The investment environment today
The word on the street right now is if you truly have a deal you’ll find money for it if you have a track record and you’ve raised money in the past.
We’ve talked with 4-5 of our best partners and they’ve all said if you find something interesting, bring it to us. Now is when we really want to get active. That’s important because a lot of people get nervous in a time like this.
I’d say many investors think there’s going to be a lot of opportunity. We would like to buy another $50-100 million worth of property this year if we can provide a good investment opportunity.
What feels different in this cycle is the empathy that’s out there with the banks and other partners. We’re all in this together. That’s a big difference from 2008-2009.
Creating a world-class investor experience
Investors want to know what’s going on now more than ever. People like good news, and they can accept bad news. What they really don’t enjoy is surprises. My number one goal right now is to over-communicate with all critical stakeholders.
We are sending out messaging to investors every two weeks now. We already provide very comprehensive quarterly updates, but now are also providing updates on what we see happening in the world.
People say the return is all that matters, but it really isn’t the only thing that matters.
We want to provide risk-adjusted returns to our investors that are exceptional. We also want to provide them with a world-class experience. Real estate requires a lot of capital and that comes from investors. A mentor taught me early on that the experience with the investor goes a long, long way. And a lot of times investors have lots of investments with lots of different groups. One way to stand out besides your returns is the experience you give them.
You create experience through the little things. And there’s a lot of ways to deliver that experience. Juniper Square has exponentially increased our ability to do this.
We have 168 investors. By this point, most of them have gotten used to Juniper Square and know how to use it well. While we tell our investors to reach out to us any time, we don’t hear from them a lot because the portal provides almost everything they need to know. If there is something they can’t find in there, obviously we’d love to hear from them, but they continue to log into the portal and get everything they need on their own. It’s been great.
If I had to recreate the Juniper Square investor experience just by hiring people to deliver the same level of service, I’d estimate it would take 4-5 people to do all the things that Juniper Square can do. It’s the biggest dollar-for-dollar value we get across any of our software platforms.
The impact of COVID-19
Once shelter-at-home orders are lifted and people start to get out I think it’s going to be a reality shock for a lot of them. We get to hear from people on the front lines of the economic world, but there’s a lot of people that don’t have access to that or think about the world from a finance and economic perspective. I think there’s going to be a delayed reaction for some people that get out and realize how much has changed. It’s not just that we’ve been at our house for a few weeks and are going to go back to the world as it was before.
It’s interesting how Zoom has become a verb so quickly. The percentage of people 60, 70+ that haven’t adopted technology in the last 10 years but have been forced to in the last 45 days is huge. I don’t think those people are going back.
I would say the tailwinds behind technology just ramped up 10x and we will continue to innovate through the use of technology more than we ever have. What’s happened in the last 45 days have cut that window for people that are not willing to adapt and have infinitely increased the opportunity for the ones that are.
There are so many ways technology cuts waste. I look back and often ask myself why were we spending money on all those things? Some of those expenses don’t make sense going forward. That mindset is a good thing. It actually can in a weird way make things pretty exciting.
Two years from now I think you will see companies that are much better having gone through this pandemic and companies that have gone away. A key deciding factor will be how they’ve adopted technology.
Embracing technology is a culture thing. You can’t just walk in one day and say we’re going to start using technology and everybody in our team’s going to learn to use it and they’re going to love it. Some companies are not going to be able to change their culture quickly. Being on Zoom or Slack is one thing, but to start embracing Juniper Square and using deal management platforms and software like that requires a higher level of adoption and buy-in.
The companies that have that culture of innovation will use the next 18 months that everybody’s trying to reconfigure their business to get that much further ahead.
When this first started I kept hoping we would get back to where we were before COVID. As the days went by I realized that was less and less likely, and had a few days where I was pretty depressed about that. But then through reading material from people like Mark Cuban and Marc Andreessen, I just flipped the question on its head and asked myself do I really want to go back to a pre-COVID world or should I be excited about the way the world is going to reposition itself going forward?
For me, the answer was clear: there is so much opportunity moving forward. Give yourself a reset and ask yourself: what does the world I want to live in look like?
Then start creating that now.
Listen to Chris Powers and Juniper Square's Brendon Sedloff on episode #37 of the Fort Podcast.