enough to build scale, you know, we’re unable to to make investments because with a team of, you know, 80 or so people managing over 40 billion dollars, that’s a lot per person. And so we are laser focused on being efficient. And what we do, we don’t have an operating platform unlike some of our peers. And so we need to be very methodical in terms of how we deploy that capital to markets and partnerships in sectors that are highly scalable. So in many ways, our private business is dictated by the size of markets and the quality of partners that are available. And from there, once we can achieve those those two criteria, then we would look at, OK, is, you know, is is the actual real estate attractive? So from us, for our perspective, we focus on the market, the partner, and then from there and we identify the the actual specific real estate to invest. Michael Brooks (REALPAC): That actually makes a lot of sense to me. I mean, if you get so much money pouring in the door that you got to put out, it makes sense for you to think about scale because you’d rather do one five hundred million dollar transaction than ten fifty. The million dollar transactions, I would think, and probably that those relative numbers grow over time as you get more and more money, money in the portfolio. Marco Ding (CPPIB): Yeah, well, what we tend to think of scale, not by a deal by deal basis per say, but we tend to look at our relationships as programs. So, for example, we have a very large billion dollar plus program with Goodman in China, for example, where we’re the second largest industrial landlord now in that country. Now, we didn’t grow to that portfolio through a series of large transactions. It was a deal by deal, site by site development type of strategy. And so you might say, well, I’m approving smaller deals that come in on a on a deal by deal basis. But so long as we see that there is a path to building that program to scale over time, we’re OK with that. Right. Because it’s all about for us, it’s all about efficiency. So we’ve underwritten that sector. We’ve underwritten that partner. We’ve agreed to the JV terms. And so that makes for a much more efficient approval process. And so if you look at our JVs in multifamily or industrial, which, you know, by its very nature have very small lot sizes, especially when you’re talking about development. And so we’re OK with that, so long as we know that the partnership and the sector is scalable over time. So in office, you know, there are large ticket sizes. We get scale by doing a few of those deals. But with industrial multifamily, for example, we put we put parameters around a program. We call it a programmatic investment. And so in our in our internal approval process, we streamline we streamline that process such that when a deal comes in, we’re just looking at the returns. And we’re not asking about the partnership or the sector because we’ve already checked those boxes. Michael Brooks (REALPAC): That makes a lot of sense to me and on the partner side of it, does that mean, you know, you try to keep the number of partners you’re interacting with globally down to a reasonable number? I have no idea what that number is, but would seem to me that further to your given experience in China, that you would want to be calling the herd from time to time. Marco Ding (CPPIB): Yeah, undoubtedly over time there’s going to be some relationships that don’t grow as quickly as you pan out. And at the same time, we’re also now as the portfolio continues to grow, but it’s also reached a stage of of being more mature, you know, 15 years into the program that we’re focused on harvesting returns. And so, you know, while it’s the first 10 years of my career, it was very much focused on building local teams, putting out capital, building a portfolio. I think in the last five years, I’d say we’re becoming increasingly focused on harvesting returns, charting the portfolio, calling assets, exiting out of partnerships that are not going to to to achieve your point, making sure that we continue to operate very efficiently and have a very highly cost effective and scalable business. So I think asset management shirting assets has become an equally, if not more important part of our business as compared to doing new investments. Michael Brooks (REALPAC): It makes great sense. So so what’s the way forward for CPPIB portfolio? Do you see any changes in this strategy on the horizon? And where do you find growth, if not durable returns in this market? Marco Ding (CPPIB): Well, that’s the that’s the ninety thousand dollar question. I think with a portfolio of our size, admittedly, it becomes increasingly challenging to generate alpha – with a 40 billion dollar portfolio, you become the index that you’re benchmarked to in many ways. And so, you know, we’re we’re focusing to achieve sustainable alpha generation and really two ways. First is by focusing on the emerging markets. So for us, that’s China, India and Brazil. And the thesis being that, as you can see, the economies continue to thrive. So to build their demand for high quality real estate, which in many of these markets are few and far between, and so much of our program and those markets are development oriented. But these markets also have their own idiosyncrasies in terms of language, culture and business practices. So we are firm believers that having a local team and that presence helps to mitigate some of the risk associated with investing in emerging markets in general. The second approach is by expanding our mandate into the public markets through a reprogram. So we set up a reprogram a few years ago and that the focus of the reprogram is really to provide us with another avenue to access real estate, provide real estate exposure in areas that perhaps we’ve had less success in accessing on the private side. And the market, as you know, is much more liquid. And so it also allows us to deploy capital quickly when these markets are dislocated. So case in point is, you know, wind the tape back 12 months ago when the markets and the equity markets at large were in a massive sell off. We saw that, you know, those shares were trading at well below intrinsic value. And so we acted quickly and were able to to use the public markets, to build meaningful positions, to acquire positions in high quality names that we think are pretty attractive prices back then. Michael Brooks (REALPAC): Great strategies. I’ve been joined today by Marco Ding, Director of Real Estate at the CPPIB, who is responsible for the Canadian portfolio at CPPIB. Marco, with you and your colleagues, we are in great hands. Thank you so much for being with us today. Marco Ding (CPPIB): Thanks a lot, Michael. My pleasure. Michael Brooks (REALPAC): Well, this is Michael Brooks and that’s it for this week’s episode of REALtalk. Be sure to visit us at Realpac.ca/REALtalk and subscribe wherever you get your favorite podcast. If you have an idea for a topic or a guest, please send me an email at email@example.com. And if you like what you hear, give us a five-star rating. Thank you for listening and tune in next time.
16 minutes | Apr 7, 2021
REALtalk – with Hugh Molyneux and Carl Paulse (Refined Data)
On this episode of REALtalk, REALPAC CEO Michael Brooks sits down with Refined Data‘s Hugh Molyneux and Carl Paulse to talk about environmental, health and safety (EHS) solutions for the real estate sector, challenges faced by the sector responding to COVID-19, and what the future of the space looks like. The episode covers: The main challenges being faced by the real estate sector in keeping their buildings safe and compliant during COVID-19 The structure and purpose of an EHS program Biggest challenges building owners face in implementing an EHS program Benefits arise from implementing a strong EHS program The evolution of the EHS, sustainability and governance space over the next 5 to 10 years Hugh Molyneux is the President of Refined Data, which he co-founded in 2007 to develop Environmental, Health, and Safety (EHS) solutions for the real estate sector. Hugh’s degree is in environmental geology and prior to founding Refined Data his career spanned the assessment and remediation of contaminated real estate as well as developing brownfield sites. Carl Paulse has more than 30 years experience developing enterprise-grade technology solutions. He joined Refined Data in 2015 and is now a full partner in the business. In his role as CTO, Carl has worked closely with Refined Data’s clients to create innovative technology solutions that ensure the Environment, Health and Safety agenda is addressed in a way that drives performance and increases NOI. Podcast transcript: Michael Brooks (REALPAC): Hello, everyone, thanks for listening and welcome to REALtalk, the show that brings you unique insights from leaders in Canadian and international commercial real estate. I’m Michael Brooks, CEO of REALPAC. I’m pleased to be joined today by Hugh Molyneux and Carl Paulse. Hugh is the president of Refined Data, which he co-founded in 2007 to develop environmental, health and safety, which I am going to call EHS from here on, solutions for the real estate sector. Hugh degree is in environmental geology, and prior to founding Refined Data, his career spanned the assessment and remediation of contaminated real estate, as well as developing brownfield sites. Carl is the Chief Technology Officer of Refined Data and has more than 30 years experience developing enterprise grade technology solutions. He joined Refined Data in 2015 and is now a full partner in the business. Welcome, Hugh and Carl. Hugh Molyneux (Refined Data): Thank you, Michael. It’s a pleasure and delight to have the opportunity to be with you here today. Carl Paulse (Refined Data): Yeah, thanks for having us, Michael. Michael Brooks (REALPAC): So today we are talking about environmental, health and safety in buildings, EHS for short, in the COVID age. We have another podcast on the cleaning and disinfecting of buildings in the COVID age, but now we move up into the big picture. Hugh, let me start with you. What do you think are the main challenges being faced by the real estate sector in keeping their buildings safe and compliant as we continue to deal with COVID-19? Hugh Molyneux (Refined Data): Well, Michael, I think amidst all of the pressures and difficulties faced with all of us facing COVID, I think one of the good news stories has been Canada’s leadership in the development of protocols to reopen buildings in a safe and responsible way. If you look at the BOMA Canada Pathway Back to Work, it’s an example of Canadian leadership on the court in providing a practical and considered guideline around keeping buildings safe as and when we reopen. So I think we lead in setting some of the foundations in this area. I also think from an operations perspective, we have some of the best property managers in the world, and I think that adds to that foundation, so that we’re well set to safely reopen buildings when the time is appropriate. That having been said, Michael, I think the biggest challenge we’re going to face is boredom. I just speaking for myself and I see it around me, I think many of us struggle around getting a bit numb and complacent around following protocols, particularly as COVID drags on. So I think the top three challenges are going to be ensuring building occupants maintain social distancing and maintain the sanitation protocols over time that we’re all very familiar with. I think the second challenge will be directly related to managing the reopening of buildings because they’ve been inactive for long periods of time. And the kinds of things that you need to be cognizant of waste build-up the issues with pests, Legionella, and other waterborne bacteria, as well as mold and obviously structural issues as well, too. And then I think the final concern is this issue of the rising incidence of variants of the COVID-19 virus, because I think that that threatens to extend the lockdown and then that’s going to really exacerbate the first two challenges that we’ve talked about, you know, people maintaining the protocols and then also dealing with having buildings become active again and used. So I think those are the main challenges being faced right now, at least from an environment, health and safety perspective. Michael Brooks (REALPAC): It’s really interesting, you know, I’ve almost forgotten about pests and Legionella and mold and those things that that, of course, we were concerned about pre-pandemic. They’ve all almost been pushed to the side, but they don’t go away. And, of course, we need to be focused on those. And the boredom piece. Oh, boy. I mean, we’re all we’re all in the boredom piece – I agree that the boredom can lead to some complacency. Carl, over to you. What does the program do and what are the biggest challenges building owners face in implementing any program? Carl Paulse (Refined Data): Well, I guess I could state the obvious, you know, describe the acronym EHS and then stop and leave an awkward pause. But, you know, obviously there’s a much broader value statement than what the acronym represents. And some of the benefits have been surprising to us. And in terms of what the program does, people who share with us, the business continuity is one of the positive outcomes of a strong program, specifically in the way that it brings quality and consistency to the operational activities required to manage healthy, safe and compliant environments. That’s not what I would have considered when we first got into this business, I have to say. But in that regard, the EHS program becomes an integral element of a commitment to operational excellence. And that is a theme that we hear more and more often these days that while initially there was this focus on compliance and safety and the negative aspects, the preventative aspects of the EHS, it’s more and more become a focus on operational excellence, which has a much more positive image to it. But I think in the end, within the buildings, the program provides the operational playbook for a consistent delivery of safety and compliance. But at the portfolio level, it lays out the framework for managing risk, safety and compliance, both at scale, but also with consistent quality across large portfolios. And I think the other aspect of EHS programs that is important and strong programs is that the younger workforce has a much bigger expectation of a data driven and collaborative approach to performing their work and conducting their work. And strong engagement programs are unlikely to attract that younger talent in a way that the older, sort of more administrative approaches to NHS programs might not make as attractive. Carl Paulse (Refined Data): So, you know, there are a number of benefits to programs that expand beyond those business benefits. But the challenges are equally interesting, Michael. One of our clients told us that a software vendor appears on their doorstep with the perfect software solution. That’s the day that their problems begin. And for a technology company that was a little deflating, I have to say, but he went to share that change management is a significant hurdle. And if I could pick only one challenge, that would be the one that they would focus on in this industry, particularly because of the geographically distributed site management workforce, which makes the onboarding or introduction of change so much more challenging than in many other disciplines and in other industries. Beyond that is the problem of enterprise grade data acquisition, which is where our focus was. And it was initially because again, that distributed nature of the sites makes it really difficult to collect and consolidate data into business insights. And if you’re fortunate enough to track this data acquisition problems, you still face the enterprise information framework where there’s this need to assemble accounting, leasing operations, EHS, ESG, tenant service provider data all into a unified data set that is aligned with key business performance indicators. So challenges are often nothing to do with features and functionality but the impact to the business. You know, coming back to the change management point. Michael Brooks (REALPAC): That’s a really excellent point. And I guess that’s probably a challenge on the systematization portion of anything in a portfolio environment. And I get the objectives for senior management who want to move from a compliance approach to a best practice approach. And these types of platforms, including yours, would enable them to get there in a consistent basis, portfolio wide, regardless of who the who is using the tool, who’s accessing whatever the property managers, whether they’re in Nanaimo or Halifax, you know, you’re getting that consistent approach. Any other benefits that you haven’t mentioned, Carl, in implementing strong EHS program? Carl Paulse (Refined Data): Well, that consistency is super important because in order to scale an EHS program, the consistency puts you in a position to identify the exceptions that need your attention. And so rather than managing 600 sites, you’re looking at 20 who have an exception dashboard for a very particular reason, so that you’re able to reach out and focus your attention to where you deliver the most value for your EHS program. So that ability to manage by exception has become crucial as a benefit in implementing these programs. Michael Brooks (REALPAC): I’m also thinking that there’s got to be a risk management feature of this as well. If I’m a senior executive and I believe that I have a duty to provide a safe environment for my tenants and occupants of a building, I almost need to show that I have systematized my EHS approaches to discharge that obligation. So I’m thinking that that’s another important space. Which brings me to where do we go from here and here. Hugh, let me pivot back to you. How do you think the EHS and indeed sustainability and governance around that will evolve over the next five to 10 years? Where do we go from here? Hugh Molyneux (Refined Data): That’s a great question. And, you know, you could answer it in so many ways, but I’m going to be disciplined and pick maybe three things. If you look, there’s been a fundamental change in mission in EHS, which has really been in the old days to move from compliance and reporting. And that’s very much evolved to the realization that a well executed EHS and sustainability and governance strategy actually adds value to the business and not theoretical value. There are demonstrated increases in productivity, clearly defined reductions in lost time to accidents, and, of course, the protection and enhancement of your reputation. We’re moving along the continuum, which really started in avoiding getting into trouble, to appreciation of the opportunity to generate real and measurable business value. So that’s the first thing. I think if you look at the automotive sector, which recognized years ago that as you move production out to parts suppliers, one of the key things to guard against is any loss of quality across your supply chain. And in our industry, more and more services are being outsourced to vendors that provide focused and specialized expertise, whether that’s facility management, snow removal, building maintenance, etc. So there’s now a big move from in-house siloed functions to this collaborative network, all working together as a team to run a high performance building. So the ability to maintain quality communication, collaboration is all critical and technology and software. I think a very important role in gluing teams together, keeping everybody on the same page and allowing for work to be passed back and forth between vendors and people and the approvals process, all the workflow having that be very seamless. And so I think that’s going to continue to grow. Finally, the model of worker protection and claims minimization is giving way to proactive tenant visits and employee wellness. And you can see that with the proliferation of new building health and wellness standards. And I see that doing nothing other than continuing to grow and expand in the coming years. So performance, collaboration and a holistic approach is foundational. And software is just obviously an important component in delivering all of that. Michael Brooks (REALPAC): Very well, said, Hugh. And I’m also thinking about the return to the office mountain/behavioral mountain that many office owners will have to climb and instill confidence in their returning tenants and occupants that this is a safe place to come to and this will also be a plus. Carl, final words to you. Anything to supplement what Hugh has foreseen as drivers going forward? Carl Paulse (Refined Data): Yes, Michael, I think the important thing going forward is that we’re seeing an increasingly creative use of space and began with the pressures of Amazon on retail. And then the pandemic just collapsed that window into a much more aggressive cycle of change for our industry. And I think as a result of that, rapid change systems in general has to be able to adapt and be flexible in meeting the needs far more so than they were even a year ago. And that will have to be reflected in the rate of change and adoption of technology and appropriate use of technology in the industry to meet those changing outcomes. That from the technology side is the exciting piece. I think it will get us to a place where we needed to be in a fraction of the time that it would otherwise have taken us to do so. Michael Brooks (REALPAC): Well said. Those are great, great closing words. Thank you very much, gentlemen. I’ve been joined by Hugh Molyneux and Carl Paulse of Refined Data. Hugh Molyneux (Refined Data): Thank you, Michael. Carl Paulse (Refined Data): Thanks very much, Michael. Michael Brooks (REALPAC): Well, this is Michael Brooks and that’s it for this week’s episode of REALtalk. Be sure to visit us at Realpac.ca/realtalk and subscribe wherever you get your favorite podcasts. If you have an idea for a topic or a guest, please send me an email at firstname.lastname@example.org. And if you like what you hear, give us a five-star rating. Thank you for listening and tune in next time.
18 minutes | Mar 17, 2021
REALtalk – with Courtney Cooper (Alate Partners)
On this episode of REALtalk, Courtney Cooper, Principal, Alate Partners, joins REALPAC’s Brooks Barnett, Director, Government Relations & Policy, to discuss Proptech in Canada, the establishment of the Proptech Collective, and the future of the industry in Canada. The episode covers: The quickly evolving Canadian property technology space The establishment of the Proptech Collective The size and scope of the Canadian Proptech market The impact of the Canadian Proptech community on the wider built innovation movement Aspects of the Canadian ecosystem that make it so attractive for Proptechs How can we grow talent in the industry? Creating a more diverse CRE industry through Proptech Trends we are seeing coast to coast Prospects for growth in the industry About Courtney Cooper: Courtney is a principal at Alate Partners. In this role, she helps identify and scale promising real estate technology companies, provides market analysis and due diligence, and manages relationships with industry partners. Courtney has spent most of her career in real estate —including more than four years at Dream, leading innovation and business transformation initiatives. She went on to work as an Innovation Strategist at Great-West Life, where she helped one of Canada’s largest financial institutions analyze new markets and identify opportunities for growth. Podcast transcript: Michael Brooks (REALPAC): Hello, everyone, thanks for listening and welcome to REALtalk, the show that brings you unique insights from leaders in Canadian and international commercial real estate. I’m Michael Brooks, CEO of REALPAC. We have with us today is guest host Brooks Barnett, REALPAC, Director of Government Relations and Policy. Brooks Barnett (REALPAC): Thank you, Michael. Today, we are talking Proptech. And if you’re an active follower of the quickly evolving Canadian property technology space, my guest should be no stranger. I’ll be talking to Courtney Cooper about Canada’s Proptech scene, trends we are seeing coast to coast and prospects for the growth of the industry. Courtney is a principal at Alate Partners, where she helps identify and scale promising real estate technology companies, provides market analysis and due diligence, and manages relationships with industry partners. She works directly with Proptech companies and is a board observer for some of the biggest Canadian Proptech firms, including Lane, Branch, and Eden. In 2020, she co-founded Proptech Collective. More on that later. Courtney, welcome to REALtalk. Courtney Cooper (Alate): Thanks so much for having me. I’m excited to talk to you guys today. Brooks Barnett (REALPAC): Courtney, before we get into the formal part of our discussion, I wanted to ask about a dog that you had that act or acts like a beaver. Courtney Cooper (Alate): Yeah, we got Dallas in March of 2020. So Pandemic Puppy, as they call it. And we went to pick him up from the breeder. His given name was Super Beaver Mike. So the breeder thought that he ate like a beaver or something like that. But it turns out that he actually does love to bring home tons of the biggest sticks he can find. I would call them logs, so does have some beaver like tendencies. Brooks Barnett (REALPAC): Well, listen, Courtney, getting into it, I thought we’d start today with a little bit about Alate and then move to talk about Proptech Collective. So, you know, how did you start and move into the real estate space and what are you doing at Alate? Courtney Cooper (Alate): So we found Alate in 2018. So we’ve been investing for the last 2.5 years. It was Dream Relay Ventures. Relay Ventures is a large Canadian venture fund focused on that as more generalist focus. And they teamed up with Dream, who I’m sure your audience is familiar with, to focus on investing in real estate technology and anything that can help improve the build. Brooks Barnett (REALPAC): And Property Collective was born in 2020. That’s an initiative that I see some others from the industry are attached to. Can you tell us a little bit Protech Collective what you’re looking to accomplish there and how you’re looking to accomplish it? Courtney Cooper (Alate): We founded Proptech Collective, actually, out of another initiative called Women in Protech. We rebranded it in 2020. But this is something we’ve been working on for a couple of years. And really what we’re focused on the Collective is how can we bring together all of the right people that are in the room. Right now there’s a lot of amazing, amazing tech companies and tech entrepreneurs that are focused on building solutions. And there’s a lot of real estate companies and real estate associations that are working on innovation, but often times they’re not talking to one another. So really what we’re trying to do is create a platform where these groups can come together. And we thought a lot about this because there’s lots of great organizations like REALPAC, like ULI, NAIOP, so many others. And so what we’re hoping to do is be able to work with those groups that are mostly real estate focused and help bring in the technology perspective and some other groups so that we can work on solving better solutions together. Brooks Barnett (REALPAC): I read with great interest and congratulations to you and your team on the release of your first report Proptech in Canada – 2021 report. There’s a lot of really positive fanfare around that. I read the report with great interest. Why was it important for your team to start with the report and really do the mapping around the Proptech ecosystem in Canada? And how did you go about that work? Because, I would think that that would be such a monumental task, just trying to understand who all the players are and where they are. How did you do it and why did you want to start with this report? Courtney Cooper (Alate): So the report did start out of curiosity and interest. It wasn’t like we went about saying, hey, we’re going to go publish a 50-page report. I think that it was October or November of last year. And a couple of us were talking and we didn’t know the answers. How many tech companies are in Canada? Where are they focus? Which cities are growing? And so we just started out of curiosity to say, OK, let’s do an investigation and do some research into this. And then it grew and expanded over time. But I think that it is really important to be able to understand what is happening here, who the companies are, how many companies we have, and just create a baseline of knowledge, because right now the information is a bit scattered. I talk to you and to the team in our labs and asked does anyone have a list? Does anyone know? And there are lists that exist on Pitchbook and others, which is where we went to start our look as well. But we didn’t feel like any of them had the landscape mapped out in a way that helped us really understand it. So that’s where we decided to create our own. Brooks Barnett (REALPAC): Were you surprised that there were more than 300 Proptech companies in Canada? Courtney Cooper (Alate): I knew there were a lot. And I think that is a lot. I knew a lot of them, but I spent the last two and half years on this and there’s no way to know them all. One of the questions that we talked is how do you define Proptech, what is and what isn’t? We started from a framework that existed. So Tom Best publishes a US market map that’s similar to this one. And so that was the best framework that we had because it categorized companies in a way that was pretty easy to understand. So within real estate, what kind of technology helps you find properties versus evaluate, manage and then you utilize the assets? And so that’s the starting point that we used. And it’s not easy, though. Companies or companies are changing. A lot of these companies are early and they can fit into multiple categories or might change over time. So it’s a starting point and allows us to at least start to bucket where there is momentum and areas where there’s a lot of companies getting started or companies that are growing. Brooks Barnett (REALPAC): If you are following the space, you know that there are some around the world who have claimed in the past that there are in excess of 8000 or so tech companies now in existence. If Canada is around 310, somewhere in there, it is still somewhat a microcosm of the larger whole. But is it possible at this point to figure out what the Canadian impact on the Proptech movement is? Or is it still early in the ballgame to be able to make a comment like that? Courtney Cooper (Alate): So I think the ecosystem is still early and growing. We’ve got some great companies. We highlighted some of the biggest companies in the report. So means that, you know, like Sonder and Breather and Lane and others. So there’s a lot of great companies that are here, and the other ones that have grown more have a more global footprint at this point. But at the same time, there’s a lot of really amazing companies that are at that seed and Series A stage that are working with large real estate companies or building solutions so consumers can make it easier to buy houses, things like that. So there’s a lot that’s up and coming and that I’m excited about. When I look at this list, there’s a lot of companies that I think have the potential to have a huge impact. Brooks Barnett (REALPAC): I wonder if you can shed some light on the findings when it comes to the large corporates. And how they’re approaching the question of tech and innovation. Courtney Cooper (Alate): So we highlighted a few in the report and you can see on one of the pages we kind of mapped out the different categories that we have. And the one thing I’d say is I think every real estate company is doing something in the space. Some are more sophisticated and have clearer strategies. Others are just maybe partnering with different tech companies and still sort of trying to figure out what their strategy is. We saw a lot more sort of balance sheet investments prior to the pandemic. So having companies like Honest Buildings and BTS that got a lot of investments from Canadian companies and pension funds. There’s a number of them that have also supported smaller Canadian companies. I don’t know which ones are public, but we aren’t. We were seeing a lot more investment. Now I think companies and real estate companies that focus on their core business and they may still make some balancing investments, but a lot of them are thinking about how do they build an internal innovation teams or internal groups that focus on how do they work with these tech companies, how do they build sort of data capabilities and their own strategies? I think overall we’re starting to see just more holistic approaches where people are trying to figure out how Proptech fits into their strategy. And to me, it kind of is thought of as this thing over there. But really it’s technology that supports and enables your business. Brooks Barnett (REALPAC): The report talks a lot about the ecosystem and how strong the foundation, the Canadian ecosystem actually is. I wonder, can you share any thoughts on why that strength exists and what it is about the Canadian Proptech ecosystem that is so attractive for both companies that are from Canada and want to remain in Canada, but also companies from outside of Canada that are looking within our borders as a place to settle and grow. What is it that makes our ecosystem so attractive? Courtney Cooper (Alate): It always surprises me how big an impact the Canadian real estate ecosystem is. Ten of the top 50 global, institutional, real estate investors in 2020 are Canadian. Companies like Brookfield, Oxford, Tricon, Empire, Dream. There’s just so many incredible real estate companies that are based here and are thinking innovatively about their businesses and starting to adopt tech. So I think from that perspective, having just great customers who are both on the real estate side as well as construction. EllisDon, PCL, these are big customers that are really making an impact when they start to think differently about their businesses. In terms of the rest of the ecosystem: we are seeing Canadian companies grow here based on the access to talent, support for innovation, friendly immigration policies, health. And we’re starting to see Toronto and the rest of Canada become a destination for a second office or for even to found your company here, because it’s a great location. Just that sort of mix of having the right customers, the right domain expertise in the space, as well as access to talent friendly immigration policies and just the general support for innovation. Brooks Barnett (REALPAC): That’s very interesting. You talk a lot about talent. Do we have the pipeline we need on talent? Do we have the right skill sets generally to drive the industry forward to that next stage? I wonder if in a place like the GTA, obviously with the amount of universities and colleges that exist there, that answer probably is self apparent. There are much, much more parts of the property technology landscape that exist outside of the GTA. However, obviously, as we know through your report, do we have that talent pipeline nationally yet? Courtney Cooper (Alate): Generally, I think yes, I think we’re getting there like we are seeing that Proptech companies are located in five main hubs and it wouldn’t surprise you that it is the GTA, Vancouver or Montreal, Calgary, Kitchener or Waterloo. But we’re also seeing great companies get started out of Edmonton and other places in Quebec and in the Atlantic region. So I think that there are Proptech companies getting started everywhere. You talked about the education system and we have a very educated population and we’ve got tons of talent coming into the industry, both on the tech side and the real estate side. I think that there are still gaps and I don’t think this is a Canada thing. I think generally there are gaps. And we think about, OK, what is the future of real estate and how does technology help that and how does technology really help my business? So I get a lot of questions from senior people, even sort of CTOs and CIOs. How do we really think of AI and what does that mean and where can I use that in the business? Aa hard thing because people hear these words like big data, AI, blockhain, but what does it actually mean for me and what does that mean that I need to do differently or I need to learn? So I think that there is room on that side. What does technology actually mean and how can we use it? You don’t need to be experts and we don’t need everyone to be experts. Courtney Cooper (Alate): Like, I think the beauty is that the technology will make it easier and you won’t actually need to know all of these things. But there are some skill sets that I think that we’ll need to get developed and changed over time. And then on the tech side again, and this is part of the reason why we started Proptech Collective is there’s a lot of people that come into the industry and they are incredible technical talent. They’re really innovative thinkers. But real estate in construction – some of the reasons why is behind in technology are structural. You can’t just come in. There’s regulations. When you’re working with GCs, the government, real estate companies and owners and lenders, there’s a lot of people that are required to be coordinated. And so to change things can be difficult. And so I think that the domain expertise is really important. So on the tech side, it’s good to have new thinking and new kinds of ideas, but I think you need to pair that with people who understand why things are the way they are. And what are the levers that are that you are able to change and how you do that sort of quickly and efficiently. So I think that we’re getting there, but it’s that we need to keep working to. Brooks Barnett (REALPAC): Yeah, and the whole question about getting there, I think, kind of leads to people. We know one of the major takeaways from the report for me was that clearly the industry is quickly evolving and the speed at which innovation is taking hold is steady and only really picking up steam. We’re starting to slowly build and shape commercial real estate industry that is much more progressive and future focused. But part of that, I think, means recognizing that we have a lot more to do on justice, equity, diversity, inclusion and building a workforce in the industry that is much more diverse than it ever has been. So my question is really about Proptech and that greater JEDI movement. Do you see ProTech factoring into that? I think about the people attached to some of the start-ups and ventures, incredibly diverse group of professionals that are connected to Proptech. Is that the opportunity in terms of diversity in the industry or one of them? Courtney Cooper (Alate): So I think that a lot of people who are going to work at tech companies, especially if you’re making the leap to work at a new company, something that’s fast growing – you have to believe in the mission. You have to believe that it has in it that this company can be grow big and make a lot of money and solve real problems. But you also need to believe in the founders and the team and the solution. So I think that that’s why a lot of times tech companies, they attract that kind of energy and talent. And so we’re seeing sort of more diverse talent. And a lot of these companies, tech still has diversity issues. I do think that’s changing. I think that there’s a big push towards ESG and particularly on the environmental side, but also how do we create better cities, more affordability or inclusivity? So I think that it plays a role, but not alone. I think that there is the Black North Initiative. There is DMZ has other initiatives. So I think there’s a lot of groups that are really thinking about how do we add more diversity into the real estate industry. And then on the other side, real estate impacts every part of our lives. It’s the places where we live, in the places that we work, it’s the construction process. And building operations has a big impact on our environment and climate. So I think that Proptech or the real estate technology ecosystem can support the goals of the real estate companies have around ESG and diversity, but it’s got to come from everywhere. Brooks Barnett (REALPAC): Courtney, thanks so much for joining us today and talking about innovation in real estate. I’m already looking forward to our next talk when we can look back at 2021 and see how far Proptech in Canada has grown. Courtney Cooper (Alate): Thanks so much to Brooks, Michael and the whole REALPAC team for having me today. Michael Brooks (REALPAC): Well, this is Michael Brooks and that’s it for this week’s episode of REALtalk. Be sure to visit us at Realpac.ca/REALtalk and subscribe wherever you get your favorite podcast. If you have an idea for a topic or a guest, please send me an email at email@example.com. And if you like what you hear, give us a five-star rating. Thank you for listening and tune in next time.
18 minutes | Mar 5, 2021
REALtalk – with Toni Rossi (Infrastructure Ontario)
On this episode of REALtalk, Toni Rossi, President, Real Estate Division at Infrastructure Ontario, joins REALPAC’s CEO Michael Brooks and COO Carolyn Lane, to talk about choosing a career in real estate, being a woman in commercial real estate, professionalizing government real estate, and Equity, Diversity and Inclusion initiatives. The episode covers: Toni’s journey to joining the real estate industry Lessons learned from the sporting world Public sector real estate mechanics How to thrive in a male dominated industry How to bring others along: ensuring an equitable approach Professionalizing Government real estate Being the first woman Board Chair at REALPAC About Toni Rossi: A 30-year real estate professional, Toni Rossi leads the Province of Ontario Real Estate Portfolio – one of the largest in Canada – and served as Infrastructure Ontario’s (IO) Interim President and Chief Executive Officer. Toni was also President of IO’s Lending Division and a key member of the Executive Team merging the Ontario Realty Corporation and IO in 2012. Prior to joining IO, Toni was with Oxford Properties and Cadillac Fairview. Having her ICD Designation, Toni shares her knowledge and experience with industry and community. She is a Director for Habitat for Humanity Canada. Toni also served as Board Chair for Habitat Toronto, was the first Chair of the largest Canadian Women Build and the inaugural Board Chair for a Canadian Olympic Athlete’s Fund, ULI’s Women’s Leadership Initiative, was Board Director for Toronto CREW, and a member of Toronto’s Legacy and Toronto CivicAction committees. Toni currently serves on Ryerson’s Realty Advisory Board, ULI’s Advisory Board, co-chairs the Federal/Provincial/Territorial Realty Committee, co-chaired the 2017 Toronto Real Estate Forum and is Chair of the REALPAC Board. Podcast transcript: Michael Brooks (REALPAC): Hello everyone, thanks for listening and welcome to REALtalk, the show that brings you unique insights from leaders in Canadian and international commercial real estate. I’m Michael Brooks, CEO of REALPAC. Michael Brooks (REALPAC): I’m pleased to welcome Toni Rossi to REALtalk. Toni is the current President, Real Estate Division of Infrastructure Ontario, where she has been for the last 10 years, maybe 13 if you add in the Ontario Realty Corp experience to it. Before that, she was Director of Development for two years at Oxford, and before that, a 17 year stint with the Cadillac Fairview Corporation in three roles as General Manager of the TD Center, as Director of National Operations, and as Director of National Marketing. Quite a tour of duty there. She’s a past Director of Toronto Crew, a co-chair of the Women’s Leadership Initiative at ULI and is a Director at Habitat for Humanity Canada. Michael Brooks (REALPAC): Fun fact. Toni was a professional beach volleyball player, as was her husband. But most importantly, Toni is our current REALPAC Board Chair and our first woman Board Chair ever. Welcome, Toni. Toni Rossi (REALPAC): Thank you, Michael. Michael Brooks (REALPAC): I’m also pleased to be joined today by my colleague and co interviewer Carolyn Lane, the Chief Operating Officer at REALPAC and the Vice President of Member Engagement. Welcome, Carolyn. Carolyn Lane (REALPAC): Thank you. Michael, I’m happy to join you today. Michael Brooks (REALPAC): All right. Today, Carolyn and I will be talking to Toni about her journey from the sand to the bricks and mortar, a career in a male dominated business, Canadian commercial real estate. We’ll also talk about themes of bringing others along, which we’ll explain as we get into the discussion, the lure of public sector real estate and Toni’s view of the way forward. So with that, let’s get started, Toni. Question on top of people’s minds, how does one jump from playing beach volleyball on tour to a career in commercial real estate? Are there any parallels between the two? Toni Rossi (REALPAC): Yeah, well, you know what? Before we get anyone’s hopes real high, the tour that we had when I was playing beach volleyball years ago was a very small one today. Today, the tour is huge. But so it was, I’ll call it an extracurricular. I love sports. I’ve always been a sport individual. You can call me a tomboy from the get go. So I spent a lot of time as a kid playing in every sport possible, spent a lot of time in high school. I went to an all girls school, so I was on every team. And fun fun fact as well, I wanted to be a lawyer, believe it or not! But when I was in high school, I had a lot of my teachers saying to me, don’t waste your mind. Why would you ever want to be in sport? So being a little bit of a rabble rouser, I ended up not going into law school. I ended up actually taking science and kinesiology at the time. It was physical and health education. But but at UFT which which truly helped. If I take a look at all of the things that I had done from a sport perspective in what I am doing today, it truly helped in all of the elements. It helped with respect to, you know, how I lead the team that helped with respect to including people. It helped with respect to helping your teammates and working as a team always in getting the best results. It was always excellence driven and very focused, as in making sure people bring their best self and and support brings that out in people. Michael Brooks (REALPAC): Carolyn, over to you. Carolyn Lane (REALPAC): Thanks, Michael. OK, so, Toni, during your career, you’ve been in the private commercial real estate sector and in the public real estate sector. How do you manage your career in what has been and largely still is an industry dominated by white men? Toni Rossi (REALPAC): I guess I have to step first and say I actually have a ton of respect for old white men. I’ve lived with them. I grew up with them, and I spent all my time around guys. And I talked a little bit earlier about being a tomboy. Well, I’ve had a great role modeling right through from my dad to my brother, who really exhibited an ability to actually include women. So my dad obviously coming as a young man over to this country and starting with nothing, building a great home. And my love for real estate probably came a little bit from my dad in his ability to make a home, the place where people gather to understand what it takes to build equity. My brother is almost seven years older than I am, and maybe I got my love for sport from him, and he would be always playing with the guys, street hockey, basketball, you name it. And of course, being the annoying little sister that I was, I constantly would be at his coattails and never let him go at anywhere without me tagging along. And I would find myself being the only girl ever going out at one point after three, four or five, six times going out and watching and cheering and doing everything you could. Somebody didn’t show up, so I got the honor of actually being shoved in for one of these games. And I think I surprised not only myself, but I surprised all the guys that were playing hockey that day. What I found was, as I became part of that group, in that team, conversations occurred and and inclusion occurred. And then the following year, I found other brothers had their sisters coming. So we really had almost the makings of a beginning of hope and inclusion and diverse group on our street. Toni Rossi (REALPAC): And I think that to me has helped me along the way, both in the real estate world in my career, I’ve always found myself being at boardroom tables, normally with men older than I was, and always found myself being very curious, being very respectful, but also just doing the work and wanting to be at that table. So my career has certainly benefited from a ton of great guys. But probably my love of real estate, funnily enough, has come from a great woman. My grandmother on my dad’s side was the sole survivor of 11 children and so found herself to have land. And she would always talk to all of her grandkids. I thought she gave them all the same advice. But I find out later that the advice that she gave to me was only to me. And she would say to me, look, I may not have been the prettiest woman in town, but boy I had land and I had brains. And because I had land, I had a choice. We’re talking early nineteen hundreds in a small town in Italy. And my grandmother happened to be one that had choice of her future because she had land. So she instilled in me right from the get go, you know, the desire, the love of land and real estate. And then it was blessed with having just great people around me my whole life. Carolyn Lane (REALPAC): Well, that’s great, Toni. Thank you. Those are those are excellent stories. Michael Brooks (REALPAC): Yeah. One of those stories kind of ties into one of the other themes, the idea of bringing others along. What does that mean in the context of being a woman or indeed any visible minority in commercial real estate? How do you bring others along in this industry? Toni Rossi (REALPAC): Well, I think, again, when I started in my career, there wasn’t a lot of women in senior roles, period. There was a few. There always needs to be someone that is first. And the one that is first is an incredibly important individual. But what’s more important is that first can’t be last. So I would say part of the the important thing for bringing people along is making sure that you’re not the only, making sure that when you are the first at something, you then find ways to bring others in. So if I was the first at the hockey for REALPAC, as we all know, being the first female chair – I wasn’t the first on the board, but certainly the first afterwards – and made sure that we spent time to make sure that I’m not the only. So as you both know as well, now we have the first female vice chair, but thankfully not the only female vice chair because Natalie is now in play. And I may be the first female chair, but I’m confident I won’t be the only. So I think it’s very important that truly, when you bring others along, no one does get left behind. Michael Brooks (REALPAC): Yeah, that’s great, that’s a great phrase, “you can be first, but make sure you’re not the last”. Carolyn over to you, Carolyn Lane (REALPAC): Toni. I’m going to go in a little bit of a different direction now. So working in commercial real estate in the public sector is probably not that well understood by most people in the private sector. So how important is professional public real estate management? And is Infrastructure Ontario a model for other governments? Toni Rossi (REALPAC): Yeah, that’s a great question. So, I think real estate in general is the backbone of almost a lot of things that most businesses and certainly from our perspective, what we do. But there is not a lot of difference in public and private sector, but there is a fundamental difference in that in the public sector. Real estate tends to be used for program delivery or tends to be used for a reason of executing on taxpayer dollar. So by way of example, obviously there’s a lot of crown lands that are out there that are used for courthouses, jails, hospitals, schools, you name it. And in many cases, it’s not the same return on investment that we all look for when we’re doing a real estate deal and holding real estate holdings. But what I have found the importance of public sector real estate is especially now with the amount of need that most jurisdictions, whether it’s in Canada or across the world, there is a huge need of public sector delivery programs. And the bubble hasn’t really dropped or the nickel hasn’t dropped for people in that the actual holdings that most crown have is land. The holdings that they have and they’ve used over time is land. But it’s a huge deficit for a lot of governments because they haven’t actually looked at a lot of their real estate in the same way that a private sector, a real estate company would to be able to value it in a different way and then obviously sell it. Governments sell their land when they are no longer needed for those program purposes. So most of the holdings that governments have is because they’re needed. But over time, if they don’t need them, the surplus lands come up. How do you value those surplus lands? How do you appraise them? How do you actually work through the whole process to get them ready? Even a zoning process, value enhancement, find a way to get them ready to go out for sale so you get top dollar to invest, which is what we would obviously do in the private sector and what is occurring now in most public sectors. But I would say IO through or see at the time and then when we merged with IO, IO takes a full lifecycle view of the asset, kind of like what a private sector real estate company does. And that full lifecycle view includes the front end of what is the need, who’s the client, what does the tenant need, what does a future client for a piece of land want, how do we actually broker that deal so the client gets whatever that need is? That’s the same in public and private sector. Michael Brooks (REALPAC): Great. Thanks, Toni. Let’s finish off with a final note. What’s the way forward for CRE in Canada? What’s important in the near term for the industry, public or private? Toni Rossi (REALPAC): You know, this is where I think REALPAC actually just stands out and where we have an important opportunity here as leading in not only in the real estate sector, but perhaps leading across in helping a number of fronts. So to me, one of the big areas that I care a lot about and I know REALPAC does as well, is certainly on the on the Equity Diversity and Inclusion initiative. I think it’s interesting, as we are in this COVID world right now. COVID I think is going to be the great equalizer. And it’s been difficult over this past year for individuals to really be able to do things from a physical perspective. But what is occurred is all of the various Zoom calls, as annoying as they have been, have been pretty amazing. When you think about how individuals who normally have not been at the forefront, who normally may not have been in meetings, and I would say to you in many cases it tends to be women or it tends to be those that are underrepresented are black or indigenous or BIPOC community. COVID has actually found a way to include. And I think I think that’s a huge message and mantra for us at REALPAC to take that. I’ve been very, very impressed with what we’ve done, frankly, at REALPAC over the last number of years in helping to lead the EDI area for our industry. Toni Rossi (REALPAC): When you look at the ability to attract and retain people to an industry that is so important, getting the best minds come from diversity of thought and come from diversity of backgrounds and so we looked at our policies, we looked at our bylaws, we looked at what the barriers were that were potentially not allowing something as small as the REALPAC board to not have women on it. And we changed them. And so here we are three years later from no women as an example on the board to four. From no youth, we’ve got a few younger board members. And I think our next big opportunity is making sure that we start to reflect on that board and others, the fabric of our country. We’re seeing that’s obviously even at IO. I am very proud of the work that we’re doing at IO on the EDI front and trying to get an equity, diversity and inclusion individual into our company. We spent these past years, as I’m sure many other real estate organizations have done, to make that forefront. So spending a lot of time on this particular initiative, because I think it is actually the baseline and the fundamental and just where we need to start for the next big wave in our industry. And I’m thrilled that REALPAC is taking that lead and I’m thrilled to be a part of that. Carolyn Lane (REALPAC): Thank you so much for sharing your stories, Toni. You know, seeing is believing. When women and people from underrepresented groups see others like themselves in leadership positions, they’re more likely to get inspired, to imagine themselves in those roles, believe that they can achieve it and put themselves forward. And you’re clearly a leader that others can look to for inspiration. So thank you. Toni Rossi (REALPAC): So, Michael, Carolyn, look, I’m really, really thrilled. Thank you so much for having me. I am thrilled that the commentary that we’ve had today has allowed us to have, you know, a female co-chair. And you, Michael, today in the podcast, grateful that I had the opportunity to share some time. Michael Brooks (REALPAC): Well, this is Michael Brooks, and that’s it for this week’s episode of REALtalk. Be sure to visit us at realpac.ca/REALtalk and subscribe wherever you get your favorite podcast. If you have an idea for a topic or a guest, please send me an email at firstname.lastname@example.org. And if you like what you hear, give us a five-star rating. Thank you for listening and tune in next time.
19 minutes | Feb 17, 2021
REALtalk – with Michael Turner (Oxford Properties Group)
On this episode of REALtalk, Michael Turner, President of Oxford Properties Group, joins REALPAC CEO Michael Brooks to talk about leading a global organization, corporate culture and management style, and COVID acceleration and reversal. The episode covers: Stepping into the President’s role at Oxford Leadership, culture and management changes prior to COVID How COVID impacted change at Oxford Michael’s evolution as a leader Technology as a differentiator at Oxford: objectives and measuring success COVID acceleration and COVID reversal How prudent investors should approach various asset classes Investment focus and overall vision for Oxford moving forward About Michael Turner: Michael Turner is President of Oxford Properties, a leading real estate investor, developer and manager, and Global Head of Real Estate for the OMERS pension plan. Michael is Chair of Oxford’s Executive and Investment Committees and is responsible for the overall leadership and strategic direction of the global team and $60 billion, 100 million square foot business. Oxford creates financial and social value by building communities and connecting people to exceptional places with best-in-class investment and operating platforms that span real estate asset classes and the entire capital structure. The Oxford banner operates in nine countries across four continents, and the company’s subsidiary platforms including IDI Logistics in the US and Get Living in the UK further extend Oxford’s reach. Michael joined Oxford in 2010 to lead the investment team. He subsequently took on leadership of the Canadian office and retail businesses and following that led the entire Canadian business before being appointed to his current role leading the global business. Before joining Oxford, Michael spent 12 years at a leading global real estate investment service provider. Michael has lived and worked in Canada, the US and the UK, and has led teams, completed transactions and built businesses across four continents. Podcast transcript: Michael Brooks (REALPAC): Hello, everyone, thanks for listening and welcome to REALtalk, the show that brings you unique insights from leaders in Canadian and international commercial real estate. I’m Michael Brooks, CEO of REALPAC. I’m pleased to be joined by Michael Turner, who is the president of Oxford Properties Group, the captive real estate entity of the Ontario Municipal Employees Retirement System (OMERS). Michael is ex of a global brokerage, CBRE, where he worked on some of the biggest deals in Canada during a 12 year career. He has a B.A. from UBC, a Master’s of Urban Planning from Queens, and a Master of Finance from Rotman. He’s a CFA: well educated Michael! OMERS has a 60 billion dollar global portfolio of real estate assets under management. He’s managing 2200 people operating out of around 70 offices (from 2020 data, though I’m sure this changes from time to time). Oxford had quite a run in 2020, with it being named to Fast Company’s world’s most innovative companies, named IPE RE’s Investor of the Year had four of its resort hotels named to Travel and Leisure’s Top 10 list, as well as a lot of milestone developments from London to Sydney. Real estate is cool at Oxford. It’s the #OxfordWay. Welcome, Michael. Michael Turner (Oxford Properties): Well done and thank you. And you’re very generous both with your characterization of me (I think you’re too generous) and of Oxford. And if this podcast doesn’t work out for us, I’m sure there’s an opportunity with our marketing and communications team with a lead in like that. Thank you for having me. Michael Brooks (REALPAC): Ok, I’ll dust off my CV. Let’s let’s get to the questions. So you’re over two years into the president role at Oxford and boom, the pandemic hits. What changes were you implementing internally at Oxford to its culture and management style? And why and how did the pandemic affect those changes? Michael Turner (Oxford Properties): Yeah, thank you for the question. I want to start by saying I had a lot of great tools in the toolbox to work with. Oxford is now a 60 year old business. And I think it has and had at the time a terrific culture. So having said that, every new leader puts their own stamp on things. And Blake, as CEO of Oxford, you know, Michael, he had a very successful C-suite that were his running mates for the better part of a decade. So one of the most important things that I had to do was manage a generational succession of the entire C suite of Oxford. And that took me a little over two years to do, took about two and a half years. So I was quite down that journey. And as the leader putting in place that succession and setting up the business for its next decade of success is probably one of the most important jobs and contributions I had to make. And I wanted to make sure that we reflected a diverse set of backgrounds that is more reflective of society and that our leadership team also reflected the global footprint that Oxford had become over a decade period, that it wasn’t originally. But it clearly, by the time I had the opportunity to lead the business had become a global business. And I wanted its leadership team to reflect that as well. So that is a major change that we were underway. I think culturally, we’ve always had a winning culture focused on stewardship and service excellence. So do not disturb those things. And I did want to add a little more emphasis around the areas of agility, flexibility and scalability because the business is just different. It was no longer the Baker building that started in Edmonton. It’s, as you described, a big global business in a fast changing world. And so I wanted to bring a little more emphasis to that as part of our culture and our our journey. Michael Brooks (REALPAC): So much of your career, you’re still a young man. You’ve been led, but now you have to be a leader and now you have this pandemic thrust upon you. How do you think you’ve changed as a leader over the period of time you’ve been running Oxford? Michael Turner (Oxford Properties): Yeah. So I’m going to give myself a little more credit because I had led divisions of businesses or large components or countries before. I’d never led a global business in each one of those leadership challenges were an opportunity to learn and to improve my own self awareness and make mistakes and get better. So when I originally came to Oxford, I ran the investment function and loved being surrounded by Type A personalities that would work until obscene hours in the night and all weekend and a few years into my career at Oxford, I was asked to take a large operations role and I did that for many years and it included the better part of two thousand employees. And that was my first opportunity at scale of understanding that I was not the subject matter expert. And in fact my own success was entirely dependent upon others and had nothing to do with my own abilities in any one domain. That’s just to say, Michael, I’ve had some practice and had some opportunities for experience of leading people and leading different types of groups at scale for for many years of my career. And this was different. Michael Turner (Oxford Properties): So the pandemic didn’t happen immediately. It happened after I was a few years into leadership succession, changing some reporting lines, critically enabling technology to allow us to operate remotely like this. And I was also accustomed with a distributed leadership team myself to be able to work with a group that wasn’t always in the same place at the same time. That’s just to say, I think I was lucky when this pandemic came and had a pretty good starter set. Thinking about your question, I’m not really sure I can answer it specifically around how the last short period has changed me as a as a person. I have changed in the last decade as compared to when I came to Oxford. When I came to Oxford, I had no kids. Today, I have three kids. We all experience our own growth. And that started from a Toronto employer, went to a Toronto based employer with a Toronto mandate. And now I have a global mandate and have been around that journey of Oxford’s global expansion for many years. So that’s contributed to my my own perspective as a leader. And I’ve had lots of crises in operations and in other areas along the way. You are right: this was the first time I’ve ever experienced a global crisis everywhere we operate all at the same time. So I think the breadth and scale and just the magnitude of unknown and pressures was it was a very difficult period for all of my team. And I think grit and innovation got us through to where we are today. And I shared with my leaders we we have a much better leadership team now because they’ve gone through a once in a generation crisis and they have tools in the toolbox that I don’t think they ever thought they would develop. So I’m not sure if I really answered your question. I’ve sort of given you a bit of a journey there in my own experience. Michael Brooks (REALPAC): No, it has. I mean, it’s a journey for everyone. I think in those in your position and the fact that you’re open to learning and continuous learning to me is terrific. The technology piece is interesting. You mentioned that that early focus on technology you think helped Oxford be better positioned going into this this pandemic. Why did you think to focus on that as a key Oxford objective from day one? How will you measure success for that going forward? Michael Turner (Oxford Properties): Right. So one of the things I share with my team just to try and simplify things and I don’t know how to fill in the blanks, so I put out the ideas, I call it go to 4.0. And I’ve always had an interest in technology, Michael, from the perspective of I’m interested in change and I’m interested in innovation. I’m not particularly interested in gadgets and technology as an engineer may be passionate about it. I’m passionate about it in terms of how how you can make life better or how you can reorganize things to have a step, change innovation and outcome. And I’ve always thought that every day you and I go to bed, there are literally now thousands of people around the world waking up and trying to figure out how do they disrupt us. So we better understand that and embrace that, because if we don’t, we’re going to be surprised by technology’s impact on us and it’s unlikely to be a pleasant surprise. Michael Turner (Oxford Properties): So that’s how I’ve approached the embrace of technology from a mindset as opposed to gadgets for their own sake. And I’ve thought about it for Oxford in two ways. First is technology’s impact on the forces that are tailwinds or headwinds to real estate. So Airbnb competes with hotels that we own. We should understand that. What does that mean? Or Amazon is a huge tailwind to our warehouse business. We should have a view on that. Should we express a view with more capital in one thing over another? So I think about technology and its impact on real estate. The other way I’ve thought about technology is how we can be a better company and how we invest, develop and manage by embracing technology. Michael Turner (Oxford Properties): And we’ve done that. I could give some specific examples like we you know, we have rolled out and use View the Space as our primary revenue tool, which is more newer to Canada, but quite well developed and embraced in cities like New York. And will, I think, in my opinion, be the leading revenue management tool around the world, things like pro core we have on board for construction management. These tools are highly scalable for us. They’re repeatable in almost every jurisdiction with some changes and they require an enormous amount of change management and skills to be able to enable them. Otherwise, they just become another gadget and they don’t transform your company. So the purpose, Michael, to engage technology is just how do we build a better business and how do we add more value to our customers and how do we be more thoughtful and how we invest, manage and develop. Michael Brooks (REALPAC): To me, those themes tuck under a resilience and adaptability and future oriented, which are terrific. You and I had a discussion on our pre call about looking at property markets, at the strategy level those. In the COVID acceleration trade and those in the COVID reversal trade, which I thought were very interesting turns of phrase, which asset classes are which in your mind and how should prudent real estate investors be playing one of those two markets? Michael Turner (Oxford Properties): Right. So I’ll just start sort of foundationally, you know, when I used to acquire assets and as an investor in terms of an acquisitions person or operating things, I thought about the world from a very asset and building centric paradigm. And it’s no longer I can’t do that anymore because that’s not scalable. We have four hundred assets, 100 million square feet, and there’s all kinds of particular noises in there. And I try to pick up what’s the signal versus the noise. So we’ve evolved how we think about and characterize our portfolio so that we are more thematic investor. And what I was referring to you, Michael, is I said there’s two trades right now. There’s the COVID acceleration trade in the COVID reversal trade. In the COVID acceleration trade were things that we had identified that candidly we were short on. We thought we had time to express a longer view and make some more money in warehousing and the impact of e-commerce on warehousing. As an example, digital adoption and the impact that that has as a tailwind at data centers, the convergence of technology and aging society and health care, and how that’s a tailwind to life sciences. So these were all things we were expressing a view on because they thought that they would. Our view was they will grow faster than on average the other parts of the real estate sector. And we should express a view there. All of those trends accelerated under COVID. You’ll see that in our results and our competitors and peers results. You’ll see it in the MSCI data. You see it in the public markets. It’s very clear that this pandemic, while it’s global, its impact is not being felt evenly. To some folks it’s being a huge enabler and to others it’s being a big disabler. So that’s what I call the COVID acceleration trade. Later, there will be opportunities in the COVID reversal trade. Right now I’m in the office. You’re at home. There’s not very many employees here with me on the floor. That’s not going to be the case forever. People will come back to offices. That’s my view. That’s not because we own them. That’s just because I believe that fundamentally we’re going to travel again. We own a bunch of hotels. We will own more hotels. And that enablement of being able to travel and go somewhere on a business trip or with your family is going to be a contributor to COVID reversal trade in hotels. Household formation has slowed a little bit. We see it in single family homes, but in the residential rental side, in cities around the world, we’re seeing fewer people moving into rental apartments. Immigration’s down. Students are living in their parents basement instead of taking that apartment on Bay Street next to you, what that’s all going to reverse. So those are examples of the COVID reversal trade. And each one represents both risks and opportunities. Michael Turner (Oxford Properties): And we’re just trying to position ourselves to make a great contribution to OMERS and its need to pay pensions over the long term. And we’re playing both of those. But at the moment, we’re still trying to get longer the COVID acceleration trade. And later we’ll go back to the COVID reversal trade. Michael Brooks (REALPAC): So let’s look ahead. Five years from now, hopefully the COVID reversal trade has been evident at that time and you are still riding the tailwind of the COVID acceleration trade. I hope it’s gone in five years. You know what? What’s your vision for the company look like five years from now? I mean, you’re already a global company already and multiple asset classes. Where do you go from here? Michael Turner (Oxford Properties): Well, you might have seen recently we had an announcement where we bought a business in Europe called M7. So it’s a Pan European warehouse specialist. They have over 200 employees, a terrific track record as an originator and an asset manager and an investor. Last year, we bought a business in Australia called Investa. It’s sort of the Oxford of Australia in terms of it’s a great office company, developer, asset manager, operator and a fund manager. It has a large fund management business. And we see a real opportunity as the alternative space consolidates, that we have a role to play in that in terms of buying vehicles where our capital can accelerate their growth, where we can use these vehicles to more efficiently deploy OMERS capital than we could just sort of one building at a time. And I think you’re going to see us do more of that. We’ve also aeen the real benefits, Michael, in getting out of people’s way that run these businesses, but sharing best practices and accelerating learnings around the world. And some of the investments that we’re making in technology will be scalable across many of these platforms because we’re trying to solve the same problem at Oxford in terms of how do we lease, how do we onboard a customer, how do we manage a building remotely as they are in Australia with Investa? So why don’t we share ideas and invest in scalable technology to allow each one of these businesses to be, you know, more effective? So I think you’re going to see us build out more of these platforms. There are very efficient vehicle for Oxford to deploy, as you called it, you know, OMERS captive capital. And over the years, we’ve increasingly had large co-investors that we manage on behalf of want more access to the strategies we have. They like our governance, they like our alignment of interests, and we will similarly offer the opportunities for them to put their capital through these vehicles. So I think you’re just going to see more of that from us over the years ahead. And we’re pretty early in that journey. And I think that will be a more mature understanding of Oxford down the road five years from now. Michael Brooks (REALPAC): Michael, I think that the pensioners of OMERS are fortunate to have you as the President of Oxford Properties Group. You are a terrific leader and we look forward to hearing more from you on your journey as it goes. So thank you, Michael Turner, President of Oxford Properties Group. Michael Turner (Oxford Properties): Michael, thank you. And your words are so generous and kind. I’m going to invite you to speak to our people any time you’d like. And anything we’re doing, we’re sharing our story. I’m going to ask you to both introduce us and close. Thank you for your leadership at REALPAC. We do appreciate everything that you guys are doing in terms of managing our industry and our stakeholders in the leadership you and your team are showing as well. So thank you. Michael Brooks (REALPAC): Well, this is Michael Brooks and that’s it for this week’s episode of REALtalk. Be sure to visit us at realpac.ca/realtalk and subscribe wherever you get your favorite podcasts. If you have an idea for a topic or a guest, please send me an email at email@example.com. And if you like what you hear, give us a 5-star rating. Thank you for listening and tune in next time.
23 minutes | May 15, 2020
REALtalk – with Blake Hutcheson (OMERS)
Blake Hutcheson, President and CEO of OMERS, joins REALPAC CEO Michael Brooks to discuss the future of commercial real estate in the aftermath of COVID-19, the new normal, and the status of each asset class across commercial real estate. Blake was recently named the President and Chief Executive Officer of OMERS (effective June 1st, 2020), one of Canada’s largest Pension Plans with over $110 billion of equity. Their conversation covered: The difference between the current COVID-19 crisis and previous crises The abnormality of the “new normal” The role of the government during this crisis Winners and losers across asset classes The sport of lacrosse!
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