On this episode of REALtalk, Michael Turner, President of Oxford Properties Group, joins REALPAC CEO Michael Brooks to talk about leading a global organization, corporate culture and management style, and COVID acceleration and reversal.
The episode covers:
- Stepping into the President’s role at Oxford
- Leadership, culture and management changes prior to COVID
- How COVID impacted change at Oxford
- Michael’s evolution as a leader
- Technology as a differentiator at Oxford: objectives and measuring success
- COVID acceleration and COVID reversal
- How prudent investors should approach various asset classes
- Investment focus and overall vision for Oxford moving forward
About Michael Turner:
Michael Turner is President of Oxford Properties, a leading real estate investor, developer and manager, and Global Head of Real Estate for the OMERS pension plan. Michael is Chair of Oxford’s Executive and Investment Committees and is responsible for the overall leadership and strategic direction of the global team and $60 billion, 100 million square foot business.
Oxford creates financial and social value by building communities and connecting people to exceptional places with best-in-class investment and operating platforms that span real estate asset classes and the entire capital structure. The Oxford banner operates in nine countries across four continents, and the company’s subsidiary platforms including IDI Logistics in the US and Get Living in the UK further extend Oxford’s reach.
Michael joined Oxford in 2010 to lead the investment team. He subsequently took on leadership of the Canadian office and retail businesses and following that led the entire Canadian business before being appointed to his current role leading the global business. Before joining Oxford, Michael spent 12 years at a leading global real estate investment service provider. Michael has lived and worked in Canada, the US and the UK, and has led teams, completed transactions and built businesses across four continents.
Michael Brooks (REALPAC): Hello, everyone, thanks for listening and welcome to REALtalk, the show that brings you unique insights from leaders in Canadian and international commercial real estate. I’m Michael Brooks, CEO of REALPAC. I’m pleased to be joined by Michael Turner, who is the president of Oxford Properties Group, the captive real estate entity of the Ontario Municipal Employees Retirement System (OMERS). Michael is ex of a global brokerage, CBRE, where he worked on some of the biggest deals in Canada during a 12 year career. He has a B.A. from UBC, a Master’s of Urban Planning from Queens, and a Master of Finance from Rotman. He’s a CFA: well educated Michael! OMERS has a 60 billion dollar global portfolio of real estate assets under management. He’s managing 2200 people operating out of around 70 offices (from 2020 data, though I’m sure this changes from time to time). Oxford had quite a run in 2020, with it being named to Fast Company’s world’s most innovative companies, named IPE RE’s Investor of the Year had four of its resort hotels named to Travel and Leisure’s Top 10 list, as well as a lot of milestone developments from London to Sydney. Real estate is cool at Oxford. It’s the #OxfordWay. Welcome, Michael.
Michael Turner (Oxford Properties): Well done and thank you. And you’re very generous both with your characterization of me (I think you’re too generous) and of Oxford. And if this podcast doesn’t work out for us, I’m sure there’s an opportunity with our marketing and communications team with a lead in like that. Thank you for having me.
Michael Brooks (REALPAC): Ok, I’ll dust off my CV. Let’s let’s get to the questions. So you’re over two years into the president role at Oxford and boom, the pandemic hits. What changes were you implementing internally at Oxford to its culture and management style? And why and how did the pandemic affect those changes?
Michael Turner (Oxford Properties): Yeah, thank you for the question. I want to start by saying I had a lot of great tools in the toolbox to work with. Oxford is now a 60 year old business. And I think it has and had at the time a terrific culture. So having said that, every new leader puts their own stamp on things. And Blake, as CEO of Oxford, you know, Michael, he had a very successful C-suite that were his running mates for the better part of a decade. So one of the most important things that I had to do was manage a generational succession of the entire C suite of Oxford. And that took me a little over two years to do, took about two and a half years. So I was quite down that journey. And as the leader putting in place that succession and setting up the business for its next decade of success is probably one of the most important jobs and contributions I had to make. And I wanted to make sure that we reflected a diverse set of backgrounds that is more reflective of society and that our leadership team also reflected the global footprint that Oxford had become over a decade period, that it wasn’t originally. But it clearly, by the time I had the opportunity to lead the business had become a global business. And I wanted its leadership team to reflect that as well. So that is a major change that we were underway. I think culturally, we’ve always had a winning culture focused on stewardship and service excellence. So do not disturb those things. And I did want to add a little more emphasis around the areas of agility, flexibility and scalability because the business is just different. It was no longer the Baker building that started in Edmonton. It’s, as you described, a big global business in a fast changing world. And so I wanted to bring a little more emphasis to that as part of our culture and our our journey.
Michael Brooks (REALPAC): So much of your career, you’re still a young man. You’ve been led, but now you have to be a leader and now you have this pandemic thrust upon you. How do you think you’ve changed as a leader over the period of time you’ve been running Oxford?
Michael Turner (Oxford Properties): Yeah. So I’m going to give myself a little more credit because I had led divisions of businesses or large components or countries before. I’d never led a global business in each one of those leadership challenges were an opportunity to learn and to improve my own self awareness and make mistakes and get better. So when I originally came to Oxford, I ran the investment function and loved being surrounded by Type A personalities that would work until obscene hours in the night and all weekend and a few years into my career at Oxford, I was asked to take a large operations role and I did that for many years and it included the better part of two thousand employees. And that was my first opportunity at scale of understanding that I was not the subject matter expert. And in fact my own success was entirely dependent upon others and had nothing to do with my own abilities in any one domain. That’s just to say, Michael, I’ve had some practice and had some opportunities for experience of leading people and leading different types of groups at scale for for many years of my career. And this was different.
Michael Turner (Oxford Properties): So the pandemic didn’t happen immediately. It happened after I was a few years into leadership succession, changing some reporting lines, critically enabling technology to allow us to operate remotely like this. And I was also accustomed with a distributed leadership team myself to be able to work with a group that wasn’t always in the same place at the same time. That’s just to say, I think I was lucky when this pandemic came and had a pretty good starter set. Thinking about your question, I’m not really sure I can answer it specifically around how the last short period has changed me as a as a person. I have changed in the last decade as compared to when I came to Oxford. When I came to Oxford, I had no kids. Today, I have three kids. We all experience our own growth. And that started from a Toronto employer, went to a Toronto based employer with a Toronto mandate. And now I have a global mandate and have been around that journey of Oxford’s global expansion for many years. So that’s contributed to my my own perspective as a leader. And I’ve had lots of crises in operations and in other areas along the way. You are right: this was the first time I’ve ever experienced a global crisis everywhere we operate all at the same time. So I think the breadth and scale and just the magnitude of unknown and pressures was it was a very difficult period for all of my team. And I think grit and innovation got us through to where we are today. And I shared with my leaders we we have a much better leadership team now because they’ve gone through a once in a generation crisis and they have tools in the toolbox that I don’t think they ever thought they would develop. So I’m not sure if I really answered your question. I’ve sort of given you a bit of a journey there in my own experience.
Michael Brooks (REALPAC): No, it has. I mean, it’s a journey for everyone. I think in those in your position and the fact that you’re open to learning and continuous learning to me is terrific. The technology piece is interesting. You mentioned that that early focus on technology you think helped Oxford be better positioned going into this this pandemic. Why did you think to focus on that as a key Oxford objective from day one? How will you measure success for that going forward?
Michael Turner (Oxford Properties): Right. So one of the things I share with my team just to try and simplify things and I don’t know how to fill in the blanks, so I put out the ideas, I call it go to 4.0. And I’ve always had an interest in technology, Michael, from the perspective of I’m interested in change and I’m interested in innovation. I’m not particularly interested in gadgets and technology as an engineer may be passionate about it. I’m passionate about it in terms of how how you can make life better or how you can reorganize things to have a step, change innovation and outcome. And I’ve always thought that every day you and I go to bed, there are literally now thousands of people around the world waking up and trying to figure out how do they disrupt us. So we better understand that and embrace that, because if we don’t, we’re going to be surprised by technology’s impact on us and it’s unlikely to be a pleasant surprise.
Michael Turner (Oxford Properties): So that’s how I’ve approached the embrace of technology from a mindset as opposed to gadgets for their own sake. And I’ve thought about it for Oxford in two ways. First is technology’s impact on the forces that are tailwinds or headwinds to real estate. So Airbnb competes with hotels that we own. We should understand that. What does that mean? Or Amazon is a huge tailwind to our warehouse business. We should have a view on that. Should we express a view with more capital in one thing over another? So I think about technology and its impact on real estate. The other way I’ve thought about technology is how we can be a better company and how we invest, develop and manage by embracing technology.
Michael Turner (Oxford Properties): And we’ve done that. I could give some specific examples like we you know, we have rolled out and use View the Space as our primary revenue tool, which is more newer to Canada, but quite well developed and embraced in cities like New York. And will, I think, in my opinion, be the leading revenue management tool around the world, things like pro core we have on board for construction management. These tools are highly scalable for us. They’re repeatable in almost every jurisdiction with some changes and they require an enormous amount of change management and skills to be able to enable them. Otherwise, they just become another gadget and they don’t transform your company. So the purpose, Michael, to engage technology is just how do we build a better business and how do we add more value to our customers and how do we be more thoughtful and how we invest, manage and develop.
Michael Brooks (REALPAC): To me, those themes tuck under a resilience and adaptability and future oriented, which are terrific. You and I had a discussion on our pre call about looking at property markets, at the strategy level those. In the COVID acceleration trade and those in the COVID reversal trade, which I thought were very interesting turns of phrase, which asset classes are which in your mind and how should prudent real estate investors be playing one of those two markets?
Michael Turner (Oxford Properties): Right. So I’ll just start sort of foundationally, you know, when I used to acquire assets and as an investor in terms of an acquisitions person or operating things, I thought about the world from a very asset and building centric paradigm. And it’s no longer I can’t do that anymore because that’s not scalable. We have four hundred assets, 100 million square feet, and there’s all kinds of particular noises in there. And I try to pick up what’s the signal versus the noise. So we’ve evolved how we think about and characterize our portfolio so that we are more thematic investor. And what I was referring to you, Michael, is I said there’s two trades right now. There’s the COVID acceleration trade in the COVID reversal trade. In the COVID acceleration trade were things that we had identified that candidly we were short on. We thought we had time to express a longer view and make some more money in warehousing and the impact of e-commerce on warehousing. As an example, digital adoption and the impact that that has as a tailwind at data centers, the convergence of technology and aging society and health care, and how that’s a tailwind to life sciences. So these were all things we were expressing a view on because they thought that they would. Our view was they will grow faster than on average the other parts of the real estate sector. And we should express a view there. All of those trends accelerated under COVID. You’ll see that in our results and our competitors and peers results. You’ll see it in the MSCI data. You see it in the public markets. It’s very clear that this pandemic, while it’s global, its impact is not being felt evenly. To some folks it’s being a huge enabler and to others it’s being a big disabler. So that’s what I call the COVID acceleration trade. Later, there will be opportunities in the COVID reversal trade. Right now I’m in the office. You’re at home. There’s not very many employees here with me on the floor. That’s not going to be the case forever. People will come back to offices. That’s my view. That’s not because we own them. That’s just because I believe that fundamentally we’re going to travel again. We own a bunch of hotels. We will own more hotels. And that enablement of being able to travel and go somewhere on a business trip or with your family is going to be a contributor to COVID reversal trade in hotels. Household formation has slowed a little bit. We see it in single family homes, but in the residential rental side, in cities around the world, we’re seeing fewer people moving into rental apartments. Immigration’s down. Students are living in their parents basement instead of taking that apartment on Bay Street next to you, what that’s all going to reverse. So those are examples of the COVID reversal trade. And each one represents both risks and opportunities.
Michael Turner (Oxford Properties): And we’re just trying to position ourselves to make a great contribution to OMERS and its need to pay pensions over the long term. And we’re playing both of those. But at the moment, we’re still trying to get longer the COVID acceleration trade. And later we’ll go back to the COVID reversal trade.
Michael Brooks (REALPAC): So let’s look ahead. Five years from now, hopefully the COVID reversal trade has been evident at that time and you are still riding the tailwind of the COVID acceleration trade. I hope it’s gone in five years. You know what? What’s your vision for the company look like five years from now? I mean, you’re already a global company already and multiple asset classes. Where do you go from here?
Michael Turner (Oxford Properties): Well, you might have seen recently we had an announcement where we bought a business in Europe called M7. So it’s a Pan European warehouse specialist. They have over 200 employees, a terrific track record as an originator and an asset manager and an investor. Last year, we bought a business in Australia called Investa. It’s sort of the Oxford of Australia in terms of it’s a great office company, developer, asset manager, operator and a fund manager. It has a large fund management business. And we see a real opportunity as the alternative space consolidates, that we have a role to play in that in terms of buying vehicles where our capital can accelerate their growth, where we can use these vehicles to more efficiently deploy OMERS capital than we could just sort of one building at a time. And I think you’re going to see us do more of that. We’ve also aeen the real benefits, Michael, in getting out of people’s way that run these businesses, but sharing best practices and accelerating learnings around the world. And some of the investments that we’re making in technology will be scalable across many of these platforms because we’re trying to solve the same problem at Oxford in terms of how do we lease, how do we onboard a customer, how do we manage a building remotely as they are in Australia with Investa? So why don’t we share ideas and invest in scalable technology to allow each one of these businesses to be, you know, more effective? So I think you’re going to see us build out more of these platforms. There are very efficient vehicle for Oxford to deploy, as you called it, you know, OMERS captive capital. And over the years, we’ve increasingly had large co-investors that we manage on behalf of want more access to the strategies we have. They like our governance, they like our alignment of interests, and we will similarly offer the opportunities for them to put their capital through these vehicles. So I think you’re just going to see more of that from us over the years ahead. And we’re pretty early in that journey. And I think that will be a more mature understanding of Oxford down the road five years from now.
Michael Brooks (REALPAC): Michael, I think that the pensioners of OMERS are fortunate to have you as the President of Oxford Properties Group. You are a terrific leader and we look forward to hearing more from you on your journey as it goes. So thank you, Michael Turner, President of Oxford Properties Group.
Michael Turner (Oxford Properties): Michael, thank you. And your words are so generous and kind. I’m going to invite you to speak to our people any time you’d like. And anything we’re doing, we’re sharing our story. I’m going to ask you to both introduce us and close. Thank you for your leadership at REALPAC. We do appreciate everything that you guys are doing in terms of managing our industry and our stakeholders in the leadership you and your team are showing as well. So thank you.
Michael Brooks (REALPAC): Well, this is Michael Brooks and that’s it for this week’s episode of REALtalk. Be sure to visit us at realpac.ca/realtalk and subscribe wherever you get your favorite podcasts. If you have an idea for a topic or a guest, please send me an email at firstname.lastname@example.org. And if you like what you hear, give us a 5-star rating. Thank you for listening and tune in next time.