At 20 years old, Canadian Real Estate Investment Trust (CREIT) is the oldest real estate investment trust in Canada. And with a business model still focused on acquisitions, property operations, and financial management, the company has developed a portfolio, valued at more than $4.7 billion, that continues to grow—in no small part because of Adam Paul, the company’s executive vice president of investments and leasing. Here, we talk to him about his own aggressive investment in his first business, the networking that led him to CREIT, and the importance he places on collaboration.
Advantage: You ran your own company for six years before working for someone else, during which time you made your first investment in real estate. Talk about that experience.
Adam Paul: I’ve always been a driven and entrepreneurial person. Starting my own business while I was still in school seemed natural. During that time, I got involved in my first real estate investment. I pooled whatever capital I had together with three friends of mine, and we invested in a small multiresidential property. That was a great learning experience.
What made you shift to working for someone else?
I studied business in university and intended on obtaining my chartered accountant [CA] designation. So, when I graduated, I sold my business and joined PricewaterhouseCoopers [PwC]. I viewed the CA designation as a great foundation for a career in business. I had never intended on practicing accounting long term. At PwC, I focused on real estate; I knew I wanted to be in real estate full-time but as a principal, not an intermediary or advisor.
Where do you think your drive and entrepreneurial spirit come from?
One of the things that got ingrained in me very early was to be financially independent. Life is challenging enough without having significant financial pressures. That initially drove me early on. Then it became clear that if I focused on learning, growing, and having fun, the financial aspect would be fine.
How did CREIT land on your radar?
As I was completing my CA during my fourth year at PwC, I turned my attention to the next step. Then I was just at the right place at the right time. My first interview was with CREIT. I applied for a position that I wasn’t a great fit for but figured I would establish contact with CREIT.
I was fortunate because one thing led to another, and Stephen Johnson, CREIT’s CEO, ultimately hired me for a different role, which was working on acquisitions—where I really wanted to get involved.
Now that you’ve been there awhile, what do you think sets CREIT apart?
Our long-term commitment to being disciplined and focused on high-quality assets. That’s come at the cost of larger aggregate growth, but where it counts most—which is growth in earnings per unit and the quality of the business—it’s served us very well. The other things that set us apart are the strategic partnerships we have formed over the years.
Starts his first full-time company, Ace Property
Sells Ace Property
Obtains a chartered accountant designation at PricewaterhouseCoopers
Purchases first real estate investment property
Joins CREIT as a part of its acquisitions group
Becomes the VP of investments
Gets appointed to executive VP of investments and leasing
Primarily with developers, but with other real estate owners as well. These relationships have provided us with opportunities to co-invest in exceptional real estate that is not made available to the broader market. It’s been a competitive advantage for CREIT.
You oversee a number of employees and emphasize empowerment and collaboration. Why are these important?
As a business grows, empowering the right people is key. Collaboration is critical to maximizing productivity and, ultimately, success. In terms of how you do that, I believe it’s about encouraging communication and supporting the growth of people.
People here wear multiple hats. Someone in our investments group can be working on an acquisition or a development or even leasing. If you go back 20 years, this would have been common, as the industry was [composed] largely of generalists. But the younger generation has typically evolved in a way where they’ve become specialists; we’re trying to address that, as there are benefits to developing people with multiple skill sets.
Any pet peeves?
The emphasis on distribution or dividend yield. Investors, primarily certain retail investors, sometimes make a comparison between companies based on their yield—or the annual distribution/dividend divided by the stock price. A company that retains a meaningful amount of operating cash flow [that] is successfully reinvested in the business produces more organic growth than an entity that pays out most or all of [its] operating cash flow. That entity should trade at a lower yield, all other things being equal. Occasionally, there is a perception that a higher distribution yield is likely to lead to higher returns. That simply isn’t the case.
Looking back on your career, what do you think accounts for all your success?
Any success I’ve had is a result of hard work, working with great people, having wonderful opportunities, and good luck. But success should be measured over a long period of time. Hopefully I’m in the early innings from a career perspective.
THE BOTTOM LINE
Executive VP of investments and leasing
Years in the business
Where did you start your career?
PricewaterhouseCoopers, after starting and selling my own company, Ace Property.
Describe yourself in three words
Driven, loyal, steadfast.
Advice to those just starting in finance
The harder you work, the luckier you get. Also, notice and take advantage of opportunities when they appear. That is often the difference between having success and not.