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GET TO KNOW US: Karen Jones, NexusCrowd Advisor

1/31/2018

 
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What excites you about NexusCrowd?
 
It allows me to share knowledge about attractive real estate investments with friends, family and colleagues outside of the institutional real estate investment industry. Previously, most investment opportunities were limited to institutions and ultra-high net worth investors with minimum investments of $2 million required to participate in each deal. 
 
The Toronto commercial real estate sector (as an example), is presenting some excellent value-add and development opportunities for investors to build their capital base. Why shouldn’t everyone be able to participate in this wealth creation, even if in a small way?
 
What are your thoughts on technology disruption in the real estate industry?
 
Technology has offered more streamlined transactions from renting a room to investing in multi-million dollar projects. One of the greatest benefits of technology is greater transparency. There are no reasons why information can't be available in an efficient and easily-accessible manner.
 
Real estate has become a data-hungry industry which demands more detailed and interactive documentation, drawings, photos, maps, financial analysis, etc.  Artificial intelligence will customize this process such that information an investor or tenant/user receives is tailored to be highly relevant to them personally and available immediately.  In the end, the space, buildings and locations they choose will be significantly more suitable and valuable.
 
As a real estate investment professional, what are some the key criteria you look for when making investment decisions?
 
I will answer this from the perspective of Canadian commercial real estate development projects.  There are so many variables to consider but at the top of my list are demand, supply, zoning, and environmental/geotechnical condition. Specifically:

  1. What is fueling demand for this space and location and is it sustainable and/or growing?  Is this location in a transportation-centric area and would the average person want to “live, work and play” there? 
  2. How much supply is available or planned to meet this demand?  Will an oversupply situation lead to a decrease in rental rates? 
  3. What is the zoning status (if a development is being considered). I can’t emphasize enough, the importance of understanding the timeline, influencing factors and risks involved with a rezoning.  A rezoning that takes significantly longer than expected, or grants less density than anticipated, can completely kill your investment returns. 
  4. Is there environmental contamination in/around the site? (most can be remediated, but understand the costs, approval process, monitoring requirements and overall timelines involved). 
  5. Is the soil/substrate stable/suitable for building upon?
 
These issues can lead to some of the most costly surprises for a development project if not fully understood ahead of time.
 
What career advice do you wish someone had given you?
 
Focus just as much on your communication skills as you do on technical skills. Learn how to write well, listen very well and understand people’s needs and sensitivities. These skills are required to present an idea well and persuade using solid evidence. 
 
I have met many smart people with good technical skills but the ones who have also honed their communication skills are those who get to the crux of all matters, are able to problem-solve, build the strongest networks/relationships and find the best opportunities.
 
Being an investment professional and mom must take up a lot of your time but when you have it, what do you do in your spare time?
 
I dedicate most of my spare time to music-related activities.  I try to attend a concert every two weeks (all genres), I watch documentaries and read books about music styles and musicians/artists, I research and listen to new artists/songs, and I post/write for two music-focused Instagram accounts. 
 
Music has been a good way to bond with my teenage children and their friends.  Listening to music and going to concerts is also a great stress-buster.

Karen's Bio

​Karen has more than 25 years of investment industry experience. In her most recent role as Senior Vice President, Specialty Funds at Fiera Properties, Karen played an integral role in researching, structuring and launching new investment funds. Karen launched and managed the Fiera Properties GTA Opportunity Fund, a closed-ended real estate development fund that invests in multi-family, office and industrial development projects.

After five years as a financial analyst in the real estate development industry, Karen became Portfolio Manager, Real Estate for Ontario Teachers’ Pension Plan Board, and was involved in the acquisition of $1 billion of commercial properties. Subsequently, Karen worked as Managing Director, Corporate Development with Enterprise Property Group, involved in the acquisition and integration of Edgecombe Investments where she was appointed Fund Manager for their open-ended real estate pooled fund.

GET TO KNOW US: Ian Smith, NexusCrowd Advisor

1/19/2018

 
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What excites you about NexusCrowd?

Commercial real estate is an asset class that I have wanted to participate in for a long time, but I did not  know where to find opportunities. NexusCrowd has solved this for me by bringing quality debt and equity deals at a capital commitment level that is accessible and allows me to build a diversified portfolio.
 
You occasionally invest in start ups, how do you select which ones to back?

The start up community is full of exciting and ground breaking ideas and it is easy to get overwhelmed by the number of opportunities. After initially being inundated  with deal flow and the required due diligence, I put in place a rules based approach to help identify the opportunities worth the appropriate focus.
 
Any potential investments had to have three characteristics: a large addressable market, a strong coherent leadership team that I could meet with in person, and a catalyst. 
 
These characteristics are not exhaustive. Other considerations are growth rates, valuation, structure of the cap table, corporate governance and competitive landscape. If I  cannot tick the boxes on the three characteristics I’ve identified, I move on to other potential opportunities.
 
What is your biggest takeaway after 25+ years in the investment/financial services industry and working in different countries?

We all, for better or worse, operate from a framework defined by our experiences. Typically our more painful experiences factor more prominently in regards to decision making. After entering the financial markets in the late 80’s I experienced the liquidation of Long Term Capital Management in 1998, the internet bubble in 2000 and the financial crisis of 2008. All of these events inform my view that there is always a potential “train wreck” lurking out there and that preserving capital is paramount.

I approach every investment with the question: What if I am wrong? Managing the risk and limiting my downside is always my focus.
 
Why do you like real estate investing ?

Real estate is a tangible asset that is relatively easily understood, it offers inflation protection and diversification from other financial instruments. Global population growth and migration serves as a powerful tailwind for long term returns. Also in this low interest rate environment real estate can offer relatively high stable income returns.
 
I appreciate the range of investment possibilities – debt and equity, varying credit quality and the returns commensurate with the risk I am willing to take.
 
What career advice would you give your 25 year old self?

Looking back, that list of advice would be long. One of the top ten would be to find a mentor. A mentor can help by offering candid actionable feedback, framing issues to ensure you are considering different perspectives and helping you manage your blind spots. I had a few mentors throughout my career and I am immensely grateful for the time they spent guiding and coaching me.
 
What books have you read recently and why?
 
Win Bigly by Scott Adams. Scott Adams created the Dilbert comic and was an early predictor of Trump’s win. I wanted to understand the author’s take on the Trump campaign and presidency.
 
The Four by Scott Galloway. I was interested to hear the author’s theories  on some of the darker aspects of Amazon, Apple, Facebook and Google especially in light of a potential regulatory focus regarding the power and reach of these companies.
 
Evicted by Matthew Desmond. This book is recommended by Bill Gates. Desmond is a Harvard sociologist who thoroughly examines extreme poverty and its devastating social consequences.

 
Ian’s Bio
 
Ian has more than 25 years experience in the global financial services industry focused on investment and risk management. His experience spans roles in fixed income, equity derivatives, prime brokerage, equity finance and proprietary trading across Asia, USA, UK and Canada.
 
In his latest role, Ian was a Managing Director at Goldman Sachs Asia responsible for Pan-Asia Macro Trading managing delta-one derivatives, program trading and index arbitrage. Ian was a member of the deal team involved in several high profile structured corporate deals. Ian served on the Asia Pacific Finance Committee tasked with allocating capital, balance sheet and resources in the region. Ian was also involved in various industry organizations meeting with financial regulators around the region. Prior to Goldman Sachs, Ian was a fixed income trader for a US based hedge fund responsible for non-dollar government arbitrage trading.

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