All Things Real Estate: Special Guest Episode

Welcome to Canada's Property Management podcast, your number one resource for investing, managing and maximizing the value of your real estate assets. And now here's your hosts, Carla Browne and Adrian Schultz, Canada's rental property experts.

Carla Browne:

Okay, listeners, I've got a very special guest today, someone that I've had the pleasure of knowing for a very long time. And I hope after you've listened to this podcast, you also feel you've gotten to know him a little bit better as well. Mr. Martin Charlwood, and I don't think I ever call you Mr. Do I Martin?

Martin Charlwood:

Not often.

Carla Browne:

So I'll try not to be too formal because our listeners know this podcast is not very formal. We like to have it very conversational, but we do want them to walk away learning something and anyone who has the opportunity to see us on video, in some of the clips you'll see that Martin and I are matching today. So Adrian would be very proud of us, Martin, that because Adrian and I... Oh, and the matching cup too, we often start these podcasts. He's in Winnipeg, I'm in Saskatoon.

We get on camera and for some reason we've matched in what we're wearing. So this was really interesting that all of a sudden you're matching with me. So it was meant to be that you were on the podcast today. So I want to formally introduce you because there is a formal part of this, I guess, and then we'll get into some just more conversation about, so our listeners can get to know you a little better. But I want our listeners to understand who you are and that means I actually had to pull out and write down all of your titles because you have quite a few of them. So most importantly, he is the vice president and CEO of Real Property Management. I say that because this is the property management podcast, but he is also the president and partner of the Childhood Pacific Group, the Vice Chairman and CEO of Century 21 Canada, the Vice Chairman and CEO of Centum Financial Group, the President and COO of Uni Globe Travel International and director partner with Charpak Properties.

I'm going to think you don't put that all on your email signature, right? Because that's quite a mouthful, but you're a very, very busy person. So I really appreciate the time that you're giving us today. And before I get into my first question, I really want to congratulate you because on Tuesday of this week, you were named in an annual report. I call it the Real Estate Bible. I love the Swanepoel report that comes out every year. I absolutely love it as one of the top 200 most powerful and influential leaders in the real estate industry. And I think there was 13 Canadians, if I recall, and you were in the top three. So how proud am I to be able to work alongside you? It's totally inspirational, so thank you for joining us and congratulations on being named in that report. And I don't think that was the first time you were named in that report.

Martin Charlwood:

That report's been running for about a dozen years now, and I've probably been in it about five times. But thank you very much for that. I do appreciate that. And thank you for inviting me to be a guest on your lovely podcast. I'm looking forward to our time together this morning.

Carla Browne:

Yeah. So Martin, let's take our listeners back to really, we've talked a lot over the last year and a bit about Real Property Management, but I want them to understand that Real Property Management came from somewhere else. It just didn't arrive as Real Property Management. It actually started out as a thought somewhere along the years, whereas this organization that you head up had a vision and that vision was to do something that involved property management along the way. But do you want to just go back in time and kind of let our listeners know where this all started and probably age both of us a little bit, but it's okay. Experience-

Martin Charlwood:

Happy to do so, Carla. So what's interesting, if you look back at the history of the organization, century 21 was the first sort of franchise organization that we developed. We brought the rights from the US up into Canada in the mid to late '70s. We expanded the Century 21 brand with my dad, the founder and executive chairman of the organization back then being the CEO of the organization. And for approximately 20 years, all the way up until the early 2000s, we focused exclusively in the real estate space on real estate brokerage and building out the Century 21 franchise. Of course, as we looked to the future, we recognized that a real estate transaction had a number of component parts to it. And so we always had aspirations to add ancillary services or additional offerings to those customers who we were interacting with.

First logical one in that regard obviously seemed to be mortgage because not too many people have all their money saved up before they buy a house and pay cash for it. So in the early 2000s, approximately 2002, we started a new mortgage brokerage franchise called Centum with the idea that if we could help people buy or sell homes, if they needed some financing, maybe we could help broker some financing in that regard. So in the early two thousands, the Charlwood Pacific Group Real Estate Group, if you will, comprised of Century 21, and then we added the Centum component to it.

Of course, about 10 years after that, we started to think, well, there's a lot of people that can't afford to buy a home, and it's quite a fragmented market in the residential rental market across Canada. Wouldn't it be great if we could also get into the property management business because then in a vision, looking forward, if someone was looking to buy or sell a house, we could help them do that. If they needed financing to try and purchase a home, we could do that. And if they needed property management to help them manage an asset, we could also do that. And so the whole idea there was to be able to offer three different services going forward. And that was kind of the birth of the Charlwood Pacific Real Estate Group, which now encompasses Century 21 for Canada, Real Property Management for Canada as well as Centum mortgage brokerage across Canada.

Carla Browne:

Okay. So all three brands moving across Canada. How do you see that now in this present day and age, we're dealing with the doom and gloom of the recession, and I'm not a doom and gloom person. I always think there's opportunity, but where do you see that, how the advantages of where we can really fit into that now?

Martin Charlwood:

Yeah, well I think it's super important. Now obviously markets come and go, they go up and down. Real estate markets expand, they can track. Property management is a very important component of all of that because as house prices increase, it's a little bit more difficult for certain segments of the market to be able to afford housing. But I think one thing that we can recognize is that whether you're in real estate brokerage, property management or mortgage brokerage, competition is stiff these days.

And I think if you're a business owner or an agent in one of those disciplines, one of the things that we do know as that price pressure for the services that we offer is continuing to bear down upon us. And so our view at the Pacific Group of real estate companies is that it's incumbent upon you to make sure that you're offering all the services in the journey of real estate rather than just one. So when you ask strategically, why is it that the Charlwood Pacific Group wanted to get into this, not only do we think there are great business opportunities as it relates to the three disciplines we just talked about, but I also believe that it's important to be able to harvest as much of the revenue opportunities as you possibly can as one of our customers moves through their journey in home ownership.

Carla Browne:

Exactly. And I love that. I love when we talk about the housing journey of Canadians and really you encompass every piece of that. So there's not really a need for someone who comes into working with one of the organizations within the larger organization to ever leave because we can help them right along the way. And that's something that I think is so important and kind of very much a missed opportunity. So I don't know if anyone else in Canada who's poised to do this except for this organization, which makes me incredibly proud. And probably the thing that gets me really motivated every morning because I can see so much opportunity where we can really help people. And from the property management side, I think there was a stat that came out, I think it was from one of the Bank of Canada rates at one in five mortgages in 2022 were actually for second residents or could have been considered investment properties.

So we know that investing in real estate, anyone who's been in real estate, we always talk about it, is something that always appreciates. But I would say in the last 10 years, it's really highlighted where people are like, I'm going to invest some money. It's not just going to be in stocks or it's not going to be put my money in a GIC. They want to invest in something that they can see growing and real estate, the asset can really get them there. So I think we've got it all covered and I think that's pretty exciting.

So the market, okay, let's go back to my doom and gloom. I'd never take us back to doom and gloom, but I am going to, because this is something where the media's constantly talking about it, affordability, inflation, recession. You can't open up a newspaper article or open up a news website without seeing these words. So what do you think 2023 is going to look like? And I'd like you to follow that up with what are things that you think some of these companies could do or these individuals that are in the real estate space could maybe look at doing differently? Or do we just ride it out? What are you seeing for this next year?

Martin Charlwood:

Well, it's interesting, Carla, I think the Canadian commercial media, if you will, absolutely love talking about real estate. It's almost like Canadians are addicted to coffee across the country and seem to be addicted to talking about real estate.

Carla Browne:

Totally.

Martin Charlwood:

One of the things that I can say is that Canada is one of the best markets in the world in which to invest in real estate. We have one of the most geopolitically stable countries in the world. We have a super secure bank and financing industry, and we are the envy of a lot of countries around the world as it relates to the stability of investment in the long term. Of course, over the years, over the decades, we've had booms and bust in real estate cycles. But generally speaking, the graph over the long term goes from the bottom left to the top right, moving generally up.

So people have been rewarded with decent returns over the long term if they have held real estate. We have a relatively stable population. We have a government that is keen on helping enhance immigration across the country. And so to the extent that maybe we're not a market as big as the US where there's 10 times as much of population, we are very focused on bringing immigration into the country. In fact, federal government is focused on, I think there was 450,000 people that immigrated to Canada in the year 2022. By the year 2025, the statistics and their target is half a million people. But the long and the short of it is these underpinnings of sustainable immigration, a very geopolitically stable market across Canada and a stable banking system makes it to be a very desirable place in which to invest in real estate. So we believe that's a really great place to be.

Now as it relates to what's going to happen in the market going forward, my predictions are probably as good as the next pundits and there's a lot of concern about what's happening, mostly factored in by interest rates, as we well know, for the last five years or longer, we've had some of the lowest interest rates in recent memory and those have been ratcheted up. And so that of course is going to provide headwinds in the market for those looking to buy new homes and need to borrow money to do that. On the other hand, as the market softens, some people who previously were thinking about selling, they may consider not to sell. And so they, they'll hold onto the property if they're not forced to sell. But if they are forced to sell because of increased interest rates, there's going to be demand there because people understand and appreciate the value of real estate going forward.

So to me, I think it's always important not to over-leverage yourself. That's always the key at any type of real estate. Don't get your head in above the water line and make sure that whatever debt that you take on with your home is going to be sustainable through ups and down markets. So as it relates to the proactive strategy that we have in the Charlwood Pacific Group, as I said earlier, markets go up and down and we recognize that and whether that's property management, mortgage or real estate, but we think it's important that if you're in the real estate space to make sure that you're working inside an organization that has referral opportunities between all three components of the real estate transaction as we talked about just a few minutes ago.

Carla Browne:

Yeah, I was just going to add that if you didn't, that now is the opportunity when you are in one of these business lines to be looking at how do I make the most of this business line and the way we are positioned, being able to interconnect and build those relationships between the brands like we are right now. There's considerable advantages, and I do see that not only from the consumer perspective, is it a great thing to be part of one of the brands, from an agent, whether you're a real estate agent, a mortgage agent, a mortgage broker, in that property management space, there's huge advantages to now align yourself with a brand that now can offer all these other services and like you said, referral opportunities.

Martin Charlwood:

Absolutely. Well, I think one of the other interesting things to note, Carla, is that over the last decade there has been a huge amount of investment in financial technology as we refer to it as FinTech. Up until that point, there was a lot of inherent structural challenges in the opportunity for property management and mortgage brokerage and real estate brokerage to collaborate. It was very cumbersome to do so. Some of the regulations made it very difficult and some of the referral efforts were very sort of paper intensive and labor intensive.

What's happened in the FinTech world certainly in these last five years is it allows customers dealing with companies that have a strong web platform, not only for their agents, but for the consumer to shop for the services, consumers can opt in and be made aware of other opportunities in these other disciplines simply by checking a box and saying, "Hey, I'd like to be made aware of most recent mortgage opportunities, any property management benefits that might benefit for if I'm looking for someone to manage an investment property that I bought." Or "Hey, I'm thinking about selling my home, can you send someone out and give me an idea of what my home might be worth today if I'm thinking about making a move."

And so these things are super important because the idea is there used to be a lot more pain points in that set of transactions moving across those referral points. And that's all being smoothened out. And we're quite delighted because we believe that the Charlwood Pacific Real Estate Group here is one of the few in Canada, if not the only organization in Canada has all three disciplines. And we're really working towards removing those pain points and making it so that our customer base has the ability to be made aware of the most recent and updated opportunities and to make it as seamlessly and smooth as possible for them to enjoy those opportunities.

Carla Browne:

It's about the customer experience. So bottom line, when you at the top of the organization and then you have all of us underneath working in these different business lines, but ultimately it's what happens at that client experience level that makes the big difference. And so I'm sure that's what we're all looking at. How do we improve that client experience and how do we then bring all of the brands together in order to do that? And you're right, I was part of the world of where we didn't have this technology and everything, it was, cumbersome is probably a great word, and collaboration only really existed if both parties wanted to collaborate and have that relationship and then really start to build it. And then it became, well, why do you want to sell my services? I'm busy selling my own services, or I don't want to sell your services.

And then how do you get them to know all of this? You can do that through technology and really we're giving the consumer what they want. That's really all it's all about. And we're making the job easier for those that are working in these brands to be able to then reap the benefits of being able to get the clients who now already know about us, they know what they want, they have a level of expectation on the service level, and then we're able to provide it. So it's a very, very exciting time. And I think covid set up technology-

Martin Charlwood:

Well, I think, I'm not sure if the listeners have heard this in the past, perhaps. It's on your resume if they come to your website, but you are one of the great individuals within the Charlwood Pacific Real Estate Group who has not only been involved in all three, you've actually been an owner of a Century 21 franchise. You have been an owner of a Centum franchise, and you are currently an owner of a Real Property Manager franchise as well as the national President of Real Property Management across Canada.

And what I've really enjoyed is working with you very much more closely, certainly over these last 18 months as you assumed the mantle of the presidency of Real Property Management Canada for the whole nation in understanding where those opportunities are, kind of recognizing where the pain points are, realizing how can we provide seamless opportunities to our constituents so that it just makes sense and it's easy for them to understand, oh, okay, I'm thinking about buying a house here, but I hadn't really thought about how this piece could fit in there. And that really resolves that issue. And look at that. They've got a referral over here with this company. Well, that allows the whole ecosystem to work more symbiotically together and no one better than you to help us make sure we iron out some of those bumps along the way and make it so that any opportunities that are available can be seized upon by our target market.

Carla Browne:

Yeah. Well, and I think that's important as we make decisions, especially at your level that we're making them, that we understand the impact on the local offices that are our clients essentially, and then that end user as well. So trying to bring that all together. And I definitely think I can bring that perspective. And I do. As you know, I don't hold back in my opinions and usually we get along about it, so it's all good, but you're very open to hearing them and that's appreciated as well.

Okay, so we talked a little bit about where we are today. You talked a little bit about the future. RPM as you know, Real Property Management and the Centum organization have been working very closely in trying to launch what we call kind of phase one of using this FinTech and PropTech, property management technology together in order to increase the experience for the end consumer and increase the experience for our office, our franchise partners as well.

And that is with the investor benefit program that I won't talk a lot about it because we're officially launching it at the end of quarter one. We're just dealing with all of the technology pieces now to get that in line. But it is going to be very unique, right, Martin? Martin you know about it, obviously. That is going to be something that's very unique in our marketplace that we can offer our investors to give them some price breaks. The end consumer's going to get some price breaks, our offices are going to get some advantages and trying to get feed those integration of referrals and gain some extra clients along the way. But in the end, I feel it's going to be an awesome, awesome advantage for the end consumer and our investors.

So I hope that we see phase two, phase three, phase four, and we've got to do them in phases. You can't conquer the world all at once, but it's so inspiring to have you see that vision from years and years ago on how these brands could work together. And for you now to see them coming to life, I get inspired. I can't imagine how that must feel for you.

Martin Charlwood:

Oh yeah. It's been a journey for sure. As I said early in our chat, there have been some inherent obstacles and challenges as it relates to how these industries cross over. And with the investments that have been happening in FinTech and of course the ubiquitousness of how web platforms allow consumers to so much more easily access services that we provide, it just makes so that those opportunities that previously maybe weren't worth harvesting just make mu so much more financial sense. And the whole idea here is time is precious and we can help people save time and of course save some shackles along the way, engaging in the services that we provide. That to us is the holy grail.

Long and short of it is, you asked me right at the very beginning of the podcast, what was the original long-term vision? Well, our idea was we would like to have a real estate group that could help people either buy or sell a piece of property, if they needed some financing to get it done we'd like to help them broker the best finance package for their mortgage. And then lastly, if they were actually looking to buy an investment property, how could we minimize the challenges of actually overseeing a property that you own for investment so that you could maximize the yields? And to us, that ultimately is the best offering in the marketplace. And that is the vision for what we're doing with the Century 21, the Centum mortgage and the Real Property Management offering here going forward for the next millennium.

Carla Browne:

Well, excited to see what happens. So I always like to end podcasts with guests trying to know them a little bit more personally, and I'm kind of springing this one on you, but Martin, if you're not sitting in your office, which normally when I see you, that's where you are, sitting in your office. And I will say it's a beautiful office that you've just now amalgamated all of these browns on one floor in Vancouver, which has been phenomenal. And for those that were able to attend, I guess the grand opening, they saw it firsthand. And for any of our listeners, I guess if you ever are in the Vancouver area, please, please pop in. If Martin is there, he will show you around. I know that for sure. But where else can we find you? What do you like to do in your spare time?

Martin Charlwood:

Well, so I appreciate that question. As I said, we are delighted. We recently moved into new offices. The building is called the Evergreen Building. It's a famous building here in Vancouver. It's an Arthur Erickson design building right on the waterfront. Across the park from the waterfront in Coal Harbor. And what's great is that we used to be in a different building a couple of blocks away, and we had two different floors of offices space, and now we're all on one floor. So the collaboration between the real estate group of companies, that flows a lot better. And I'm quite lucky, you can't quite see it because it's a bit of a rainy day here in Vancouver in mid-January. But we're overlooking a marina right here in Coal Harbor. And one of the things that I like to do when I'm not at the office is I'm a big boater.

If you're in Canada, if you're lucky enough to live in Vancouver, I think you're missing half the fun if you're not having the opportunity to be out on the water. So I'm an avid boater and I love to go up the BC coast and out to the Gulf Islands. I very, very much enjoy that. Carla, we didn't really mention it earlier, but we have a separate company that's also part of the Charlwood Pacific Group. It is called Uniglobe Travel. So on the heels of us starting Century 21, back in the late '70s, in the early '80s, we took the knowledge that we created and accumulated in franchising and that we applied to real estate brokerage and we started a global travel agency franchise. And so for many years in the earlier part of my career, I was involved in the travel business and I helped expand that Uniglobe franchise around the world.

And so when I'm not here in Vancouver, I still love to travel and I've been to over 100 countries around the world and I do a lot of that for business, but I also do a lot of that for pleasure. And in fact, one of the more recent exciting trips that I did is we had an event down in Peru and I actually made my way up into Machu Picchu, which is one of the most famous, sort of-

Carla Browne:

That's awesome.

Martin Charlwood:

...lost Inca Cities. That's just really spectacular. So to answer your question, when I am not here at the office or not engaged in the business, I'm either out on my boat or I'm traveling abroad because I absolutely love it. If I haven't been there before, I'm excited to go there.

Carla Browne:

Yeah. Well, I will say one thing about you, Martin, is that you are definitely a very social person, very personable person. You always open people up into your office, into your boat. I personally have had the pleasure of going for a boat ride with others, and that's so appreciated. And I think that just comes that you are so family based. I know how important family is, and I know that all the brands are part of your family as well. And that's something we didn't really touch on today is that this is a family-owned company who always treats everyone like family. And I think that's something that I've always really, really appreciated and have always felt quite honestly, even from my very early years in the Century 21 organization where I was first introduced to all of you. So thank you so much. I think that-

Martin Charlwood:

Well, we appreciate that, Carla. It's interesting, as we know in all of the brands that the Charlwood Pacific Group is involved in, we've got multi-generational family members moving from one generation to the next. In fact, in Century 21, it is the legacy brand. It's the first one that we created. We now have some franchisees that are in their third generation moving on, and that's really, really wonderful. And of course family denotes that. The short of it is that we're with you through thick and thin. We're not good weather friends. We are all weather friends. So when times get tough, and obviously there's some headwinds that are very likely coming down the pike here as it relates to the real estate market, but we've been through these downturns before. What we do know is that in the mid to long term, being in the real estate space has always been a good space to be in.

And we're very excited about the future regardless of what some of the headwinds are that are in front of us. And I'm delighted to be working with a great team that you have put together for property management. I'm excited to be working with Chris Turcotte, his team at Centum as well as with Todd Shyiak and the rest of the group at Century 21 Canada and Brian Rushton in making sure that we provide services and collaborate amongst each other, remembering that one of the key benefits of being part of the Charlwood Pacific Group and being part of one of our franchise networks is that you are in business for yourself, but absolutely not by yourself. And the whole idea here is that we collaborate on best practices in both good times and in challenging times. And the idea is that we collaborate and learn from each other so that when there are challenges, we can learn from the experience of others who have already been through what we're trying to face. And that is absolutely the power of being part of a group like the Charlwood Pacific Group.

Carla Browne:

Totally. The collaboration and the networking that you get from being part of this organization is something that, because I've been part of it my whole professional career, it's really hard for me to compare it to other things, unless you start to talk to other people and then you're like, "Wow, you guys don't have it figured out, you really need to come over here and see what we have going on here." Because that is the power, especially in franchising, right, is that you, I love that you're in business for yourself, but never by yourself. I think that's so important that people get that, is that you join one of the brands, but you have this network behind you. And no matter what stage you're in, there's going to be someone that's willing to put up their hand and help you.

And there's probably not a situation that you're going to come across that they haven't faced either. So the sharing that goes on in different meetings that you hold I know is absolutely phenomenal. So I do want to close us out shortly because I don't want to keep our listeners too long. If people do want to learn more about Martin and the Charlwood Pacific Group, you can go to the website, new website that's just been refreshed, charlwoodpacificgroup.com. All of the brands are listed there, so you can also link out and learn a little bit more about Uniglobe, Century 21, Centum and of course, Real Property Management or, you can always come back to our podcast and learn more about us here as well. So thanks for listening. And Martin and I always end our podcast with one line, so I'm about to say it. So before I say that, I just want to make sure I didn't miss anything that was on your mind that you wanted to share.

Martin Charlwood:

Totally delighted to be part of this podcast today, Carla. We're so proud of what you and the entire team at Real Property Management are doing, and I am looking forward to the Roaring Twenties coming back after this rough start. And I'm not going to mention why we had that rough start in the first couple of years of 2020, but I'm very excited about what's going to be unfolding here for the balance of the decade, and I'm very much looking forward to seeing and helping deliver on some of these great initiatives that we've got going on. So thank you for including me, and I really enjoyed spending time with you and our listeners this morning.

Carla Browne:

Thank you so much for being here. Now, that's Real Property Management.

Thanks for listening to Canada's Property Management podcast. If you like this episode, please subscribe and give us a rating, which will help us reach more listeners. Until next time, connect with us on social media and online at www.realpm.ca.