John Ho is CEO and Co-founder of IWS Equity. With more than 30 years of real estate banking and capital markets experience in both Canada and the U.S., he also serves as President and CEO of Institutional Mortgage Capital (IMC). John co-founded IWS Equity in 2019 with Paul Aiello, the firm’s President.
Ken McKinnon is Senior Managing Director of IWS Equity and serves as Senior Managing Director of IMC. He is responsible for managing relationships, capital raising and fund management activities for both IWS and IMC. Ken has more than 20 years of real estate experience.
How do you evaluate an equity investment opportunity?
John: Our team has extensive experience providing capital in both Canada and the United States. As a result, we are sought after as an institutional equity partner and presented with unique opportunities by best-in-class joint-venture partners. Our evaluation of an investment opportunity is first and foremost determined by the trust and confidence we have in our potential co-investment partner’s ability to execute. We have worked with, and provided capital to, each potential partner over many years. That involves substantial due diligence, in all cases.
Ken: We rely on our lending expertise and our thorough understanding of good real estate when evaluating an opportunity. We also track market trends closely, which informs how we identify value-add opportunities and high-quality properties. We measure downside risk more effectively because of this lens and we are cognizant of sector-specific industry norms. We won’t proceed unless we’re comfortable with all aspects of a deal, including how the exposure of the potential investment fits into the applicable fund’s diversification metrics. We follow a rigorous process that includes site visits and implementation of critical investment supervision controls. If even one member of our team disagrees with a deal, we will turn it down.
You’ve described your approach to the real estate sector as “active and unique.” How so?
John: IWS principals have deployed approximately $20 billion of capital in the last 25 years, across Canada and across all real estate asset classes. Our team is astute in evaluating and analyzing Canadian and U.S. real estate, including speciality sectors overlooked by others. We leverage our experience to capitalize on diversified segments of the real estate market that will be strong over the long-term. We have been very successful in sourcing deals within underserved real estate markets for many years. For example, we have been lending in the self-storage sector since 1998 when other lenders overlooked the stability and long-term growth projections of this sector. We still see tremendous value in self-storage, especially from an equity perspective. After contributing between 70% and 85% of the capital required to purchase, develop and optimize seven GTA self-storage properties across 2019 and 2020, we exited these investments in June 2023 for a sale price of $250 million. These investments exceeded our projections, achieving a very strong return for our investors. We obtained this result through active asset management and a thorough command of current market trends in Canadian self-storage. Our team’s years of disciplined lending in Canada help us analyze equity opportunities conservatively, while we optimize value through a deep understanding of market fundamentals.
What does "relationship-driven investing" mean to you?
Ken: It means we only invest alongside partners we maintain a long-term relationship with and with whom we share common strategic objectives. Our partners have demonstrated their ability to manage and, most importantly, deliver on their strategies. They are best-in-class market leaders who take pride in their reputation and that we trust have the capabilities needed to be successful. The depth of these relationships is arguably the most important risk filter guiding our investment strategy. We are excited by the potential opportunities that our pipeline presents.