Investing in Real Estate; A Global Perspective with Colin Lynch | EP86

52m ·

Investing in Real Estate; A Global Perspective with Colin Lynch | EP86

Colin Lynch os the Head of Global Real Estate Investments at TD Asset Management.
Colin is responsible for Global and Canadian Real Estate Strategy, overseeing fund design and structuring, implementation and oversight of acquired assets for the Global Real Estate Strategy. In this role Colin manages Investments in over 1000 properties located in over 20 counties worldwide.

In this episode we talked about:

 • Colin’s Bio & Background
 • Financial Crisis
 • The Canadian Market from a Global Perspective
 • Post-COVID Real Estate Market Overview
 • Pricing & Affordability
 • Effects of Inflation
 • Commercial Real Estate Culture
 • Mentorship, Resources and Lessons Learned

Useful links:


Jesse (0s): Welcome to the working capital real estate podcast. My name is Jesper galley. And on this show, we discuss all things real estate with investors and experts in a variety of industries that impact real estate. Whether you're looking at your first investment or raising your first fund, join me and let's build that portfolio one square foot at a time. Ladies and gentlemen, welcome to working capital the real estate podcast. My special guest today is Colin Lynch. Colin is the head of global real estate investments at TD asset management.


Colin is responsible for global and Canadian real estate strategy, overseeing fund design and structuring implementation and oversight of acquired assets for the global real estate strategy. In this role, calling manages investments in over 1000 properties located in over 20 countries. Worldwide. We just updated that now. Colin, how's it going


Colin (53s): Kid. Good. Thank you for having me here.


Jesse (56s): Thanks for, thanks for being on the show. I'm really excited to talk with you today. I think there's a number of things that we'd like to cover, but before we do, as with every guest that we have on the show would love to get a little bit of more information on your background, how you got into real estate. We talked a little how it was a bit of an unconventional approach or entrance into real estate. So take us back, take us back and give us a little bit of a, of your background.


Colin (1m 23s): Absolutely certainly unconventional approach to real estate. So first things first, I actually grew up as very much into music as a musician. And so I was one of those children that was in every sort of music class. By the time it got to high school was performing in a ton of ensembles through the, by the a hundred concerts a year, got to the end of high school, said time to explore something else.


Cause I figured I, I had learned all that I could possibly learn in music, which was incorrect, but I figured I'd at least explored app. And so I went into a business and history. So I did three things in undergrad. I did the world concerned for a music. I did a bachelor of commerce at Queens, and I did a bachelor of arts in history at Queens. And, and then, you know, graduated and it was the heyday of the leveraged buyout, boom. And my mom who said, I was way too all over the place said, you got to get a skill.


You've got to focus and you should go work for those banks because they never run into any issues, their board to stability. And so that's what I did I do to fleet, went out to investment banking and went to Morgan Stanley and got to experience the global financial crisis front and center. Ben went to, went to, to business school. And throughout that entire period, this is where you expect me to say, I had that passion for real estate, which I do, but I also had a passion for commercial aviation.


So joined McKinsey and company in Chicago, but reality was all over the world, did that stuff. And after traveling all over the world, I said, look, that's fantastic, but I'd like to come back to a city I love and a nation I love and that's in Toronto. So I did that and this is where the real estate part comes in. I had been very interested in, in a lot of political activities. And so in 2014, in January, 2014, somebody that couldn't get elected asked me to help him.


And that was the John Torrey mayoral campaign here in, in Toronto. And so 10 months later he was mayor. He asked me to work for him. I said, no. And through that conversation set of conversations that got introduced to this firm called Greystone, a firm that I had never heard of before. And, and after about a year of conversation, Greystone asked me to join. So initially I joined in strategy working for effectively the C-suite and, and then that turned into moving into the real estate world.


So that's a long way of saying I had a very unconventional introduction to the world of real estate, but it was, it was a fun story to, to live through.


Jesse (4m 26s): That's great. So in terms of the, the financial crisis component of that was that you were still a at Morgan Stanley at that, at that time. And if so, what were you doing? What were you doing for them there?


Colin (4m 38s): Yeah, I was doing a number, number of different things. I, so I started started that Morgan Stanley focused on consumer retail and financial services. So financial sponsor stories. So serving pension plans who private equity firms in the light and then also timber companies. And then, and then as, as the financial crisis unfolded that broadened.


And I basically worked across firstly every street, but spent a bit of time in real estate as well. And then from a type of activity, as I mentioned prior to the global financial crisis investment banking was doing a lot of leveraged buyouts and throughout the financial crisis also worked on things like that or in possession financing for companies going through insolvency or worked on a few, reached a sort of a few IPO's did some M and a, but at the conclusion of my term at Morgan Stanley, the governor of the bank of Canada, Mark Carney at the time requested some help on the financial stability plan for Canada that was quantitative easing effectively in Trent and requests was help design a program for the bank to implement a quantitative easing.


And so that's what I did in the last sort of four months or so of my time at Morgan Stanley. So highly unusual investment banking experience for sure. A lot of industries and a lot of different types of activities that I participated in very much a function of the global financial crisis.


Jesse (6m 21s): Yeah, for sure. I mean, it's still topical, I guess even the current environment we're in now. So I think the, the idea of just the macro economic perspective you got, I don't think it's something that's too dissimilar to some of what we're doing right now from a stimulus and, and a quantitative easing perspective.


Colin (6m 40s): Very fair point. And you know, it's interesting because prior to this environment that we're in used to tell folks about that quantitative easing program, which the bank didn't actually have to implement. And the bank was here in Canada was one of the few central banks worldwide. They didn't have to implement quantitative easing well, fast forward to 2020, and we were pretty, pretty heavy on the quantitative Beason train. So, so, you know, it's things, things change and evolve over time.




Jesse (7m 11s): Yeah. Fair enough. So take us to, to the Greystone, to the actual foray into real estate, you know, what, what area did you, did you initially go into, and maybe for those that don't know a little bit about what they do?


Colin (7m 25s): Yeah, absolutely. So Greystone began as the investment management corporation of Saskatchewan. So 35 years ago, thereabouts, it was a department of, of the government and it was spun out from the government and became sort of like the investment authority for the province of Saskatchewan then became owned by pension plans. And at that point looked very much like, you know, the Aimco as an example, what the government of Saskatchewan said at that point, when they spun it out was after five years, the pensions could do whatever they wanted in terms of their investment management services.


And over time management bought out most of the interests of those pensions and, and that, that time Greystone had a very small real estate portfolio. It was a full suite, so public equities and fixed income, but also had real estate. And that real estate grew from about 200 million to on, on, by the time TD came around and bought Greystone in 2018, that real estate portfolio equity was about 16, 17 billion mortgages was around, I believe at the time about 4 billion.


And so it was quite the successful run and Greystone had become a name for excellence in real estate, both equity and debt, even though Greystone began and, and still had quite a strong public equities and fixed income side to it. And so like that, I joined Ray stone working with the senior team in, and once I did a number of things around reorganizations U S expansion, et cetera, I said, look, it's time to fire me because I'm pretty much done.


And then that, you know, originated into originate the conversation, which was, you know, do you want to be a coach, I E a manager, or do you want to be a player on the team? And I looked at that and I said, you know, what, why being a player on the team looks really interesting. And so that's the path I went down. And as we've looked at the different areas in Greystone and where my passion was, my dad grew up in construction. And so I grew up with, you know, floor plans, building plans, sorry, I'm on my, on my basement floor.


You know, I had a fascination for real estate. And so I thought that would be a cool place to be. And so my foray in was working on our asset management division. And so we created a real estate asset management division in house to do a bit of that work a bit on the office portfolio, in the industrial portfolio. And then, so I worked on that, that I was also asked to help co-create the international strategy, which was taking Greystone success that we had experienced over 30 years within Canada and, and expanding that outside of Canada.


And so I worked on those two initiatives and, and then the international strategy went from strategy to being a fund. And I went from creating the strategy to running the fund and then, and then that grew, and it was quite, it's been quite a successful ride. And then I was earlier this year, asked to take over the domestic portfolio, which is that portfolio that had been around for the, for the last 30 years.


Jesse (10m 55s): Yeah. So in terms of, in terms of going into the fund model, what was it prior to that? Was it, was it raising capital for asset specific and w like, what was that transformation like?


Colin (11m 5s): Yeah, so it was actually, so on the international side, it was literally building something from scratch. So Greystone prior to launching the international head, just domestic real estate. And it was a largely one strategy on the equity side and one strategy on the debt side, diversified across property types and by risk strategies and by geography and on international there's, there were a lot of investors con we call clients that were asking us, you know, why don't you have a strategy to invest outside of Canada?


And for about a decade, the Greystone response was we hear you, but we're focused on delivering great results in Canada. And so when I came around and said, look, I really am interested in, in, in being a player on the team versus the coach, they said, great help us solve this. And so we, we literally had a whiteboard. That's how we began. And we, and we designed ground up a single, comprehensive global strategy, investing everywhere from Australia to Europe, to the U S across all the property types and all of our strategies in all formats.


So it could be a fund investment or can be a JV, or it could be a club. And, and so we designed something with a tremendous amount of flexibility, which took a long time, but it was quite fun to be able to just literally create something from scratch and then, and then to actually build it, which, you know, you have all of the legal ramifications, regulatory ramifications fro in selling Greystone to TV in the middle of bad. And now you're pro you're owned by a traded bank and they've got their own regulations and then sort of, you know, build a track record and, and take that to the market and, and raise capital and, and deploy it.


So that's been, that's been the journey on the international side and it's definitely been interesting.


Jesse (13m 11s): Yeah, that is interesting. So we had a Michael Emery on the show a few months ago from allied REIT, and we know every time I have some Canadian Canadian guests that has started or work for a large Canadian real estate company, I always ask them the comparison to the U S or globally, where you have individuals playing in our backyard for a certain amount of time. And then I can imagine just like you're alluding to here, the regulatory environment, the probably the accredited investor differences and those kinds of complexities. Well, I'm sure there was a bunch of things that were challenging, but was there one thing or one or two things that was really one of the, one of the hardest parts about that transformation or about that ability to go from not just in playing in a Canadian market, but into a global space?


Colin (13m 58s): Oh, that's a good question. Certainly the regulatory dynamic is, is, is challenging. The European union, as an example, is a highly regulated regulatory construct. And, and there's a lot of rules around if you're marketing a fund, there's something called a passport and you sort of have to have this passport that applies to certain European countries.


We have a vehicle in Ireland called the ICAP, which Cyrus collective acid vehicle runs pretty akin to accompany. So with a legitimate board and, and, and all of the infrastructure service providers, companies that service that ICAP sending that up was quite, quite, quite the work, particularly as we're getting to the ninth ending of this, of this story, right, as COVID started. And so we sort of certainly felt the heat of regulatory concern just in general, as, as we were creating this as, as COVID habit.


So that's probably a little bit of a boring answer cause folks, folks, really, not too many people get up in the morning wanting to talk regulatory details, but, you know, we had eight, eight external law firms helping us around the world on, on that, on that point. And so, you know, the, the complexity of that I think was unexpected. I would say I'd stepped back from that and say, there's a cultural difference, you know, in, in the U S for sure.


You know, I think a bit more aggressive in Canada, we've got a smaller number of participants in the market that are fair. You know, quite a number are fairly well capitalized and have very long-term perspectives in terms of ownership, property. That's not uniform around the world. And certainly the U S is a deep and liquid place. And, and, and the regional variances are quite significant, but I think that broad sort of hates a little bit more aggressive is actually probably true.


I'd say the real estate challenge for us is there's just a host of participants worldwide. And so, you know, we're active in Australia, we're active in the UK, we're active in Germany, we're active in Japan and, and finding sort of like-minded investors across all of those regions. It's just a lot to learn a lot to introduce yourself a lot of introductions to make, and a lot of subsequent sort of conversations. And then you layer that on, into, into do that in the pandemic.


And, you know, fortunately we S we did maybe three years of those introductions and, and subsequent meetings, pre pandemic, but still we've, you know, we've had quite a number of those conversations. So layer on doing, doing that in a pandemic. And it becomes a quite interesting,


Jesse (17m 2s): Yeah, a little more challenging than, than any other time or most times in terms of, if we go there on that, you know, lockdowns the government stimulus, what we we've talked about before eviction moratoriums a lot has happened in the, in the last crazy to say almost two years, how has that perspective for you? And I understand it's a big question, but how has that, how has your perspective as a, as somebody that deals with real estate on a, on a domestic and global level, you know, how has your opinion of the market and asset classes changed over the last year or two?


Colin (17m 38s): Yeah, that is a big question. So generally put, I've been reminded of the ever present role of government in our lives and in particular in real estate. And I, and I don't think that can be overstated, right? So whether, you know, the, the eviction moratoriums, or simply put closing down a lot, a lot of the retail, et cetera, and that was a global story.


And, and going through the different government programs requirements, et cetera, particularly during the first two waves of COVID was, was an exercise. And, and there's things that we know about. So the shopping malls closed, et cetera. There were other things that got a bit less play, but were also meaningful. I E different requirements for international investors use Australia as an example, there were new requirements for international investors looking to bring capital into the market due to COVID.


So, you know, that, that was interesting now to real estate foundationally. I don't think COVID has changed my perspective on the different property types. So as an example, while located office and CPDs high quality had the view that if, you know, pre COVID, if, if you're making office investments, that's probably where you want to invest during COVID, don't have, I haven't changed my perspective on it, you know, has my overall sort of thoughts on office as a property type being tempered clearly.


But I, you know, I think you talk to folks and say, and what you hear is, you know, COVID, hasn't really changed their direction of travel. I think that's, that's largely the same for me. I do think on the retail side at some point. So I used the UK as an example, where we saw a lot of devaluation of retail. At some point, you hit the level where you say, you know, the land value is, is, is higher than what folks are sort of trading in the market for.


Right. And I think in the UK, you actually have some of those situations, but I think in, in Canada, there were probably some deals to be had in the retail space, depending on the type of retail you're looking at. And that probably, that would be a different point of view than one I would have had two years ago. It's just, we've seen, you know, a lot interns evaluations over the last two years, multifamily and industrial. I mean, you know, I think we've all been very interested on the industrial story, the E the E grocery dynamic, something I'm focused on a bit, most folks don't see that being a significant concern in, in, you know, for those that own grocery boxes.


But I do think that that E grocery, even though most would say, it's fairly unprofitable for the operators. I do think it's worth watching. And, and then on the multifamily side, you know, the, the story say, Hey, everybody's moved out, Tim, we're all gonna live in, in, you know, in two hours outside of the metros or we're going to move someplace far. I think we're seeing that kind of played out to a small degree, but largely hasn't fully, and folks have moved back.


And especially in, in the U S where folks have moved back into urban Metro San Francisco's a bit sluggish on that. But beyond that CEO look at Seattle, look at Boston, you've seen, you've seen those apartment rants quite dramatically increased this year. So, you know, some, all of that up and say, not dramatic changes in my view on real estate overall, but certainly certainly reinforcement in some areas and, and deeper thinking and others.




Jesse (21m 57s): I think I'm probably agree with everything you just said, from my perspective of what you're saying, it sounds like very similar to our outlook. Obviously we're biased in brokerage, but on the office end, I think that there was, if you were really in tune with what was going on in office, you saw a lot of these changes really predated COVID in the lockdown, the different ways of working, the ability to have people come in on potential alternating days. So I th I share your position on downtown well located transit oriented office.


I think the story hasn't changed much for them. What's, what's been amazing is that record prices that we've seen in, in industrial and multi res industry industrial, you know, has been the darling of the industry, multi Rez. I think at the beginning of the pandemic, there was this concern that eviction moratoriums would have caused this, you know, mass vacancy, which I think just generally we didn't see, we saw people paying their rent, which I guess in theory, or in practice was kind of subsidy subsidized by the government's.


Colin (23m 3s): Yeah, no, that's right. That's right. It was. And that goes back to the first point on the large role of government in, in our society. And, and to be fair, so much of our society was underwritten by the government, especially in that first lockdown, but our multifamily it's interesting because one could juxtapose a national headline from CNN, for instance, saying nobody's paying rent and rent collection is only at 70%. And multi-family, and then what I was hearing from, from institutional owners was, oh, no, our rent collections are 95%.


And I, the worst I heard was like maybe 89%. And so, you know, that, you know, those two stats juxtapose show the importance of institutional ownership of the multifamily space and, and how that really paid off in, in, in, in, throughout the crisis, not withstanding the point that yes, government definitely helped pay the bills for a number of folks, but that really, really mattered. And also the types of multifamily that you were in, this is more of a us common than Canada, because, you know, you have a much broader spectrum in the us, but certainly some of that luxury multi-family was, was hit pretty hard in the U S but interestingly, it is bouncing back.


Now I was in Boston six weeks ago, or so touring a bit of this product and it's, you know, it was quite interesting. The bounce back has been pretty robust. So anyway, for me, the point is institutional ownership and management of, of multifamily really made a difference in, in the crisis. Yeah.


Jesse (24m 49s): And I think on that point with trip, you know, AAA or high-end multi res, I know that there was intra construction, you know, pivots from, okay, maybe let's go be like, you know, maybe we don't need the Taj Mahal, whereas prior to COVID, they might've gone for that super high end. But yeah, I think a big component of it has been, despite some of the government policies, people have continued to pay the rent. And it seems to be at least from the data that we have, that the not only the prices keep going up, but net operating income keeps going up.


So the question really from my point of view is, you know, w where do we hit the wall first and pricing or affordability, you know, what, what tempers multi rise.


Colin (25m 30s): Yeah, that's a really good question. And take it take cities like Vancouver and Toronto, which have robust shadow rental markets where that condo inventory is, is really, you know, subbing in for that luxury rental. And I candidly think that it's those owners that will have to deal with that question first versus a multifamily owners. And if I were to sort of locate myself along that spectrum, I have to think affordability's going to start being an issue one way or another.


So whether it's, you know, people are paying, you know, the income proportions after, after tax income is, is, is off the charts. I'd say as, as a proportion of rent on average, you know, in, in, in, in Toronto and Vancouver, again, to a lot of that sort of condo shadow inventory, but it's worse for folks that are owner occupiers, just based off of the, you know, the significant appreciation that has happened.


So, you know, I think it's a legitimate concern. I just don't think institutional multifamily Canada is going to be the first in line to address it. I think there's going to be some other folks who dressing at first and we'll see how it gets addressed. And then the big thing that everybody talks about in, in the public equities world is interest rates. And when will they go up and, you know, folks are concerned about inflation. And I think we genuinely are, cause it sucks that things are a lot more expensive quickly, but I think a lot more people are much more interested on how will central banks, if they decide that this inflation run is a bit more permanent than they thought, Hmm, how will they adjust interest rates to, you know, deal with that.


And, and, and there, you know, if I look at that's the challenge and the folks lined up to, to face that challenge, those multi-family owners, aren't first in line, they're probably third in line. The first SIM are probably, you know, I would say highly leveraged homeowners that have, you know, purchased a product in the last year or so.


Jesse (27m 47s): Yeah. Fair enough. In terms of moving on to a little bit more on the interest rate, inflation inflation environment, you know, we keep hearing whether this is transitory, whether inflation that we have right now, for those that don't know, I think the fed very quietly, you know, mentioned that they would no longer be targeting the 2%, you know, their, their typical target of a 2% inflation. And it kind of went under the radar, I think even from, from kind of financial news, but w what are your thoughts?


And I guess in your role at TD, obviously you have to take a pretty broad global approach. How, how, how did that decision and what you've been seeing as inflation kind of creeping up, how is that influencing or changing, if it does your opinion on, on, you know, where you think you want to lock in rates where you think that you can, you can be in, in variable environments.


Colin (28m 44s): Yeah. Good question. So numb number places, one on, on the fixed versus fair, but we, we have generally put, had a predisposition to have as much fixed as possible on the view that, you know, this environment is benign in terms of the cost of debt. And so if we could sort of lock in some of that, that's, that's quite attractive now in certain places, it's pretty hard to do that. So construction financing being one, but we're possible that's being broadly the approach and, and this, and now that's a worldwide thing.


So, you know, I think that approach was most pronounced pre pandemic in places like Japan and also in Germany and other European countries. But I think now that's a Candace point, a us point, et cetera, on the other side, which is on the property type side, that's interesting, right? Because multifamily have one year, at least a student housing and maybe eight months, maybe 12 month policing. And when you look at an inflation world of rising interest rate world, that becomes quite interesting, even pre pandemic we're down in Australia, looking at industrial, we took a lot of comfort from the structure of leases in, in, for industrial product in Australia, which have a rental escalations each year.


And it's quite quite attractive at two to 3% per year. And so some now, sorry, that's quite attractive right now, right? Hopefully, hopefully it's attractive in five years, but I think that's also important. What's the structure of the leasing in, in the property types that you're investing in. And, and it's interesting, even in the office environment today, we're seeing leasing transform a little bit. We're seeing shorter term leases, not due to inflation, just due to uncertainty in office, but the, you know, the, I guess the net benefit of what might be viewed as more challenging leasing dynamic is you might have a little bit more flexibility in the shorter term if we, if we do have, you know, rising rates due to rising inflation.


So it is a complicated point, but we, we really began thinking about it in earnest in 2020. You know, we, we thought about it in 2019 and 2018, but in 2020, as we saw some of those significant changes and by the way, on the fed. Yeah. So that was a watershed moment. At least to me, when they moved off that sort of target, they also sort of announced, I think in the September meeting to be, you know, that they would begin tapering. Now we've been tapering in Canada for awhile, but I also think that's an important announcement that probably didn't get as much press as it should.


And then the program to taper fully, I think goes until June of next year. And after that, you would, you know, at least conceivably expect that rates would begin to rise. And I think to most people that would be sooner than what most people anticipate for the U S fed to, to do so. Yes, the feds made a few announcements that I think of come beneath that radar screen.


Jesse (31m 59s): I think it's one of those things that when it comes down to the ground level for us at the property level, whether it's, you know, office leasing or retail, I think there is potential for return of, you know, we've had leases where in the nineties and eighties, you'd see these legacy leases where they didn't have step-ups discreetly, but they had, you know, each, each year your rent would rise or your base rent would rise as a function of the CPI index. So it'd be interesting to see if we go back to more of kind of targeted step-ups that really want to go up with inflation, you know, if that's going to be a big enough thing where you, you see that translate, but yeah, it's, it's definitely something that's on the interest rate side, curious for all everybody, you know, we have people on that are, I find extremely smart that will have complete opposite opinions on inflation and interest rates.


So it's one of those things where you watch carefully, but in terms of having a crystal ball for where, where rates are going to go, I mean, I think I've confidently said rates will have to go up for the last 10 years.


Colin (33m 5s): Yeah, that's right. That's right. And, and, and eating a bit of humble pie is essential when, when, when prognosticating about these saints, because it's, you know, it's, it's almost like predicting currencies. There's just so much that goes in to, to, to, you know, what the fed does or what the bank of Canada does. And, you know, you can raise rate rates quickly or slowly. You might raise some that dance through there is, there's quite a lot in there.


And then you've got geopolitics, you've got a health pandemic and, and, you know, so sitting in 2019, nobody would have anticipated, right. Where rates would be today, just nobody would have gone in that. Right. So to your point, yes, I, I definitely eat some humble pie as well.


Jesse (33m 54s): Yeah, no, fair enough. You, you control what you can control. And, you know, we were in one of those few industries where you can directly almost directly pass on inflation to your customer, but it's a interesting point, especially in the Canadian environment, when you talk about student rentals where you essentially can mark to market your rental rates almost almost annually, usually two years, three years. But, you know, for those that don't know the Canadian environment, even in multi res, even though they're one year leases, you're not really marketing to market within, you know, every year, you know, the turnover can be, depending on the asset can be quite a bit different than, than student res.




Colin (34m 32s): Absolutely. And that, and, and, and that will be interesting going forward, right? Because you had folks in the last year or so, depending on the market and depending on the product, and this is more of a condo shadow inventory point that moves to take advantage of some of the lower rents in the multi-res side, that due to, you know, rent control, both, you know, use Toronto or Ontario as an example, you would think that the turnover rates going to decline materially, at least in the short term, as a result and in, in the student world, you know, it's, it's doubly interesting.


So number one, you've got your normal turnover folks graduate, but you also have this year and next year cold called the bulge in the class. You've got people that might've delayed, that are now taking the class people that were at home that are now going back to campus. You've got campuses that were virtual, like Ryerson here in Toronto that are going back to in-person in January. So that re all of that combined, and then you've got international students that are coming back.


It makes it a really interesting place to be in the student world. Yeah.


Jesse (35m 50s): Yeah, for sure. Colin, I want to be respectful of the time here, but I do want to talk about the, the black opportunity fund for those that don't know what it is. I just want to, you know, before we, we ask our final questions here, I mean, just in kind of asking the question, are you able to talk a little bit about the fund moving on to kind of culture in our commercial real estate world? You know, we can talk about specifically here in our area, but I think culture is very similar, our commercial real estate culture.


So I'd like to just kind of get your view on where we're at right now, from your point of view, you know, we're what improvements from a cultural standpoint you think that we can make and, and yeah. And on that talking a little bit about the fund and what it is.


Colin (36m 37s): Yeah, absolutely. So first the culture culture in real estate, in the commercial real estate world, it is a highly congenial culture and relies a lot on personal and interpersonal interaction and the log on the power of networks. And that's just a global global point and familiarity with each other on the basis, usually of doing deals and transactions and working through situations, none of that's overly bad.


What I have found, whether it's going to expo in new Nick or whether it's going to, you know, an animal con conference in Beijing is it's extraordinarily a male and be uniform. And when I stepped back from that, I think, you know, the folks that occupy our properties are not all male and not all uniform. And we live in one of the most incredibly rapidly changing and advancing times ever, right?


We're in the fourth industrial revolution and everything literally is changing. And so how can an owner operator of real estate realistically tell their investors that they're the best in the world at what they do, but their staff is only, you know, only calls from a quarter of the population in the country or city in which they're in. I just don't think it's possible. There are smart people out there, brilliant people out there that would make fantastic real estate investors that aren't actually able to get into real estate for X, Y, Z at ABC reasons.


So I think that's a problem for the real estate industry as much or more than it is a problem for society. But if we can solve that problem, we create better outcomes. And this isn't just that, you know, this isn't a CSR thing. I E the thing at the back of the annual report and where everybody's smiling, no, this is actually a, Hey, you can do, you can create better returns by having smarter people running the strategies, running the real estate.


So what's the black opportunity fund, a billion and a half world's largest pool of capital to fund a black led black focus, black serving charities nonprofits on one hand businesses entrepreneurs on the other hand. And why, because when we went through the last two years accelerated by what happened, George Floyd, we saw a ton of organizations doing fantastic work, just subscale.


They just need a capital. And it, why? Because we thought, Hey, why don't we start an, you know, a scholarship? Well, there's a ton of organizations getting scholarships. Why don't we start an after-school program? There's tons of organizations. There are literally hundreds and hundreds and hundreds of nonprofits, by the way, didn't say charities because they don't have even the scale to get through the process to become a registered charity. So they're non-profits, but they're, you know, moms and pops doing their best with the limited resources that we, that they have.


So black opportunity for motivate contributions from corporations, governments, individuals, families, anybody, we think it's a whole, a candidate problem to scale up these charities, nonprofits on the businesses and entrepreneurs side. There are thousands of entrepreneurs and businesses, all of them virtually all of them, very small. And the number one issue statistically as surveyed is access to capital.


And there is both and a perception issue and also true difficulty accessing meaning financial institutions are less likely, and this was studied by the, the federal reserve are less likely to give to an individual of color. There, there are like more likely to be determined, to be high risk.


And as a result, individuals of color are less likely then to go to those financial institutions. So you have sort of this negative wheel created. And so we're just trying to break that and create an assessable pool of capital to provide. So that's the goal of the black opportunity fund. We have been raised capital TD just announced a couple of weeks ago, $10 million plus office space. Plus the conduct individuals, national bank announced 6 million, just over $6 million to, to the black opportunity fund.


There's been a number of other contributions, but we're early meaning we've got a ways to go. We spent a lot of time creating the infrastructure at the correct governance, the board, et cetera, et cetera. And it's been a huge effort, more than 300 folks involved. We talked to thousands of businesses and charities and all, all across the country. And that's important to geography. Folks think about Toronto and Montreal. They overlook St.


Johns and Halifax and equalizer. We want to focus completely across the country, French and English, female, and male, and, and, and also LGBTQ plus, et cetera, that is important to us. And so that's the black opportunity fund.


Jesse (42m 29s): Yeah, I think, I think for, you know, from the point of view of the industry, I think me personally, I think that's why it's important to have these carefully, these organizations do these care for careful, you know, dis w whatever you want to call them, disparate impact studies, but we're looking at what policy actually does at the end of the day. You know, we have XYZ goal for policy, but what is really happening in reality? One thing that really clicked for me was I was in business school years ago in Toronto, and we had a venture capital capitalist that was talking to our class.


And he said that he had his daughter, she was going into computer science and programming and university of Waterloo for, you know, the Americans listening pretty much our Silicon valley in Canada. And he said, he went, brought her into programming and it was an orientation. And as most people could imagine, 99.9, 9% male. And initially I remember thinking, well, you know, if, if you go into something and you have people that are interested in that and they want to do it, and it happens to be disproportionate to society, you know, that's people making, making decisions, but then you said something, I think it would always stuck with me.


And when we have these conversations, I always think about this is, he said, these are, this is the generation that's going to design the virtual reality in geography. We plan the way that we navigate the world is a lot of it is going to be on the computer. A lot of it is going to be software. Do you really want this one cohort of people, no matter how great they are with all the blind, you know, the blind side, you know, the blind spots that they have. Do you want that to be what creates the future and designs it, or do you want to have a multitude of different views where the collective blind spots, you know, create something that is very clear?


Colin (44m 22s): Yeah, no, that's exactly. That's exactly it. And the tech world to that point has had its owns for the realization. Cause you know, commercial real estate, isn't alone. I mean, I'd say broadly the investment world, same thing broadly, broadly the tech world. But if you stay, you know, I stepped back and I've, and I've posed this question and truly a few times, it's like, why, why is it that virtually all of the administrative assistants are female. And it's like, do you, do you grow up?


Are you born? And you grow up and there's an innate desire as a female to become an admin assistant that doesn't exist for males. And clearly the answer is no, at least at least my interpretation and understanding of medicine yields me to conclude. That's probably not the case. It's probably a societal expectation. But if you take it to your example or the instance of commercial real estate owners, you know, how, how is it that you will grow?


How can you grasp future trends? How will you understand how people want to live, work and play, how they want to shop the types of retailers? They w retailers that they want to go to the experience that they want to have in lifestyle oriented centers. How can you actually understand that? If it's five dudes planning out the layout of the mall, right? It just, I don't get it. So to me, it's kind of like, well, you want to, you want to draw people in so that you have these different points of view.




Jesse (46m 0s): You're just going to go to that mall and not have any place for, for your, any daycare to put your child.


Colin (46m 7s): Yeah. Pretty much


Jesse (46m 9s): Awesome. And okay. I've, you know, we've been very, very generous with your time here calling. We have four questions. We ask everybody on, on the show. So if you're cool, I'll S I'll send them your way.


Colin (46m 20s): Sounds good.


Jesse (46m 22s): Okay. What's one thing, you know, now in your career, you wish you knew when you started,


Colin (46m 27s): I say, boldly use using the Wayne Gretzky analogy, which is old flea. Think about where that puck is going and skate, where that puck is going versus looking at the shiny object today and going to that shiny object today.


Jesse (46m 46s): Yeah, that's great. I haven't heard that in a while B be where that thing or that puck is going to be not where it, not, where it is in terms of, we always ask guests in terms of what you would tell younger people, getting into our industry, and just generally your view of mentorship,


Colin (47m 3s): Jay mentorships, critical more than my mistakes has been not caring mentors throughout my career. As I progress, meaning I have lots of mentors as I began my career. And then you sort of, you know, go through the different levels and you know, you get busy, it falls off you, you know, whatever, it's a terrible thing. I think mentors are absolutely critical. Gives you a perspective on, on things that you're seeing today that, that person's seen in a different way, 3, 4, 5 different times, and can tell you what they did or what didn't do more important than that is a mentor calls out your bullshit.


And that's really important sometimes. And so that's valuable somebody coming into the industry today, what would I say? It is a relationship industry at the end of the day. I mean, you got to do the work you got to do well, you got to have passion for it. So if you don't have passion for real estate, don't go into real estate. So assuming you're passionate for real estate, it's a networking industry, it's a relationship industry. And so take that time to go out and take somebody to drinks.


Or if you don't drink, take them to lunch, whatever it is, because that, that is what gets your career going in the industry.


Jesse (48m 29s): Yeah, absolutely. What is one or two books or podcasts that you are constantly recommending?


Colin (48m 35s): Yeah, that's a good question. I do like Malcolm Gladwell's books a lot. I wish I could say I've got a long book list. I wish I could say I've read all the books on that book list. There's a book that comes to mind. It was it's the power of one. I read it in literally high school, but it, it, it, it just speaks to me as a story about courage and resilience that, you know, I think is beneficial today.


And if I go back to your earlier question about advice, people used to say in, I banking world, it's a marathon, not a sprint. It absolutely is. And so to run that marathon, you need resilience and you need that, you know, that, that capacity to endure, to learn, to fall down, to, you know, make mistakes and to get up even better. Yeah. That, that book, the pair, the power of one was quite, quite instrumental to me, even though I read it so many years ago. Awesome.


Jesse (49m 39s): We'll put a link up to that. And the last question, my favorite layup first car make and model.


Colin (49m 48s): So funny enough, I've never, I've never owned a car because I've always lived in, in urban centers and have, you know, subscribed to the notion of taking the subway, walking everywhere and now taking Uber's. But the first car is likely to be some form of electric vehicle. Can't say it's going to be a Tesla, but it might be a, so let's go with Tesla and some electric vehicles.


Jesse (50m 16s): I like it. That's the first guest to prospect there, their first car. And the second one that, that they've always, they've always been public transit oriented. So I think that trend is going to continue going in that direction.


Colin (50m 30s): Yeah. I was early on that train cause you know, you know, it was very unusual, but you know, just like the, not having a landline telephone, a terrain that was early on that too, but eventually I'm going to have to give them, I know I can, I can see it coming in. It's probably going to be that Evy, hopefully when those batteries are better, there you go


Jesse (50m 50s): Calling for those, for those interested in getting in contact with you or anybody that wants to see, you know, what you guys are up to, what would be the best place to reach out?


Colin (51m 1s): Yeah. So LinkedIn is, is, is good. People do reach out through that in terms of finding, you know, what we're up to black opportunity fund for bear has a good website, lots of info there. We keep it up to date as it relates to T them and global real estate and our Canadian real estate, there is a T damn website, like most websites in the, in the investment world. We don't tend to overload it with information.


So, but T them does have a LinkedIn page. And so that is also quite active. So following either TDM on LinkedIn or on Twitter, there's there's information there. And if you don't want to do either and just want to message me on LinkedIn, you can, and eventually I'll get back to you.


Jesse (51m 54s): My guest today has been calling Lynch con thanks for being part of working capital


Colin (51m 59s): Pleasure. Pleasure. It was great conversation.


Jesse (52m 8s): Thank you so much for listening to working capital the real estate podcast. I'm your host, Jesse for galley. If you liked the episode, head on to iTunes and leave us a five-star review and share on social media, it really helps us out. If you have any questions, feel free to reach out to me on Instagram, Jesse for galley, F R a G a L E, have a good one take care.

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