If you had a billion dollars, how would you invest it?

March 7, 2020
This intriguing question set the tone for Toronto CREW’s first 2020 Professional Development Building Blocks session about the Fundamentals of Investments, hosted by Diamond Sponsor Bennett Jones LLP on February 27.
 
Building Blocks is a members-only lunch-time series aimed at building knowledge on the principles of commercial real estate.  
 
This sold-out panel session opened with an overview of investment fundamentals by Dr. Cynthia Holmes, Associate Professor Ted Rogers School of Management at Ryerson University. Dr. Holmes took attendees through how a real estate investment is valued, the various metrics investors use to make decisions such as capitalization (cap) rates and internal rates of return (IRR), as well as the use of leverage.  She reviewed the factors that impact investment decisions including strategy, market and risk. 
 
Patricia Arsenault, Executive Vice President, Research Consulting Services, Data Solutions at Altus Group followed this with a look at market information, how Canadian markets and asset classes have evolved over time and emphasized that investors integrate this perspective into the decision-making process.
 
“It isn’t “one size fits all” for property investors. Different investors have different goals and strategies – the same property coveted by one investor may be undesirable for another,” reflected Patricia Arsenault.
 
An investment case study presented by Anna Kennedy, Chief Operating Officer at KingSett Capital, brought all the points presented by the panelists to life through an example of an opportunistic, higher risk strategy.
 
“You must clearly understand your investment strategy, your targeted goals and levers of success in achieving those targets,” recommended Anna Kennedy to attendees looking to build their investment knowledge.
 
In wrapping up this informative session, moderator Marie-Josee Turmel, Director, Real Estate Investments, Canada Post Pension Plan, asked the panelists how they would invest a billion dollars. Cynthia Holmes would consider other investment goals such as sustainability and housing.  A diversified approach would be Patricia Arsenault’s preference.  Anna Kennedy identified multi-residential as a solid option.
 
These responses illustrate that investment decisions vary based on investor profile, strategy and risk tolerance.
 
Planning is already underway for the next Building Blocks session scheduled for May 28.  Watch for details at www.torontocrew.org/events.