70: Global Perspective With Peter Tsoulogiannis

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This is Real Estate Investing Live from New York with James Nelson, the principal and head of Avis and Young's Tri State Investment Sales Group. In this program, you'll learn about the world of commercial real estate and find out why it's one of the largest investment opportunities in New York and around the world. Now here is your host, James Nelson.

Welcome to show number 70 of real estate Investing Live from New York. This is your host, James Nelson. I'm principal and head of Tri State Investment Sales. And wow, we are going strong. It's been now almost a year and a half and the latest reports that I saw, we have downloaded well more than 125,000 shows from all of you out there around the world. And I just, the feedback has been amazing. And, you know, I also find myself just in the ordinary course of business and throughout the day and when I'm talking to someone and maybe they've got a problem or an issue or something that they're looking to solve, I find myself referring to a lot of these shows and saying, well, you know, you're having trouble raising capital. Maybe you should go listen to Jordan Vogel's show or Joel Breitkoff. So it's, it becomes a library of tools to help you to become successful. So thank you as always for subscribing, telling your friends, leaving your comments. I can't thank you enough. And please just, just remember if you haven't already, to connect with me at James Nelson NYC, whether it's Twitter, LinkedIn, Instagram, and we're starting to do shows on Clubhouse, too. Our group did one Last Friday at 12 noon called the New York City Week in Review. We're going to be talking about rolling out another show where you all will be able to voice your questions, have a discussion. That's what we're doing here is creating a community. So great stuff to look for in the future. So for today's show, which we're entitling global perspective, I have Peter Suglianis with us from Slate Asset Management. And I love Peter's story because they're a Canadian company, but he helped them build out not only their German office for their European acquisitions, but also their U.S. office. And I know for a lot of you, investing in a new city, if you're here in the US can seem a little daunting. But I was amazed to see how he's been able to tackle investing in different countries. So I think you're going to get a lot out of this show. We're going to have a brief word from our sponsor. And we'll be right back to that interview with Peter. Thank you.

Hi, I'm Mark Rose, Global CEO of Avis and Young, the world's fastest growing real estate services firm. And we are proud supporters of Voice America. With over 5,000 professionals in 120 offices in 20 countries, Avison Young delivers local expertise in partnership with global reach. Because we are principally owned, Avis and Young prioritizes client success over shareholder profits through our open architecture. Our firm's experts provide value added client centric investment, sales, leasing, advisory management and financing services to clients across the office, retail, industrial, multifamily and hospitality sectors. Our culture is the bedrock for collaboration that enables each assignment to benefit from the collective intelligence garnered from a company wide database partnership performance. Learn how we deliver different@avisonyoung.com to learn more. You are listening to Real Estate Investing live from New York. To find out more about James Nelson or Avis and young, visit avisonyoung.com now back to our show.

And now it's time for our Investor Spotlight. And with us today is Peter Sulojiannis who is partner of Slate Asset Management and sits on Slate's investment committee and is a member of its management committee. Peter leads origination and execution of Slate's global investments and strategic initiatives across their business verticals. His responsibilities include originating and executing acquisitions, capital raising, overseeing various asset management functions and establishing new investment platforms. Prior to Slate, Peter held real estate investment banking positions with BMO Capital Markets, CIBC Capital Markets. Peter, thank you so much for joining us today.

Thanks for having me. Pleasure to be here.

So, hopefully I passed the first test and I got the pronunciation of your last name correct.

Is that spot on your natural.

Okay, well, I did have a little coaching from you, but yes, for those listening, the spelling of Peter's last name is T S O U L O G I A N N I S. So you gave me the tip that the basketball star. We've got the last portion covered, but appreciate the prep there. So Peter, why don't you first tell us a little bit about Slate because you have a couple different verticals. You're in four different offices across the OR around the world. Really. So maybe give us a little background on your company.

Sure. So Slate is an investor and asset manager focused in real estate. We are, you know, we operate, as you said, in the United States, in Canada, in all over Europe. We have offices in London, Germany, Dublin and Luxembourg. And you know, really what we are in a nutshell, we're fundamental real estate people. We're basis buyers. And what we try and do is look around the world, find great interesting real estate opportunities and try and match that with the right capital that's seeking those opportunities. We feel that capital that's investing in real estate is extremely global and it's becoming more global every day. And as such we need to be able to have connectivity in all the markets where the capital is in all the markets where we want to invest in. So Slate was founded in 2005, originally started doing office investing in Toronto in partnership with the Blackstone Group. That was very successful and from there we continue to grow and spread. We started investing in grocery anchored real estate in the US coming out of the financial crisis. We bought GE's equity platform in Canada, we privatized some public companies in Canada. We launched funds to invest in grocery in and are continuing to invest all over in all the markets that we're in. So we are pretty asset class agnostic. We'll do office, retail, industrial, we do residential development. And we actually have started a special situation strategy. So lending and providing capital to different points of the capital stack. So us in a nutshell is we see a lot of very great global real estate investment shops that started in private equity and have grown to be massive and very successful. We are a much smaller version of that. We're six and a half billion. But I think we're unique that at our size we are spread across the western world in Canada, US and Europe. So I think that's a differentiating feature of how we do things. We have a young team, we have a very talented team which has resulted in a very good track record. And where we are now in the world is a little bit locked away like everyone else, but at the same time very excited for what comes next. So really happy to be here to talk more about us and whatever else you want to talk about.

Wonderful. And that's great context for our listeners. And I would say the majority of our guests are usually US based. They have US portfolios. I know of course you've moved and I want to talk about that, about you're heading up the Chicago office, but I loved the global perspective and your commentary there. So why don't we go back to where it started? So where did you grow up?

I grew up in Toronto, born and raised. So if I sound funny to the American listeners, I'm trying to get rid of that accent. But I will say some words in a way that will make you chuckle. But I grew up in Toronto, went to school in Canada as well. Very lucky to graduate around the time of the financial crisis, which was awesome for recruiting. I was very fortunate to start my career in investment banking. That's where I originally met William Brady. We're the founders of Slate. And from there I've always been in real estate, from my professional career post college and eventually banking. Was incredible and a great experience, but wanted to be on the principal side and investing side. I joined Slate, what seems like a very long time ago, now in 20. Wow, 2015. So that's, that's when I joined Slate and really to focus on doing deals, investments and all the things in your great intro that you have there really touched on a lot of aspects in our business because back then we had one and a half billion of AUM and less than 20 employees. We now have over 100 employees around the world. So some of the things I've done which might inform the discussion a bit is we went to Europe. I was on a plane to Frankfurt and to London every two weeks, every three weeks, which made me really popular on the home front. But it was very exciting as well, just to get out into a different place and see how things are done in different parts of the world. And we can talk about that. There's all kinds of funny stories that come out of going to Germany as a couple of Canadians to try and figure out how to invest in grocery stores. And then as that got set up and more of the offices, the offices got more established. I moved to the US in 2019 to Chicago, where we've kind of set up our beachhead. We've been investing in the US since 2010, and we're very familiar in this market for some of us in our past careers and past lives, but we didn't have as many people down here. And we wanted to continue to grow. We're very bullish on the United States in general. So we wanted to come here, set up an office, hire local, and continue to grow our platform with Americans. And here we are today.

Wonderful. I want to get to all that and I certainly want to hear those stories in Germany. But backing up a little bit further, starting off in investment banking, was this something? I mean, I don't even think I knew what investment banking was in high school or college. Did you have any jobs? You know, internships, things growing up that kind of pointed you towards finance or how did you find yourself starting off in those positions?

No, that's fine because I had no idea what that was either. In high school, I didn't have any friends whose parents were in the industry, I had no clue. And you know when you're doing career planning and your guidance counselors in high school are trying to say you're doing all these tests and it would spit out, it's like you should try accounting. And you know, I think accounting is a great career but that wouldn't have been a really good career for me. So it's funny. But I went to, in my undergrad, I did, I went to business school and I think that's where I learned about all the various directions I could go. And I focused on what I was good at, which was really to start off with numbers, but also strategy and ultimately investing. And from there it start to become apparent what some career paths were. And like everyone who's in college, you look at the job and it's a sexy job coming out of college, it's coveted and it's competitive. So if you strive for a lot of those things, it becomes a bit of a challenge and a bit of a self fulfilling prophecy. But that's kind of how it happened. Coincidentally, my first stint as an intern there, I did a few internships when I was in college was in the real estate group. So that's where I got dipped into the real estate industry early on. And from there I thought, okay, banking's cool, but I like real estate more. If I could do both of these things together, that's a pretty interesting way to learn. And my priority was always how can I learn? Because I knew that I didn't know anything and I needed to work with smart people who could actually teach me something. And I thought that the fast paced environment, heavy workload, despite the lack of social life at times was felt like a good trade. So I don't regret it at all.

Yeah, I was going to ask, I mean thinking of all my college friends who ended up investment bank, I never saw them for years. It was like 100 hours round the clock. I mean, was it mostly research that you were doing? Were you working on mergers, acquisitions and did any of that stuff? I mean, I guess you said you had some real estate exposure though, but that prepared you later for your role today?

Yeah, all of the above. Everyone knows what banking is and I think anyone expecting to get something different when they're there is being a little foolish. It is what it is and it's unashamedly that. So it gave me the technical training on the finance side, that sophistication which I think is important. But at the same time I was only covering and focused on real estate companies. So I was learning the lingo, which in real estate we love to have acronyms and lingo for everything that we do as learning who the players were, learning how to things are financed, learning how to value not just companies but also assets. Some of the, you know, your colleagues in Canada will know this, but some of the Canadian investment banks also within the real estate groups do some brokerage activity as well. So there's a little bit of a, this is how the brokerage world works, this is how capital markets works. And how do you kind of learn to navigate that? So the training was fantastic. And both at BMO and CIBC and universally everyone I worked for was very smart. I would say that I got a much better investment banking experience than maybe some of the horror stories that people heard. I had great mentors who I worked a lot. But it was always fair and there was always at least as much fun as you could have when you're working those types of hours. But it was a good experience.

Wonderful. So, and we do have a global audience, so this is a good question for them. But I mean, were you thinking at the time, okay, I'm going to stay in Toronto for the rest of my life or you know, you were just focused on Canadian companies or were you ever thinking about cross border activities? I mean, what is kind of the job search? Like when is it just specific to.

The, you know, it's a good question and I think it's, this is a difference. I think the US is an awesome place and it's so big and there's so much opportunity here that you know, a lot of times I think Americans get flack because they're very focused on America. But America isn't just one place. There's so much within this massive, amazing country to do and you can literally fill your day and your life by exploring all the nooks and crannies. There's a lot to do here. Canada. I love Canada. I'm very proud to be a Canadian. I think definitely living abroad has made me more patriotic. But it's a small place. Canada has six major markets with more than a million people. The US has over 50 MSAs with over a million people. So it kind of puts that into perspective of if there's no people use real estate. If there's less people, there's less real estate to buy and sell. There's just, there's less companies, it's just smaller. So early in my career I wasn't really thinking about things internationally because I was so focused on just trying to learn the Industry and what was going on. As you master that a little bit, you take a step back and you say, oh, there's a lot more going on in other places. Simply just from the nature of the size, the US is 10 times as many people as Canada. Europe has more than that if you take all of the Eurozone plus the UK because they don't want to be part of Europe anymore. But when you look at all that, there's a lot of different places that there's obviously real estate there, there's lots of investment there, and they probably have different ways of doing things. So when it was coming time, I think, to call it on the banking life and move on to the next step, it was definitely a realization that for me to get what I wanted, I'd have to look outside. And I think that with Slate, I got a little bit of both. Our founders were trained in the US and as US Private equity was in its infancy, and they brought that back to Canada to create Slate. I think Slate is unique in Canada. I think that in the US there's lots of groups that kind of do what we do. And I was already at a shop in Slate where we're investing in Canada, also investing in the US with designs to go to Europe. So it was right as we were really expanding a lot globally. So I got to check the boxes while staying connected to Canada, and I still do now. You know, I'm granted borders are closed, travel is, you know, really curtailed, but we have operations in all the countries I mentioned, and I frequent all of them. So it's. I wouldn't want to trade one over the other, but more is better.

Yeah, that. That perspective is really great. I had never thought about, you know, the size of the markets and that. That makes a ton of sense. I mean, having done business now in several different countries and talking about the customs and the way things are done, I mean, what do you think is most noticeable between how business is done in Canada versus the U.S. well, I.

Think Canada in the U.S. the stereotype is we all live in igloos and we play hockey and we say a boot. Not a bout we do all those things, but I think that we have a lot more in common. I think the differences are subtle. I think it's everything from the difference in the makeup of the population, the difference in. You really want to be historical, how the companies were set up. The US Had a revolution and got their independence. Canada had an agreement, and it was the English and the French and the Native Americans who made a deal. And ultimately it started off with a lot more cooperation. We're very different in that regard, but in terms of how we do business, the laws are the same. We have a common law system. It's very much modeled on the UK and we inherited that. And I think it's an amazing system, but it makes things familiar. You also have very similar approaches on title. You have all the same players and brokerages north and south of the border. So there's actually way more similarities than there are differences. I think the differences are more subtle and cultural as opposed to how do you underwrite a piece of real estate? And in that I think that there's no we can go beyond just Canada. US Real estate is local. So if you're going to be investing, you need to know what are the tenants in that market doing? What are the people in that market thinking? How you analyze that is the same everywhere. Whether you're using meters, whether using feet, depending on what currency you're using, that doesn't really matter. It's always been and will be a local game. So it's those cultural nuances that make it interesting and make you think about something a little bit different in how you approach investing or operating. But it's funny at a 30,000 foot level how similar it all is.

That's great to hear because I would think, I mean, in your commentary about how the US is so many different sub market cities. I mean, there's so much diversity here. I mean, you take me to another city outside New York, I know the basics clearly of how to underwrite a property. But as far as how leases are structured and what is protocol, how are sales transactions done, they vary even from city to city. Or even if you go outside New York and maybe you're investing in the suburbs, I would think throwing in there an entirely different government and customs would make it all the more challenging. But I guess that's reassuring to hear that the differences are not that great and many of the fundamentals are the same.

Yeah. And look, as a Canadian, I'm very fortunate. We are a great country, but a small country by number of people. And we're used to looking at the world in that there's a lot of other players and a lot of them are larger than us. And whereas I think if you are, if you were born and raised in New York and that's what you see, then again that's huge. That market is multiples, like at times, like multiple MSAs in Canada. So it's a completely different scope of opportunity and things that you can do, the number of players involved. We always approach it that we are small, the world is big, and there's a lot of ways to do things. I think that, if anything, what this lockdown has showed with people dispersing and going to wherever they want to go to in the country, and the adoption of technology that allows people to be more mobile, I think that a lot of those same things are going to happen even within the United States.

Very interesting. So I want to hear more about your story. So you show up to Slate and what do they have you doing? This is, I guess, 2015. So you joined the company. Maybe tell us a little bit about how you got the job and then what did they have you doing as you started out there?

Yeah, the job I had. So Blair and Brady Welch, who founded Slate, I knew them very well, both at BMO and cibc. They were clients. We worked on transactions together. And I kind of saw as they built Slate from a partnership into a company and then an even larger, faster growing company. And I kind of always had told them that if you need, they had similar beginnings of their career that I did. And I said, if you ever need someone like me, just let me know. I was a big fan of them, big fan of the company, big fan of the direction. It was when we were privatizing a company called Huntington Capital Corp. That it was a pivotal point that it was going to give us a lot more capital, a lot more. It was an interesting deal that will allow us to grow. We got another public REIT that we would have been the manager of. So there was a lot of things happening and they said, okay, this is complicated. We need someone with your skillset to help execute transactions. So instead of doing it on the sell side as an advisor, I switched, changed hats. And funny enough, it was BMO who was advising on that one. So I instantly was across the table from my old colleagues, which was, yeah.

How do they feel about that?

Actually, you know what? In general, we had a good relationship, so it was all good. But banks love it when that happens because especially when it's a good situation for everyone.

They have an insider there. They have an ally.

Well, relationships are important no matter what you do and where you are. So I think if I had left in a cloud of smoke, I don't think they would have been as happy, but they were great and I was very happy for the experience. So it was kind of a win win. So there was no issues. But the big difference in terms of, like, the job is the same you analyze, you execute, you have to do all your diligence. It's all the usual stuff when you're investing in real estate. But the difference is, as an advisor, when the deal is done, you say, okay, I'm on to the next deal. As an investor, you have to now live with that investment. You have to work it out. And we have a very good asset management team that helps us execute on these. But you always have to think of it in that I'm going to be living with this for a long time. So the decision making becomes different. Not necessarily just focus on the transaction, but what comes next. So that was the nuance that I learned coming across. But aside from that, it was screening opportunities, looking at different markets. I mentioned Europe. We hadn't been in Europe, so we had no people there. We had some leads and deals that we had looked at. But I spent a lot of time researching those markets, going over, touring assets, trying to learn more, trying to make a rationale of why we should go there. Is there a deal that we can do? How do we expand our footprint into Europe? Where in Europe do we go? Europe is a big place. Do we go to London? A lot of people seem to go to London. Do we go to Germany? Better weather in Spain and Italy, better food. So there's all the funny things that you're learning about a new place, but we ultimately settle on Germany. So it morphed from analysis and execution, really shadowing the senior folks at our company, learning from them, and then from there, branching out and doing it on my own, trying to find deals, training a team below me, and then continue to rinse, wash and repeat and replace yourself. Our philosophy is the second you start in the job, you should be thinking about how to replace yourself. So that's what I've done multiple times. And that's why we have so many people in the company that we all think that way. So it's a pretty entrepreneurial shop. We're focused on growth and it was always, come here, learn how to do it and then do it yourself. And you never do anything on yourself. I say that more in the sense of just taking responsibility. We do everything as a team. That's how we've been successful and that's how I was able to learn. So again, same reason I picked banking. I wanted to learn. I picked coming to Slate because I wanted to keep learning. And now I'm at the point where I still. I'm senior in our company, but I still have a lot to learn. So that's why we keep hiring young people with fresh ideas because I have a lot to learn from everyone else as well. So it never stops. But that's the. What it's evolved to now is overseeing our investments globally, looking for deals, as well as trying to manage and build the team that does that so that everyone can kind of operate independently and take that responsibility and autonomy. I think that without that, you know, I don't want to say I'm in charge of anything. I don't want to know what our team is doing every day on a daily basis. I want them to be out doing it on their own. So it's been a big journey, but a fun one.

You know, when I read your bio. So your responsibilities include originating and executing acquisitions. So acquisitions on its own can be a full time job. Capital raising surely going around, roadshowing, finding capital for deals, overseeing asset management and establishing investment new, new investment platforms. Any one of those four things could be its own standalone loan job. So how do you, I mean, I guess you just kind of answered the question. You know, you're building the teams around it, but help me understand. So you show up to Germany. So you first get there to try to decide should we even be there. I guess you find an opportunity and then you're building a team to handle all those functions. But until you found that person, you have to do it yourself. Is that kind of the way it works?

Well, I guess really investment, it's all those things though I guess before I go right to that, I think just think of it. If you take a step back. Yes, at really big shops, you have your investment person, you have your fundraising person, you have your accountants, you have your legal. But at a certain point, if you're going to make an investment, if you're not touching all aspects of it, are you really focused on what you need to be focused on? And it might not be you doing the work, but if I just made an acquisition and said here, asset management team, have fun and then five years later said, how did we do? Are we selling this? I don't think that would make me a very good investments professional. Now I lever my asset management team and all the other aspects of our team when we're looking at deals, when we're executing deals and then afterwards when we're managing it, I stay involved all the way to the end. And that's how everyone has to operate. You have to let go and let other people do the heavy lifting on certain tasks. But for you to check out, I don't think that that's positive. We also view it for our young people. How are they going to learn if they're only focused on one sliver of the business? Because the real estate business is simple. You have two clients. The clients are your tenants and the clients are your investors. And you have to service those clients very closely. And all the various people that we have in our business have to work as a team so that you can check all the boxes of all the things that all those clients need. And you know, the tenants are going to need, you know, good property managers, good asset managers, good leasing folks, good construction people to fit out space. You're going to need on the investing side, you know, who's doing the underwriting, who's setting up the financing. And then when you're talking, when you're talking to your equity investors is who's raising that money, who's communicating to the investors? And I think if you are the one who is looking for the deals and trying to execute those deals, you should have a pulse on all those answers. I think that that's important. So I don't profess to be an expert at any one of those things. And any of the success that Slate has had is because we do work as a team. And that's how I continue to learn more, that's how they learn more, and that's how we all improve. So when Slate was, when I joined, our company was less than 20 people. So when you're in a small company, you're wearing a lot of hats as you grow, you do need to build out those functions with a little bit more. I'll call it. I don't know, I don't want to use the word that I thought because I don't want to make it seem like you're putting it into a box. But you have to be methodical and structural in how you set up the responsibilities so that no one drops the ball. Because there's a lot of things happening. But I think you have to maintain people having responsibility of the assets they're buying, the assets they're managing. So when you're setting up a new business, going back to the question in Germany, we were flying over there a lot, small teams to look at assets and ask questions, meet brokers, talk to lawyers, understand structures of leases, understand the financing environment. We looked at deals from 20, even before I started there, 2013, before we did our first deal in 2016. There's a lot of homework we did before we entered that market, when we got a deal that we thought checked all the boxes we descended on that as a whole team. We did all the diligence, and we actually moved two people from our office in Toronto to Frankfurt to start it up. So we immediately put boots on the ground and their job was, okay, you're going to do the management, they're going to report back. You're our guys on the ground in Frankfurt, and, you know, you have to own it. But we're all here to help. Let's hire Germans. Let's be. Let's get as local as possible. And then while we're here, let's find more deals so it doesn't happen overnight. You know, it was those guys, they were great. They're young. One of them is actually here in Chicago with me. He's awesome. One of our investment guys, and it was a great way for them to learn. They built a team around them. They did a fantastic job doing it. They did it with the mentorship of myself and the other partners and other senior people at Slate. We all were going over there and looking and finding more deals. It was all very collaborative. I think that anyone who says they do all those things on their own, I think is lying. To be frank, I'm responsible for overseeing a lot of it, really focused on the new deal front and having a good team around me to help on all the other sides.

Wow, Peter, you said so many good things. And we've now been doing this show for almost a year and a half, and I don't think anyone has yet said so succinctly how the business actually works and the components and what it takes to build an investment platform and the importance that everyone needs to be involved in the whole deal cycle. I also love what you had to say about there's only two clients, the investors and the tenants. That's also something that has not been said on this show yet. So I know our listeners are going to get a ton out of this. I guess what's going through my mind is, I guess you've conquered Canada, you've got your platform set up there, then you decide you need to go to Europe and then the US These markets on their own, they're big. When do you decide to jump to a new country as opposed to just digging in deeper? I mean, why not go invest in 10 different markets in the US before jumping over to Europe?

So it's a good question. And the answer is we did so in the US Is an easy step for a Canadian. We share a border, we're trade partners. Similar laws, same language. There's so many similarities and you're being close in that proximity, it's easy. Canadians are very familiar with coming to the U.S. so in 2010 we started investing in the U.S. our first investment in Europe was in 2016, in 2010. Just to remember where we were at that point. The US was emerging from the financial crisis which was a credit based correction. It was a Wall street correction, it wasn't a Main street correction. It was driven by capital. As capital, both equity and debt was flowing back into the gateway cities, we noticed that there was an absence of capital going to, I'll call it the next tier. So MSAs with over a million people, but not New York, Chicago, Louisiana, San Francisco, et cetera. We said, well, we also are sitting in a place where we actually have Canadian US dollar parity, which hasn't happened too many times in history because Canada wasn't as affected by the financial crisis as the U.S. was. We raised four funds to bring Canadian capital down to the U.S. and invest in grocery anchored strip centers. And our thesis very simply was we know the US but we're not in it yet. Why don't we pick an asset class that we know well, we've owned grocery in the past, we think we understand the business. We always felt that it was food distribution and very defensive. And our simple sales pitch originally was in good times and bad, people need to eat. So whereas a grocery store in New York would have been trading at that point, getting into the 5 and 6 caps again, we could go into Charlotte or Tampa or Naples or you name it, in the Southeast and up through the Midwest and Mid Atlantic and we could buy 8% plus cap rates with the same tenant. We thought that was a mispricing. When we look at investing, it's three things. It's look at your basis. So below market rents, low price per foot, below replacement cost. That checks the box. You try and say go where others are not. That's not be contrarian all the time. It's just saying that the more capital has a way, if it all flows to the same place, of distorting asset prices. So we felt that capital wasn't flowing to places and wasn't pricing the risk correctly. You know, frankly we didn't think those were 8% plus cap rate deals. We thought that those were just like the ones trading for 5 caps, but we could buy them wider at a better basis simply by just going a little bit off where everyone else was focused. And the last one is be proactive. I think we talked about that with how we set up our team. We're vertically integrated, treat your tenants as clients, work really hard to service them. Everyone does well. So if you buy well, you manage well and you try and be a little creative, things work out. And through that we've now built a company which is called Slate Grocery reit. We amalgamated those four funds and listed them on the Toronto Stock Exchange and that owns over 90 grocery acre strip centers in the U.S. so we were here, but we were doing that out of Canada. Part of the Chicago office was getting more people on the ground and that has been so important in Covid when borders get shut down because we do have a good portion of our team here and that was the first step. So the U.S. as you said, is a big place. Where do you go? What market? What assets? There's so much to think about. We found a theme that we thought was really defensive. It was a very unsure time. There was volatility, people weren't sure how the recovery was going to go. And we said, well, let's buy something that we look at as really defensive and we're buying it wider than we should because we're going to our other capitalism very simply. And I think that that is a thesis which we exported to Germany as well. That was the first thing we started buying when we went to Europe. Grocery anchored product, really just grocery stores, all these lidls and again with the same notion. It felt like it was late cycle in 2016. We were right. We just couldn't have predicted a pandemic was going to be the reason. And we said durability of cash flow was important and we found that same similar reasons. We could buy great credit covenant at valuations that we thought were compelling, more compelling than we saw in other markets. So everything we do is very thematic because of our size. We can be nimble, we can be entrepreneurial and go into different places. So as our investment team, our professionals scatter globally, they're always looking for what is that next thing? What is that next interesting place where capital is not pricing the risk properly. Then let's figure out a targeted way of how we go after it and build scale.

It's really wonderful about what you said about the thematic investing to press you a little bit on it though. Certainly there's operators here in the US who have grocery anchored portfolios. You're trying to convince your capital partners it's a great thesis, they love the thesis, but you've never done it before in the us so how did you convince them to go with you having never acquired a property here as opposed to Going to a known operator or same question for Germany. I'm sure there's German investors who know that grocery market inside and out. And they would say, we've got the inside track and these are outsiders. So how did you make that case for your investors to follow you?

Good question. And that was especially pertinent when we went to Germany and we even said it was like a joke. What do some Canadians know about investing in grocery in Germany? And the answer was quite a bit, but we had to walk them through. There's two real answers to that. The first one's the easy one. There's 37,000 grocery stores in the US and it's extremely fragmented. The largest owner doesn't own more than 1 to 2% of them. So there's a lot of fragmentation in the market. And the ability to go pick off single assets is readily achievable. The other thing is some of the, I'll call it the mega funds, the very large and successful real estate investors in the world, Brookfields, Blackstone, et cetera, their funds are so big that they don't want to go buy one $15 million grocery, anchor, strip center. But we can't. So how we tried to build our business is to be better capitalized than the small local operators who are quite good and operate and try and really invest in a size bracket that the big guys don't want to do. Not because the real estate is bad, but just because they're not set up to do that. If you have 15 billion of equity to deploy, you're not doing one $15 million deal. You want to buy a company of these assets, you don't just want to buy one. So there was an ability, in a sharpshooter way, to build scale, given how big the market is. To go back to what we talked about before, I could not have made that pitch about Canada. Canada is too small. There aren't enough grocery stores that trade every year. There would have been no way to deploy that capital in Canada. The U.S. is a really big place. The fragmentation and the fact that capital was flowing to what everyone deemed to be safe and core, it created a window that we hit that to come in and do that. And we did the same thing in Germany. You know, there was. If you got a couple hundred million of these grocery stores together, there was a lot of people showing up to buy them. But individually, these are 10 to 20,000 square foot boxes, 1 to 3 million euros each, that people don't get out of. A lot of people don't get out of bed to do that. So again, go where others are not. You have to be a little bit different. You have to be willing to roll up your sleeves and maybe look at it a certain way. And we've managed to build scale in both. Once you build scale, you can start looking in a larger way of buying portfolios. We bought two portfolios of grocery anchored strips in the US since the start of COVID That would have been tougher to do in 2010. But where we are now and what we've built, we are a very large grocery landlord in the US and there's still so much more that is fragmented.

That was an amazing statistic about the 37,000 grocery stores and the largest owner only having a couple percent. That seems like a very opportunistic space. Now that you're set up here in three different countries. Well, really four. Are you more likely to pick another investment thesis, go after another asset class here in the US or are you thinking about maybe, maybe going to buy grocery anchored in Asia, for example?

It's a good question. The markets we picked to invest were very much because we felt there was a similarity in laws and customs and how improper, like really property rights and Asia's a different market. I think that our goal was when we were sitting originally in Canada, we could do everything, any asset class, coast to coast, we could do that. To say you could come to a market like the US and do that is a lie. And we had to start thematic, lay roots, build a team and over time expand to do more of the things that we originally got so well known for in Canada, which is we could be opportunistic and value add investors. We can tackle any asset class and we're always looking in different places to find that value. We're at that point now, I think both in Europe and in the US we have lots of boots on the ground. We're looking at lots of different things. Covid and the response to it and the fallout from it is really tough for a lot of people. But it's also creating opportunity from an investing perspective, like all cycles, people who are a little close to the sun. It's really capital structure is one thing that could upend a real estate investor. The other one is changing requirements from the tenants. And right now you have both. And we're seeing really, really interesting opportunities across all asset classes in all the markets that we're in. So I think when we look at Slate in the next five years, it's going to be diversifying into different markets and asset Classes, but within the countries that we operate in right now.

Perfect. So I want to talk about how you set up the Chicago office, because on the show maybe we don't talk enough about what is that the team of professionals who you need. So I think you mentioned attorneys, maybe some brokers. But when you put down roots in Chicago, what was the deal team that you needed to set up and how did you go about finding them?

That's a good question. So I'll kind of lay out all the functions that we have within our platform and I think that from there, some you can have in the mothership, so to speak, and others I think really do need to be local. So I'll start with the mothership. You know, tax, legal, capital raising. These are functions that spread across all our silos, all our investments. When you think about finance and reporting, you could say that that could be centralized, but we feel that our accounting teams need to be plugged in with our asset management teams. Point of accounting is to report on what's happening. And you can't just be in a back office somewhere saying, oh, here's your balance sheet, here's your income statement. It doesn't, it loses meaning. You have to understand the business so that you understand what's going on so you can explain what's happening in those statements. So we view our asset managers and our financial reporting really just have to be together and that means they have to be local. So asset management first and foremost, and what we think asset management is, is controlling the leasing decisions and capital decisions. We third party lease and we third party property manage all of our assets because we think that you want to get best in class partners and intelligence locally, wherever you are. But we have to be in charge of, I'll call it the landlord decisions. So those two things, leasing and capital. So I think it's important for asset managers to be local and it's important for deal folks to be local investment folks. Because if you're originating in a market, you don't have to be in every market, you know, but you do have to be like if you're based in Chicago and you're trying to originate deals in Florida, well, you're going to be in Florida a lot, but that's okay. You can get on a plane and do that. So it's less about having them specifically in New York or Chicago or Florida or Nashville or whatever. Right. It's not necessarily about that, but it's about having Americans boots on the ground that can very easily get to anywhere they want to get you. We picked Chicago because it's one flight away from any market in the US and it has a major airport we could also get internationally. So the first folks that we needed because we own two office assets in Chicago in the Loop, was hiring local asset management talent. When we first bought the assets, we had some of our team in Toronto helping out. We wanted to transition that. That was step one. The next thing was some deal folks. You know, I came down, I talked about one gentleman on our team who went over to help set up the Frankfurt office. We repatriated him, and he's here as well. And one of our founders also moved to Chicago, and we from there, our approach is really to hire young people. You know, we are here to help and train, get everyone going in the right direction. But the average age of our company is 33. So once we set up a seasoned asset manager, we all came from a. I'll call it a deal and investment perspective. And then it was, let's hire young people, let's train them in our culture, let's train them in how we think about things. And we're going to grow our own investment in asset managers locally with young talent. That's our approach. It's not the only approach. You can hire more seasoned people, but I think those are the functions, and that's kind of how we approached it. So we have eight people now in Chicago. We're growing. We're hiring interns out of college programs, and that's how we want to grow our team. We'd rather do it organically, because I think that that's how you get new ideas. That's how you get that fresh energy and frankly, the motivation. Someone who's going to come here and say, hey, you're an old guy. And I don't. I think there's a better way to do this. And I'm going to say, awesome. Let's hear it. So I think that's how we're going to improve.

I think you're going to get a lot of calls after this interview. So, because we do have a lot of college students listening, that's wonderful to hear that you're still bringing on new talent and again, training people from the ground up. I mean, that's how I started in the business. Someone gave me a shot, and I was at my first company for 17 years until we sold it. And we all went together. It was a great story and a great way to learn.

I would love to get those. I'll even go one step further. It's recruitinglateam.com whoever wants to apply, feel free. Wow.

There you go. That might also be a first on this podcast where you're actually hearing a place to apply for a job. Well, this is fantastic. We only have a couple minutes left. So what other advice would you give for someone who's looking to get into the business, where to start out.

So it's funny, I laugh because I didn't. I like to be around smart people, but I often don't take too much advice and I don't like to give too much of it. But really, it's just the world is a big place and you always have to be yourself. You know, the only thing you can control is the effort you put into something and your attitude. And you should be looking for smart people who can mentor you and help you grow. I think that if anyone starts by thinking I don't know much and I want to learn, I think that attitude is going to serve you well. And you know, the positions and the compensation, the rewards and the accolades will all follow. But in the end of the day, it's just about what you know and you know. I'm sure you feel the same way, James. The older you get, the more I feel like I don't know much and that there's still so much more to learn. And you know, if you come into a place hungry and eager with a great attitude that's instantly recognizable and I think it's differentiating factor that can't be replicated. So don't try and be someone else. Be yourself and just put as much as you can into it.

Wonderful. And any mentors that you can think of now, maybe early in your career or today, or ways that you continue to improve yourself, books, you know, podcast what you know, whatever it is, how.

You continue to grow, you know, mentors is a good one. I think it's the, it's always important and it always changes. And it's funny as you grow, sometimes your mentors become friends and you know, you're. People think of mentors sometimes has to be someone older than you and who knows more and maybe earlier in your career. Traditionally that's how it works. But I think people younger than you, junior to you, are also sometimes amazing sources of insight. And the more you can separate yourself and your ego from it and be willing to learn all those things that you said you could have a tidal weight of information coming your way if you want. Between news, social media, podcasts, books, I like to go to people who I think did something interesting or maybe did something a little bit different and I try and dig in a little bit deeper and say, what did they do? And it's not just in real estate. You know, reading books about people who built successful businesses and how they did it. You know, how you do this podcast is really interesting. I think stories are important and there's a lot of people in this world who have pretty crazy stories and there's always some tidbits that you can pick up from those and I think the biggest one is there's no substitute for experience. So you just have to get out there and be humble, be open to learn, and just keep at it every day.

That was awesome. Peter. Thank you so much for joining us. Such an incredible story and advice for our listeners. We do have a lot of aspiring first time investors, but we also have successful investors who maybe they have a dozen or 20 people at their company. They're in one market, one asset class and they're looking to expand. So your story and your company's growth is a great example of how to do that. So really appreciate your being here with us today.

Thanks. This was fun. Thanks for having me and thanks for everyone tuning in and listening.

Wonderful. This is your host James Nelson of Real Estate Investing Live from New York. If you have not already, please connect with me amesnelson NYC either on Instagram, LinkedIn or Twitter or hey, why not all three? And and while you're at it, please tell your friends, subscribe on Spotify, itunes. Wherever you get your podcast, keep your comments coming. I love hearing from you and I want to help you become the most successful investor possible. So that's it for this week and we'll speak to you next.

Thank you. Again, A Different approach to putting our clients first Avis and Young's Tri State Investment Sales Group sells multifamily office, retail, development and specialty sales throughout the New York metro area. As experienced thought leaders in our industry, our 35 member group is available to help you make informed investment decisions by advising you on your current holdings or identifying new opportunities in the marketplace. Our one unified team is built on an industry unique platform which promotes unparalleled collaboration and teamwork. We share core values of hard work, integrity and expertise. We put our clients first providing tailor made strategies to achieve superior results. Please Visit us at aytristateinvestmentsales.com and follow us on Twitter, LinkedIn and Instagram amesnelsonnyc to learn more. Thank you for tuning in this week to Real Estate Investing Live from New York. Please join your host James Nelson for another program next Tuesday at 7pm in New York, 4pm Pacific Time on the Voice America Business Channel. All shows are rebroadcast on Wednesday mornings at 7:00am Eastern Time and 4:00am Pacific Time, as well as always on Demand. We'll talk again next week. Sam.