Working Capital The Real Estate Podcast

Growing a Real Estate Development Business with Jeff Hull|EP36

Jan 13, 2021

In This Episode

Jeff Hull is the president of Hullmark Developments Ltd. The company invests in commercial buildings in neighbourhoods like Parkdale, West Queen West and Riverside; their latest project is a new timber office building in Liberty Village that will house Universal Music Canada. Hullmark has grown rapidly over the past 7 years, changing offices three times and growing from five to more than 40 employees.

In this episode, we talked about:

  • Their family’s business history – Hullmark, a real estate investment and development team, as it started with his grandfather, now Jeff is carrying their business legacy
  • Jeff’s passion about real estate and how he started
  • Hullmark’s real estate strategy – hyper urban-focused
  • Asset management, development, private equity, tenant experience
  • And MUCH MORE!

Resources and LInks:

https://www.hullmark.ca/

https://www.linkedin.com/in/jeff-hull-4503773/

 

 

Transcript

Jesse Fragale (1s):

Hey everybody. This is Jesse Fragale. Before we started this episode, I just want to say thank you so much for everybody that keeps on listening, it really is amazing to me and I can’t. Thank you enough. What would really help us out is if you enjoy the show to go over to iTunes and leave us a five star review. Also, if you have a favorite episode, what would be great is if you could share it on social media, whether that’s Facebook, Instagram, or LinkedIn, anyways, enjoy the show. Welcome to the working capital real estate podcast. My name is Jesper galley. And on this show, we discuss all things real estate with investors and experts in a variety of industries that impact real estate. Whether you’re looking at your first investment or raising your first fund, join me and let’s build that portfolio one square foot at a time.

Jesse Fragale (47s):

All right, ladies and gentlemen, you’re listening to working capital the real estate podcast. As usual. I have a special guest on the show today. His name is Jeff Hall. Jeff is the president of hallmark developments and they are a real estate developer that has a long and storied history in the Toronto area. Jeff, how’s it going?

Jeff Hull (1m 6s):

Good. I’m

Jesse Fragale (1m 7s):

Doing great. Thanks so much for coming on. I’m excited about this episode. We actually, I don’t actually, yeah, I don’t think we’ve actually talked specifically with a real estate developer. So it’s going to be, it’s going to be cool to get your point of view on things, but I guess just to take a step back as we always do here, and just talk a little bit about your background in real estate and, and a little bit of the, the history of hallmark.

Jeff Hull (1m 33s):

Sure. Happy to Jesse. So hallmark this year is in its 70th year of existence of 70th year anniversary this year. We don’t, we, I mean, we don’t talk about our long history probably enough, but the company was started by my grandfather in 1950. When as a plaster, he bought his first couple building lots and built a couple of homes around like Glen Grove and Eglinton or Glen Grove and Bathurst, I guess. So since then, I mean, today, what hallmark is, is a diversified vertically integrated investor developer hyper focused on downtown Toronto.

Jeff Hull (2m 19s):

So that means we buy, develop and hold for income office retail and multi rise real estate. And then we also invest as a private equity capital provider to condo developers and also lend private debt as well, mostly on land and mostly on land that we would otherwise be buyers of. So land that we can really understand very well. So I’ve been leading hallmark for 12 years now when I took from my grandfather.

Jeff Hull (3m 1s):

And at that point we were really just a traditional real estate developer where we had land. And we had partnerships with active development partners, like try to help, for example. And over the last 12 years, we’ve sort of built this new iteration of home where we’re sort of investor developer managing our own projects building on that private equity model that my grandfather had before with the developers and adding on private debt as well. So our portfolio now is probably around a billion dollars, somewhere between 40 and 50 assets, we have taken on institutional and ultra high net worth capital to help us grow.

Jeff Hull (3m 47s):

And the, the strategy has been successful so far. And I think that there’s a subject to obviously changing market trends. We, we don’t see any reason to change what we’re doing. We feel like we have a pretty good nation. So I think the future is going to be more of the same for hallmark.

Jesse Fragale (4m 7s):

That’s great. And, and for you personally, Jeff, we all, all of us in real estate, at least that have been doing it as long as some of us has have in some of the guests we’ve had, there’s obviously a passion for it. So for you personally, what was that initial foray within, I guess, the family business or when you were younger, what was that initial thrust into, into real estate?

Jeff Hull (4m 29s):

Well, to be honest, hallmark was not a very large organization. When I joined, it was two people, my grandfather and a bookkeeper. So before I was invited in by my grandfather, there, wasn’t really a lot of, sort of talk about joining the family business, but listen, like obviously I had known about the projects that my grandfather was working on. And so just by by association, got to know the real estate world fairly well. Once I, once I joined without having a background in real estate, I had to learn the business relatively quick.

Jeff Hull (5m 9s):

I was able to work with my grandfather for about a year before, unfortunately he passed away, but what was exciting, but also scary at the time was taking over a business that had one other employee. We had, we had some assets, but not, not a lot of projects that had a lot of runway ahead of them. We had an opportunity to sort of change the business. However we saw fit to take advantage of sort of the next real estate cycle. This is back in 2008. So that is really how I was able to apply the passions that I had outside of real estate within a real estate company.

Jeff Hull (5m 55s):

So for me, I’m 39. Now at the time I was 27, I’m very passionate about cities and I’m still am passionate about cities and believe that the cities are one of the best inventions of the human race for a whole number of reasons, but in particular today, the capacity for cities to create connections, create wealth and do so in a way that’s much more environmentally sustainable for the, for the future. So that was one thing that I was very passionate about coming into a real estate organization. So applying that to a real estate strategy was something that was really important to me.

Jeff Hull (6m 36s):

And so before, like hallmark was mostly sort of suburban residential developer. And so we pivoted over the last 12 years to be hyper urban focused. And then also the, a big part of our strategy is focusing on design and in the markets where we started to operate there, wasn’t really a lot of focus on design. And so we thought we could differentiate ourselves by taking that passion that I had for design and applying it to real estate business. So I think that’s a roundabout way of answering your question, but I, I sort of came in to a real estate business with passions that I was then able to apply.

Jeff Hull (7m 23s):

And as a result, I’m very, very fortunate to be able to run a real estate business. That’s had success with some core strategic elements that I’m passionate about. We’re not just making widgets here at hallmark, which is something that is incredibly important. And I think without having that sort of urban and design focus, that would be hard to get excited about coming to work every day, because I know this Jesse, but real estate development is not for the faint of heart. There’s a, there’s a lot of, a lot of challenges, a lot of hard work, a lot of setbacks along the way to, to a successful project.

Jesse Fragale (8m 5s):

Yeah, for sure. That’s a great answer. And just for a little bit of context, so when your, your grandfather, I believe his last project or the last project called Merck was working on was hallmark center, if I’m not mistaken. And, and how long were you working with him before he passed? In terms of what’s what sounds like a bit of a, an apprenticeship so to speak?

Jeff Hull (8m 24s):

Yeah, so unfortunately, I mean, my grandfather, when he was, I think it was 82, purchased the lands with tri Del for the hallmark center project and, and these types of large skeleton million square foot mixed use projects take many, many years to just get designed and improve level-one built-in and complete it. So he was going to look because he was going to live forever. It wasn’t, wasn’t an issue at the time, but I guess reality unfortunately came home to, to roost and be found out that he had a late stage cancer.

Jeff Hull (9m 4s):

And that’s when I was able to come on and start learning from it. Unfortunately it was only a year, but I was able to learn quite a lot from him over, over that year. And it happened to be during sort of design development stages and approval stages of this hallmark center project. So when, just before he passed, he asked me to stay on specifically to complete this project, which was for him, the culmination of, of his career. And, and essentially his legacy was, was wrapped up for him in this hallmark center project. So incredibly important project financially for us because of its scale. But I think more so emotionally from a family perspective, getting that project completed was, was incredibly important.

Jeff Hull (9m 48s):

But again, along the way for the short time I worked alongside him for him was able to sort of take a lot of his, a lot of the things that you’ve learned over the years and was able to start applying them, you know, in the next sort of iteration of Palmer.

Jesse Fragale (10m 4s):

That’s great. So you talked a little bit about a suburban developer in the past, and you, you come in to your own a little bit here, and you’re talking about developing a with design in mind, cities in mind, talk about that, that transition and bringing hallmark to where at least I know them today where they are, these technical term, I think is funky, but they have very unique projects, urban, like you said, what was that transition like?

Jeff Hull (10m 32s):

Well, it wasn’t, it didn’t happen overnight. I think we came up with the idea to once, once we had our hallmark center project underway, I mean, try to all as a partner is fantastic, has been fantastic and we’re still partners with them today. They basically can do as much as, as you need them to do on any project. So once we got that project underway, it was basically from our perspective, although try to, we’ll probably say differently on cruise control. So we were able to focus on what’s next for us. And we, we decided that residential real estate development, something we wanted to continue to be involved in, but the, the cashflows in residential real estate development are very lumpy.

Jeff Hull (11m 20s):

So write a big check to buy the land. You write a couple other big checks to finance the approvals of the project itself. And then hopefully five years later, you get a bigger check back at the end of the project. Then, then all the cumulative small checks or big checks that you wrote along the way. So what we wanted to do was create sort of a complimentary side of, of the business, where we could invest in commercial real estate and get a consistent to compliment the lumpy cash flows of the, of the residential business. And so we started small because we actually didn’t have any commercial real estate at that point.

Jeff Hull (12m 0s):

So we bought some small retail buildings, a small office building, and as we got more confidence and as our network grew and we’ve understood commercial real estate better, we started to take on larger projects, more complicated projects, more sort of adaptive reuse, work, Roundup up development projects, where we could add more value. So it was kind of like looking back over the last 10 or 12 years, it seems like it sort of went very quick transitioned very quickly, but actually it was a very incremental, methodical approach to entering a new strategy where sort of, we got a few assets sort of learned along the way, built our network while slowly developing this, this new strategy.

Jeff Hull (12m 48s):

So one thing that we brought to this new strategy from our residential development background was, Hey, like we love cities. We love design told you about that already, but we, through our capital structure have very long-term investment horizons. And so we could start to look out and say, okay, we like that office building today. Or we liked that site for an office building today, but what could it be five years from now 10 years from now, 15 years from now, could it be a larger scale residential development? And as you look across the world, I mean, the history of cities are that the intensify over time.

Jeff Hull (13m 32s):

So we sort of like melded sort of the ideas of the residential developer with commercial real estate investor developer, and, and sort of mapped out different sort of timeframes of our strategy when we were assessing. So it was like all incremental sort of mixed up together with our residential development background and with a longterm investment focus allowed us to do things I think differently than, than maybe some of our competitors could at that time. And maybe there’s more people sort of thinking the same way today, but that’s sort of how we transition. I don’t know if I answered that question perfectly Jesse, but

Jesse Fragale (14m 12s):

It does it’s I didn’t realize at the time that it was fairly recent that you got into commercial. And what I’m curious about is with the retail properties, that it sounds like you initially purchase what were those development deals or were those initially just investments in existing buildings with, as you said, that kind of look towards five years, 10 years down the line.

Jeff Hull (14m 33s):

So the first one we bought, like did not tick really any of those boxes. So we bought a strata title, retail building in the beach. And maybe in talking about that project sort of speaks to our overall strategy and in a weird sort of inverse way, but it was an opportunity that was brought to us by a close relationship and over subsequent to buying it over the next couple of years, we realized pretty soon that a lot of our other projects have a lot more favorable long-term investment prospects than this one because of a strata title, meaning like it was the ground floor, the base of the condo, there was no long-term development potential.

Jesse Fragale (15m 21s):

You were just talking about in a roundabout way that was kind of similar to your, to hallmark your modus operandi, but where did you leave off there? It was

Jeff Hull (15m 29s):

Title strata. Title is like ground floor under the base of the condo. There was no long-term redevelopment potential. The population growth metrics in the beach were not favorable to sort of higher retail rent growth. And plus I think there’s an oversupply of retail in the beach period. So pretty S as we sort of develop the rest of the strategy, we’re not buyers are, we’re not sellers often. Like we want to build a portfolio to hold for the longterm, but we, we quickly, as we developed our strategy further, we looked at this asset, the first one that we bought and said pay like maybe this doesn’t have the right characteristics for us to hold long term, because the only way that we could anticipate seeing the value of that asset grow is through higher retail rents or lower comp rates.

Jeff Hull (16m 23s):

And it was just really challenging to foresee that happening in nine area without asset. So, but generally speaking, what we, what we look for are sort of retail and office buildings that have the, the reasonable prospects for future redevelopment potential or future intensification over the long-term. Unless of course they’re just really incredible core assets that we can hold and generate income from over the long-term, we’re able to get access to whether it’s through partnerships or through off market transactions. Generally speaking, if you look at our portfolio, even if we’re looking 20 years out, we hope that there is some intensification potential on, on most of our assets.

Jesse Fragale (17m 12s):

So I think it sounds like you were a bit of a pioneer in terms of actually using that strategy where you’re looking for in place income, your value add, and then potentially changing it, say from a retail use to a residential use. Cause I know just from the brokerage perspective, there’s a number of developers and owners. Now that will say, look in those periphery markets for that same type of structure. I wanted to circle back a little bit in terms of what you were talking about, about design, because we often hear developers and owners talk about real estate, talk about acquisition financing structures, but we don’t hear developers. At least I don’t hear talking about as much. And it’s, it’s a critical part clearly in, in real estate.

Jesse Fragale (17m 53s):

So maybe you could talk a little bit about just your view on that.

Jeff Hull (17m 57s):

Sure. So I think we have a little bit of a different perspective on design because in one part of our business, we’re building assets own for the long-term. Okay. Like for better, for worse. We, we invest in a lot of condo projects. We love our partners. We have a few of them. I think they do fantastic work, but when you’re selling the project at the end of the construction process, there’s not as much incentive to invest in design as, as if you are owning the project for the longterm. So maybe I could use a project of ours as a, as a specific example of what we think about when we think about investing in design.

Jeff Hull (18m 44s):

So we have an office building in Liberty village that was recently completed, which is the first heavy timber office building to be built in Toronto in generations. The projects called 80 Atlantic is the address. So if you want to Google it, 80 Atlantic Avenue and Liberty village. So this is a phase two of a two phase project. The first phase 60 Atlantic wasn’t adaptive reuse of a heritage building. And 80 Atlantic is built on the parking lot just to the North. So the area of Liberty village is employment designated. And so the only thing we could build there today is an office building. And over the course of building a 60 Atlantic, the, the area had changed pretty dramatically.

Jeff Hull (19m 29s):

We thought that that parking lot was going to be a longterm hold as is, and sort of waiting for sort of the next cycle of the cycle after the next cycle, but office development. Pretty soon, it became a potential there where we didn’t think it was going to be a potential before, but we, we in developing an office building, we will be competing against new office buildings and King spine and the South core and the downtown East, all of which had I think, better transit connectivity than we do or did in Liberty village. And so the only way that we could compete for tenants would be based on price.

Jeff Hull (20m 9s):

And we didn’t want to be like a lowest cost type of project commodity type project where that’s the only way we wouldn’t deal with. So we had an idea of coming up with, but unique project from a design perspective and trying to market ourselves as a premium product. So we weren’t competing just based on price and over the last three years, as we’ve sort of built the building and out, I think we’ve proven out the thesis that if you have a great idea for a project, if you invest in design something unique that there really isn’t a natural competitor in the, you can, you can actually outperform.

Jeff Hull (20m 50s):

And what we found is that we got great tenants and who were willing to pay above market rent at the time, really in order to help themselves brand their own business by being in a space that was unique in the market. So I think that project sort of a calculus encapsulates our reasons for investing in, in design, in the first place to get those tenants at higher reds. But I also think that when you’re owning these projects, long-term that when it comes to sort of the first 10 year renewal or 15 year renewal will be more likely to either renew that tenant or find a replacement tenant quicker at a higher rent than our competition, because we have a best in class asset in that neighborhood.

Jeff Hull (21m 37s):

So by investing in design, initially when you have a long-term view, we think that you can see not only better financial performance in the short term, but better financial performance in the long-term and that’s just like aesthetic design. I think we also look at investing in the more sort of nuts and bolts design projects where we’re seeing a better performing buildings that will help us save money on operating costs and CapEx. So I think design a lot of people think about design as just sort of the aesthetic pleasing part of a project, but the design that can also be investing in sort of the things that you don’t see in a project that, that can pay you back over time.

Jeff Hull (22m 19s):

So our, our philosophy on design is that if you invest in it the right way, that it can provide both immediate and long-term financial benefit to the project.

Jesse Fragale (22m 32s):

So that, that pro project that was quadrangle that was, was kind of lending a hand for the design of that, that building. Is that right? Yes. Yes. And just, just on this point, because it’s come up time and time again, where we hear timber construction coming back and offices being designed in timber construction. Can you talk a little bit about that timber construction in general and what the rationale was for constructing buildings with it?

Jeff Hull (22m 57s):

Sure. So the timber construction that we’re talking about Atlantic is not like a two by four construction that you would see and a single family home or a townhouse project. This is an engineer columns and beams using the technology called blue land. So like glue laminated pieces of timber put together that have the same structural qualities or similar structural qualities to steel and concrete. So I, at the time that we were envisioning this, this sort of second phase 80 Atlantic project, the, the province of Ontario came out with a building code change that allowed new wood structures to be built taller.

Jeff Hull (23m 42s):

And so that was part, the impetus of going ahead with, with a new heavy timber project, but really you’re going to see more of it around and in the U S as well, but very sort of lost my train of thought there, Jesse might have to, but, but I think the, the technology has been developed over the last number of years and in Europe, and I guess more recently than the U S and Canada, but we think that the, the technology performs as, as well as concrete or steel, there’s a significant narrative around and body carbon and sustainability of, of using this type of building technology as opposed to concrete or steel.

Jesse Fragale (24m 30s):

All right, Jeff, I just want to take a step back here and just talk a little bit as we, as we wrap up here, I know we’ve got about 10 or 15 minutes left. I want to talk a little bit about the current environment we’re in by the time this airs we’ll be in 2021 fingers crossed that that is a different year, but how has COVID impacted the business in general? And maybe from that, we’ll talk about some specific asset classes. Okay.

Jeff Hull (24m 55s):

Sure. I mean, I mean, it’s hard to overstate the impact that’s had on the business. Most, most businesses I think have been impacted some much more than others and real estate is one of those industries that I think have been impacted more so than the rest as a, as a developer. It certainly impacted our construction in the spring. Residential construction was allowed to continue, but commercial construction, I had to be stopped and we were just finishing our 80 Atlantic project. So we were impacted by, by that delay, but it’s also contributed to significant cost and schedule factors on residential development projects as well.

Jeff Hull (25m 41s):

And probably more so on the commercial real estate side, as a landlord, we’ve had to manage through a very challenging time for our tenants, particularly small, small business tenants in retail, restaurants, bars, fitness, now, small retailers. It’s been an incredibly challenging time. It’s hard like devastating for, for those small businesses. And, and as a, as a landlord, I mean, we’ve done everything I think we can to try to, to help them through with the goal of seeing them all be successful on the other side. But it’s really hard. It’s, it’s hard to overstate the impact that it’s had. I mean, even on the people that we work with, their mental health, but it’s anyways, I think we’re all, we’re all experiencing the same thing together at the same time, but from a, from a human perspective, the most challenging thing for me has been seeing these small businesses that have put everything on the, to chase a dream and start a business and see it being taken away from them.

Jeff Hull (26m 49s):

Not because of bad business decisions that they’ve made, but based on government policy to help prevent the spread of a, of a virus. So that’s been, I think the most personally challenging thing. And, and I think we’ve really taken a position with our tenants to be there for them as partners. And it’s, it’s the right thing for us to do. I think it’s also the right thing from a financial perspective. We can get into that if you want, but trying to backfill small retail, trying to backfill small retail tenant spaces during, during COVID, which isn’t and was always going to be a challenge.

Jeff Hull (27m 30s):

And so I think the better thing to do both from a human perspective and also from a financial perspective is to try to keep the tenants that we have in business and successful on the other side. So anyways, it’s been really challenging, but you’re like no other for sure. Yeah.

Jesse Fragale (27m 44s):

And for a lot of listeners that are in kind of the multi residential space, I don’t think it’s as from a real estate point of view, it’s as a parent, because a lot of the government assistance has really helped out those rentals, just coming, having rent coming in at, I think a 90, 95% from the retail and office perspective, that just hasn’t been the case. So, and moving from retail to office, just a more of a macro level. When we talk about office you’ve, we’ve heard it for the last six months a year. This idea of the office is dead with the CBD office, for sure. What’s your view on the future of office. And do you think this is, was the beginning of a long-term trend or that this has a bit of a blip?

Jeff Hull (28m 29s):

Well, I’m not the most objective person here as an office landlord, but my personal opinion is this is going to be a blip, a big blip, but I don’t think the office is dead. I think the first number of months in the spring, early summer, there was a lot more discussion amongst tenants and in the media about work from home as a, as a sort of long-term model for their business. And I think as time goes on, at least anecdotally, for me, I’m hearing less and less of that as people and businesses run into sort of real challenges with keeping their business operating, keeping their employees engaged, managing onboarding when you new employees and keeping their culture alive and strong.

Jeff Hull (29m 20s):

So I think it’s a blip for the office. I think when people are allowed to and are comfortable coming back, we’ll see more, we’ll see more people coming back to the office then than maybe you would think by reading only the, the newspapers every day. But that being said, I mean, there is going to be a new paradigm where employees are going to have more flexibility in terms of how often they can work outside the office. Most people I talk to, it’s kind of like, whereas before maybe it was one day a week, they could work remotely or one, one day, every two weeks. Now it might be two days a week that they could work remotely three days a week in the office.

Jeff Hull (30m 2s):

I’m not sure that that allows a tenant to take a lot less space. You get into hot desk desking. And there were issues with like densification and hot desking, pre pre COVID, and some pushback on that from, from tenants and employees. So I’m not sure that there’s a way for tenants to give up a lot of the office space they had in the past. And then there’s the counter-argument of the densification. And do we need to take more space for the same number of employees to keep distancing in place? But I think those things will probably even themselves out over time. I think the bigger impact felt over the next couple of years will just be the, the severe recession that we’ll be in.

Jeff Hull (30m 46s):

And any severe recession always comes with availed businesses and, and businesses, shedding staff, and taking less space as a result, not because of work from home, but just because of different business prospects and needing to cut expenses. So that’s what I felt from the very beginning that the, the good thing about a good thing, a bad thing about humans, humans tend to have goldfish brains that they forget very quickly and go back to, to how they, how we naturally interact with each other. And, and so I think as people get comfortable, as the vaccines get rolled out spring summer, 2021, we’ll see a bigger migration back to the office.

Jeff Hull (31m 30s):

And I expect because I have students in our business, we’ve been working from the office will be closed her office. And then a few of us were working in the office and then it was voluntary over the summer and early fall. And that we had some two days a week mandatory, and then we’re back to voluntary. But the experience that we’ve had as a, as an organization working in the office has been that our productivity is significantly higher and our staff are, are happier, particularly young people who want to live downtown for all sorts of reasons, but generally can only afford smaller spaces. They, they want it to be in the office, have a change of scenery, being able to be able to interact in person with other colleagues who they play like spending time with.

Jeff Hull (32m 15s):

And ultimately, I think it’s those, those younger employees who will make the decision for the employers. I think a lot of the space decisions over the last number of years and will continue to be over the next couple of years is, is based on how to attract the right talent to the organization.

Jesse Fragale (32m 31s):

I think the, the goldfish, just that analogy it’s so true, especially when we’re in it. We can’t imagine ourselves being in a different situation and I’ve it through companies, just decisions over the last few months in, in a cautious, we don’t want to make a decision right now, that’s going to impact a five, 10, 15 year business cycle. There’s also a, I think it was earlier this week, call him Lynch. Who’s a head of a global real estate for TD asset management was talking about kind of what you were saying before of your confidence in the city. And it was talking about world war II and the physical destruction to cities and how we just, as a species seem to always get back to building cities. And for those, I think I mentioned on the podcast before, but there’s a really good book called triumph of the city.

Jesse Fragale (33m 13s):

I think it’s Edward Glazer. And it just, I constantly hear kind of little bits of that come out and some of the discussion where we’re having here. So Jeff, before we wrap up here, in terms of now putting kind of your investment real estate cap on outlook for opportunities in 2021 and beyond what’s, what’s your outlook right now? Where do you think, where do you think those opportunities are going to be?

Jeff Hull (33m 38s):

So I I’ve mentioned a couple of times during the podcast, Jesse, that we have a long-term investment Verizon. So I think we can make investment decisions, hopefully during cycles like we’re in right now and see the benefits for two, three, five years out. So we’ve been active already through COVID. We picked up two multi residential development sites at, we thought at what we thought were significant discounts to pre COVID pricing. We’ve picked up the some assembly pieces beside properties that we own that will benefit us longterm if, and when we look to intensify the sites and we’ve been really active on the private debt space as lenders, traditional lenders have backed away from particularly land financing.

Jeff Hull (34m 29s):

So we’ve been active, I think 20, 21, I think we’ll see potentially even more activity as there’s less of a gap, maybe between the ask from owners of real estate and the bid from buyers of real estate. Now, like if you could tell me whether prices are going to come down or for buyers will be willing to pay the prices that the sellers want today, I’m not sure like how that’s gonna play out. But I think, you know, just as a general sense, what my, my feeling is that really great real estate will, we’ve seen it already through the last nine months has performed better.

Jeff Hull (35m 12s):

We’ll continue to perform better. And you’ll see a greater sort of spread between that really great real estate, whether it’s location, whether it’s the building itself or design and the stuff that isn’t as great, not as good of a location, not as good of a building, you’ll see a greater spread between the price and between the two than you did, maybe pre COVID. And so we’re really focused on looking at buying the best real estate we can, where we might not even have about have had an opportunity to buy that in years past, just because real estate values were going to go up forever and Toronto, which doesn’t really offer a lot of incentive for owners to sell.

Jeff Hull (35m 54s):

And this is kind of, sort of shaken up that I’m thinking maybe a bit, but the best real estate that we can buy at reasonable prices that we can hold for the next one year, two year, three years to get to the other side of this recession. And like I said, at the beginning of the podcast are closer to being in the podcast. I don’t see any reason for us to shift our investment strategy. We’re big believers in the city of Toronto. I think not withstanding the, the, the circumstances that we’re in today. There’s all the reasons still in the world’s bet on, on Toronto and maybe more than the pre COVID reasons to bet on Toronto. So we’re, we’re looking at 2021 as a, as a real opportunity to grow our business by great real estate and set ourselves up for the next sort of five to 10 year cycle in Toronto.

Jesse Fragale (36m 45s):

All right, Jeff, there’s four questions. I ask every guest. So if you’re ready, I’m going to shoot them at you, something that now that you wish you knew at the beginning of your career,

Jeff Hull (36m 59s):

Something that I wish I knew now that I do it at the beach,

Jesse Fragale (37m 2s):

You didn’t know at the beginning of your career, I feel like in development, there’s a lot of it. There’s a lot of learning experiences that you wish you knew about.

Jeff Hull (37m 11s):

Yeah. Kind of how do I choose just one? I think there’s a few things that maybe I would share with the listeners and not necessarily like, I didn’t know, maybe I didn’t appreciate as much as I, as I do today. I think reputation is one thing that’s incredibly valuable and it, and relationships and the, the two go hand in hand that I think it’s hard to, it’s hard to put like a monetary value on reputation and relationships, except that so many of the, the, the biggest sort of successes hallmark have been based on the fact that we’ve been able to be involved with amazing partners over the years, and that doesn’t happen if you don’t sort of build and maintain a great reputation in the business.

Jeff Hull (38m 1s):

And one, one short-sighted decision could really significantly impact my reputation. And I think more so than anything, it’s a small world and in real estate, and you want to do everything you can to, to build up that reputation and, and, and build those relationships because they will come back to benefit you as you grow your business.

Jesse Fragale (38m 24s):

And number two, I’d like to ask all guests a little bit about their view on mentorship and maybe for people that are, whether it’s breaking into the industry as an investor in brokerage and development, just kind of generally your view mentorship and

2 (38m 36s):

Part it’s played in your career.

Jeff Hull (38m 39s):

I have back to the partnership side of things. I’ve been incredibly fortunate to be partners with some of the best real estate minds and the city. So we try no more recently, great golf partners on the institutional side with Bentall green Oak and on the private side with a company called York heritage properties. Who’ve been developing and managing buildings for almost as long as I’ve been alive. So, and for me, each one, I’ve been able to learn a lot that I’ve been able to apply to our business.

Jeff Hull (39m 20s):

And I still, like, I think my philosophy is that you, you want to continue learning throughout your career. I, I never feel like I’m in a place where I know enough. I want to continue to learn and ask questions and be humble from people who have been through cycles before. For example, who have developed projects that were starting to get involved in, who have had experience in different asset classes. I think there’s always a room for mentorship, no matter how old you are. And you always see it as like someone who’s established mentoring as someone who’s young getting into the business. But I think there’s a role for mentorship at each stage of your career.

Jeff Hull (40m 3s):

And then because of that reason, I think that we, we try to do as much as an organization to mentor the next generation of real estate talent. And one of the most rewarding things for me, and this is maybe a little bit counter-intuitive, but when you see now, after running this business for, for 12 years, see people come into hallmark, contribute to the growth of hallmark, learn, build their experience, credentials, build their career, and then are able to, to, to move on and sort of reach their career goals somewhere else. So like counterintuitive, cause you hate to lose people that are, that are good, but also incredibly rewarding because we’ve been able to sort of mention them and build up their career and offer them the opportunity to reach their own career goals.

Jeff Hull (40m 52s):

So that’s like within hallmark, but also we try to do as much as we can outside of your organization to mentor young people because ultimately we’ll benefit as an organization.

2 (41m 4s):

They always do. Ladies and gentlemen, my guest today has been Jeff Hall. Jeff, thanks for joining working capital favor. Listening to the working capital podcast. My goal is to help individuals break into real estate investing as well as educate experience investors. If you enjoyed the show, please share with a friend subscribe and give us a rating on iTunes. It really helps us. If you have any questions, want to learn more or likely to cover a specific topic on the show.