Public vs Private Market, the comparing of public and private markets has long been a debate topic to the question of where to secure one’s fortune. For us, the conversation always comes down to the operative word of our business: liquidity.

 

The public market’s liquidity is very much a double-edged sword. While the public market can be swayed into fast, lucrative returns, the opposite is also true. With the constant connectivity of the modern-day, people hear about stock news the moment it happens, allowing for knee-jerk decision-making causing markets to crash much faster than they used to. When a system permits investors to all pull out at once, that is when a market is heavily affected. In other words, liquidity = volatility.  So while yes the public market has liquidity, the consequences of mass liquidity affects all the stock market as a who, regardless of its performance.

 

This is not to say the public market does not have benefits. Ask anyone who invested in Zoom in March of this year and they would probably sing praise to the public market until they were hoarse. As well, anyone looking to cash-out of the public sector does not need to wait patiently . Generally liquidity can be achieved inside of 36 hours.

 

The private markets can see its own share of accelerated growth and unlike the public markets has low liquidity.  However, with low liquidity, volatility also decreases.  If you think about the price of your house when a major event happens, and the stock market crashes, what happens to the value of your house in that instant?  Values of private real estate simply don’t react that fast.  To give an analogy, we like to describe the private market as a vessel on the sea, carrying its capacity in cargo. If that vessel were to turn around, it would take a long time and do so in a predictable manner. During that time, anyone on the vessel could make adjustments and changes to reach their suitable outcomes.

 

If the private market is a vessel, the public market is a windsock that could violently flail at seemingly any given moment with no apparent direction. Sure, the ‘wind’ could be in your favour for now, but if your investments drop by 10% to 12% overnight due to COVID, you do not have the time to react.

 

Private investments are considered to be an illiquid investment however, ‘illiquid’ does not mean you cannot retrieve your money from the private sector. It simply means time will be required in order to satisfy the liquidity.  In the case of your home, in most cases it would take more than 24 to 36 hours to sell, close and receive your funds in your account.   Generally, anywhere from 30 to 45 days or more is a typical case for cashing out on your home.  For InvestPlus, we have working capital to allow for limited liquidity.  Anything more requires planning our cash outlay and timing.  Low volatility also allows for private companies to react to unpredictable events and make more calculated decisions as a result of having that time to react.  It also helps private companies to grow and leverage the funds raised to create a successful business instead of being in the position of liquidating investment dollars.  For instance, in just a six-month time span, InvestPlus REIT has seen a 57% growth in asset value and continue to diversify our portfolio in western Canada. , ‘

 

Its this disparity of stability between public and private markets that drives government programs to diversify their investments. Look no further than the Canadian Pension Plan, which invests nearly half of Canada’s retirement savings into the private market for better stability. It is worth noting that real estate makes up 40% of the CPP’s private investments — a statistic we hold with pride.

 

The pattern on display is that when looking to invest in the long term, companies, organizations and individuals alike are leaning towards the private market for a portion of their investment. Some simply do not have the time to monitor their stocks not only on a daily basis but on an hourly basis. Instead chose a market that can react accordingly and is not correlated to the public market.

 

About InvestPlus Real Estate Investment Trust

 

InvestPlus Real Estate Investment Trust (IP REIT) is a private real estate investment fund, based in Calgary, Alberta. InvestPlus REIT is a growth-oriented real estate investment trust focused on increasing unitholder value through the acquisition, ownership and management of commercial and residential properties in primary and secondary markets in western Canada. Management has transacted over $100,000,000 in buildings comprising of 23 buildings in the provinces of BC, Alberta and Saskatchewan. The current portfolio is appraised at $49,500,000 and comprised 10 buildings in 5 different cities in western Canada.

 

Read the top 5 reasons to invest in a REIT.

 

For additional information, you are welcome to reach out to InvestPlus REIT directly, however for offering documents and additional information it is best to reach out to Klint Rodgers, the Assoc. VP of Business Development and Registered Dealing in BC, AB and ON with Axcess Capital Advisors Inc., our lead Partner and Dealership as it relates to capital raise across the country. Klint can be reached at Klint.Rodgers@AxcessCapital.com or you can book a Zoom meeting with him through the following link: Book Meeting Now!

 

Is Office Over? As an influx of employees around the world become accustomed to working from their homes due to isolation and social distancing, there arises a growing question: Is this the end of physical office spaces? While I for one will always jump in with an opinion or prediction based on the information I have at hand, these days it is hard to think what will happen next.

 

It seems like a reasonable conclusion at the onset, after all in the short-term, some companies across the country are reporting a net increase in productivity. Many employees love working from home — after all who wants to sit in traffic while commuting to work? They can also look after their children and forgo having to pay for daycare and last but certainly not least, working from home means the ability to focus on getting work done without interruptions. While true in many cases, there are some challenges to running a business in a completely remote environment.

 

When I entered the work force in the mid ‘90s, Flex-Office and working from home began trending, with the word on the street being that it was over for office. The internet was gaining popularity and connectivity, although cumbersome, was achievable. With the use of faxes too, working from home was possible and even efficient. Since then and pre-Covid, you would not have considered that office could be over. Skyscrapers still dominate the skyline and offices continue to be erected.

 

Now that Covid is upon us, the same question arises: Is it over for office? Well, companies have since learned that the benefits of working from home were outweighed by other key factors, namely:

 

1. Retention – Keeping good people proved to be difficult.
2. Leadership – Finding people within the ranks to promote within their company was also difficult.
3. Training and Maintaining a Company Culture proved difficult especially with new employees.

 

All of the above have one thing in common — the lack of in-person interaction you do not experience even if you are connecting everyday online.

 

In a clip from the Fast Company Impact Council, Author and Motivational Speaker Simon Sinek poses that many leaders underestimate the effort that goes into running virtual workspaces. Sinek says that although productivity is seeing an increase with employees working from home, humans are social animals that need to be in the company of others in order to maximize creativity and teamwork potential.

 

“It’s very hard to brainstorm or have any creativity like this [over video call], we need to be in the company of others,” says Sinek in the video clip. “We need to be able to interrupt each other, write things on walls, and have that wonderful, magical energy, and then go for lunch together to build that relationship.”

 

There is an element that exists in the office that you simply cannot get from home. It is that energy when you see coworkers working together to achieve a common goal. It inspires you. It moves you. It is also the ability to take someone aside and have a brainstorming session over a steamy cappuccino. You cannot experience this from Zoom or other online video conferencing.  On a personal note, I can tell when we are videoconferencing our board meetings, some members miss out on the intricacies and interactions that exist when the other members and myself are in the same room. It is hard to have a simple one-on-one conversation to ask about how their family is doing or ask about how their relative’s surgery went with a group video conference.

 

Being in sales and interacting with people on a daily basis, I cannot imagine getting the same level of a relationship you can build from a videoconference vs in person. Just the other day we had an in-person meeting with a consulting company that works on behalf of cell-phone carriers and building owners like us to install cell towers. During that meeting we learned more about how we can further that relationship vs if we were on the phone or videoconferencing. We enjoyed each other’s company and values and can see ourselves doing business together.  That is the value of interacting in person.

 

What Will Change?

Though I do not foresee the end of the traditional office environment, I believe that with this new option for employees to be able to work from home, companies are going to utilize offices differently.

 

I do not see office continuing in the same matter as pre-Covid but rather the custom office space model taking off. Recently we have seen large companies like Facebook and Microsoft   investing in newly-designed office spaces that allow workers to come and go as they choose. This opens up the possibility and flexibility for employees to come to work and utilize common work areas but at the same time work from home one or two days a week.

 

One of our properties, Britannia Business Centre (BBC) functions as one of these designated spaces, providing open workspaces for any sized company. It is designed to allow companies to meet with their employees when needed and utilize the space more efficiently. Some solutions we have are open-concept ‘bull-pen’ style offices, coworking space, shared offices, incubator spaces and virtual office. We even have a ‘Zen Space’ for those needing to get some fresh air to contemplate new ideas. This allows for employers to manage their cost and have a place to interact with their staff without the long-term leases and space commitments that exist with typical office space (although we also have this option as well).

 

This custom office model began to take traction back in the early 2010s — companies began providing co-working spaces and office rental services to individuals and enterprises alike. By renting an office space or a conference room on an ‘as-needed’ basis, they generate more profitability, especially for companies that lack the overhead of a corporate office. The community atmosphere this model allows for is the very reason I do not think this is the end of offices. Proven by the amount we all miss our friends and family during this pandemic, at the end of the day, human beings crave each other. The new office will provide balance of the social interactions we have learned is necessary within a company but also manage costs for the employer.

 

To learn more about custom office workspaces and how they are changing the office environment, visit Britannia Business Centre at www.calgaryofficeplus.com.

 

To find out more about the future of office real estate, contact InvestPlus REIT, where we always have our finger to the pulse of the changing Canadian real estate landscape.

 

About InvestPlus Real Estate Investment Trust

 

InvestPlus Real Estate Investment Trust (IP REIT) is a private real estate investment fund, based in Calgary, Alberta. InvestPlus REIT is a growth-oriented real estate investment trust focused on increasing unitholder value through the acquisition, ownership and management of commercial and residential properties in primary and secondary markets in western Canada. Management has transacted over $100,000,000 in buildings comprising of 22 buildings in the provinces of BC, Alberta and Saskatchewan. The current portfolio is appraised at $49,000,000 and comprised 10 buildings in 5 different cities in western Canada.

 

Read the top 5 reasons to invest in a REIT.

 

For additional information, you are welcome to reach out to InvestPlus REIT directly, however for offering documents and additional information it is best to reach out to Klint Rodgers, the Assoc. VP of Business Development and Registered Dealing in BC, AB and ON with Axcess Capital Advisors Inc., our lead Partner and Dealership as it relates to capital raise across the country. Klint can be reached at Klint.Rodgers@AxcessCapital.com or you can book a Zoom meeting with him through the following link: Book Meeting Now!