‘We like to view ourselves as a REIT 2.0’

Neville Joanes, CIO of digital platform Willow, is taking another shot at unlocking a new world of investment for Canadians

‘We like to view ourselves as a REIT 2.0’

In order to explain his decision to join Willow, a digital platform that aims to lower barriers to the commercial real estate investment space, Neville Joanes has to look back to an earlier milestone in his career.

“I helped launch WealthBar in 2013,” Joanes told Wealth Professional. “The problem we were attacking back then was the lack of professional portfolio management and financial advice options for Canadians. Nearly a decade later, digital advice is now a staple and forms part of most major bank channels.”

After acquiring a majority stake in 2019, CI Financial took full ownership of WealthBar in 2020. The platform was rebranded as CI Direct Investing shortly afterward, and Joanes became its president. Fast forward two years, and he’s now taking on a challenge very similar to what he confronted 10 years ago as Willow’s chief investment officer.

“We see a lack of direct real estate investment options for ordinary Canadians,” Joanes says. “With my experience at WealthBar and CI Direct, I’m able to provide some insights and help Willow with its mission to change that.

“Whether they’re DIY, mass-affluent, high-net-worth individuals, or clients that work with financial advisors, we’re here to provide them with more controlled, transparent access to real estate investment,” he says. “We like to view ourselves as a REIT 2.0.”

When weighing different risks and opportunities in real estate, Joanes says investors should consider factors such as cash flow, location, property types, tenants, and supply and demand conditions. As an example, he said that throughout the pandemic, real estate assets tied to the entertainment and hospitality industries were impacted more by tenant risk; because those businesses were largely unable to operate, it raised concerns around their ability to pay rent.

While the average investor might find it hard to do proper due diligence on their own, they don’t have to face the same type of aggravation using the Willow platform.

“On Willow, we have a retail property in Ottawa where the tenant is one of the Big Six banks,” Joanes says. “In selecting that property, we did our due diligence to ensure there was a long-term lease agreement in place. We also found the neighbourhood was developing and improving, and there’s also population growth in the area.”

For many people, investment decisions ultimately come down to their personal preferences. In recognition of that, Joanes says Willow’s team remains agnostic to the type of properties they source and include on the platform, diversifying by location, asset size, and other categorizations. At the same time, they remain selective by curating opportunities based on certain cashflow thresholds, tenancy requirements, and other criteria to show stability of the asset.

“Investors might want to spread their investment across different property types, but the starting capital alone needed for traditional property investment is a huge burden,” he says. “Because we have a tech-based fractional investing model, investors on our platform can maintain a diversified portfolio of different property types. We also take care of ongoing management of the properties and provide regular reporting, which includes a record of monthly profit payments that go into the investor’s account.”

And to provide even more peace of mind to investors, Willow worked extensively with the Ontario Securities Commission to get approval to operate as an exempt market dealer.

“Our goal is to get the best outcome for investors,” Joanes says. “The regulators are there to ensure the integrity of capital markets, they're there to safeguard investors. So it was very important for us to work with them.”