Tyler Goodwin - Founder & CEO, Seaforth Land

Posted on 30 November 2018 by Tyler Goodwin

Susan Freeman

Hi I am Susan Freeman and a huge welcome to the next in our PropertyShe Podcast Series where we will be hearing from some brilliant property personalities that I think make a massive difference to our sector. 

Today I am absolutely delighted to welcome Tyler Goodwin, founder and CEO of London based property investment company, Seaforth Land.  You can be forgiven for not knowing the name as Tyler only burst on to the London property scene in 2015 when he set up Seaforth Land to invest in central London commercial real estate.  This was after 30 years in global real estate in North America, Asia and Europe.  I have been fortunate to get to know Tyler a little being on the Seaforth advisory board and hopefully you will get to know him during the course of this podcast.

Tyler, you were born in Canada, you spent most of your career in the Far East, latterly in Hong Kong, what brought you to London?

Tyler Goodwin
That's a long story so we've got 30 minutes so I will make it short.  So I was a banker at JP Morgan. As managing director there I had a client based in Mumbai called Lodha Developers and we did a joint venture with them, a residential joint venture.  So I got to know them, that was back in 2006/2007.  Then I represented them in a debt restructure in 2009 post-global financial crisis. I got to know them a little bit better and in 2013 post-GFC and things had gone well with the debt restructuring they wanted to expand their business into the UK and so I advised them on that and eventually they asked me to come here and be their CEO.
Susan Freeman
I was talking to one of the firms of surveyors that you work with and I said 'how would you describe Tyler?' and they thought for a minute, they said 'the archetypal disrupter'.
Tyler Goodwin
Oh my.
Susan Freeman
Does that ring a bell?  Is that how you would describe yourself?
Tyler Goodwin
I am certainly not a conformist, I think you probably agree with that?
Susan Freeman
I agree with that.
Tyler Goodwin
I am not afraid to be different.  I am not afraid to do things differently.  I think that term is used a lot right now.  I think our business is to be contrarian and you know, by being contrarian you are often going against, against the flow so I suppose we are a bit of a disrupter but we are more, I think we are just very independent in our view, in our approach and I think myself personally I am kind of… my wife, Vera, refers to me as the 'banker non banker'.  I've never even you know working at Deutsche and JP Morgan, I don't think I have ever kind of fit that mould, I never wanted to really fit that mould.
Susan Freeman
So having been in London for a few years now, is there anything that has really surprised you about the UK real estate sector as opposed to the experience that you have had to date in the Far East?
Tyler Goodwin
Yeah absolutely.  It's a great question and so when I came here as a CEO of Lodha, we had some great earlier success with the acquisition of 1 Grosvenor Square and 48 Carey Street but things didn't work out with them and so I was in London saying 'okay what am I going to do?'  Am I going to stay, do I go back to Asia where I had spent 20 years and so actually I did a bit of a global road show meeting with my peers, meeting with, you know, the largest institutional investors in Asia and North America and in Canada and some in London just to share what I had learnt and also to kind of… I think a lot of people were surprised that I'd leave JP Morgan and take this role and so to share my experiences and my insights but also to learn more about where peoples' minds were at, institutional investors' minds were at in the London market.  The perception of the London market from the outside is kind of London and New York are neck and neck.  Its London number 1, New York number 2 or vice versa.  If you look at the third most important gateway City for institutional capital, it's a broad debate but it's a distant third and so people tend to paint, paint London, and I think I was guilty of that early in my career, painting, painting London with the same brush that you paint New York.  So… but in fact the level of capitalisation in this market is probably the one significant characteristic that I witnessed first-hand in coming here and getting a few anecdotal examples.  If you look at the top 10 you know reads in… or illicit property companies in London you know, number 7 through 10 might have a cap, a market cap of 2 billion. If you go to New York and you look at the capitalisation of listed public real estate companies, they are in the tens of billions, I mean they are significantly larger. The same applies to open-ended property funds you know, multiples and scale of which there is liquidity in the, in the London, in the New York market versus the London Market.  I think it means that transactions here are done in a very different way. You still have the same level of volume and actually London interestingly has even greater liquidity than New York but, but I think the, the type of capital that invests here is often more of a trading capital and its built on often in our industry, its dominated by people that may have their background in the brokerage industry and then go on to build their own real estate companies and there are a lot of great real estate investors whose DNA you know, follow that route.  In fact you know, I did my first, first four years in CB, Coldwell Banker in Canada and… Coldwell Banker Commercial.  But I think that often it drives strategy and it leads to much more of a trading philosophy which attracts a different form of capital or different type of capital as well.  So I'd say the capitalisation is probably the biggest surprise thing that I had learnt when I had come here but also what defined the opportunity for us.
Susan Freeman
So you weren't tempted by New York?
Tyler Goodwin
No I've worked in New York and I mean, I think New York is fantastic, it's a great City.  London is an extraordinary City and this is home for me.  Given a choice between those two, I think I'd be kidding myself to start up Seaforth Land in New York as a first market.  I'd probably get my arse handed to me to be honest.
Susan Freeman
So it's our gain that you decided to set up Seaforth Land in London and the Seaforth mission is to be central London's best commercial real estate operating partner for institutional clients?
Tyler Goodwin
Yes.
Susan Freeman
Tell me a little bit about how Seaforth go about achieving that?
Tyler Goodwin
So when I did this global road show and meeting with the clients, I spent a lot of time with clients in my career, a lot of the largest in Asia, the largest institutional investors in the world and there are a few characteristics that I believe the sophisticated institutional capital that are investing directly in real estate are looking for.  You know, one of the most critical elements is certainly a focus, a disciplined focus.  I mean we've chosen to be disciplined by asset class, we are focussed exclusively on commercial and we are looking at residential all the time as a, as a longer term opportunity for the business but at the moment we are solely commercially focussed and geographic focussed.  You know, we are focussed exclusively in central London.  That disciplined focus but also being an operating partner so we are not, we are not an investor, we are not a trader, we do those things but our responsibility to the client is to, to provide a service throughout the investment lifecycle and that for us, I think uniquely starts with research.  So we do our own in-house research.  I think it's a significant differentiator but it also, getting back to the point on discipline, what it forces us to do is make investments driven by research, develop strategy driven by research, as opposed to identifying opportunities, creating research to support the investment thesis and then presenting that to the client.  So being transparent with our client is probably the last, you know, most important criteria.  We, we create data rooms.  We do bi-monthly calls with our clients and share all of our information, all of our analysis, all of our pipeline and that's, that's an investment in a relationship.  For the client when something like CAA House comes up, you know they are in a position to, to move quickly, to capitalise on an off market opportunity.  You know, we are right now speaking with a lot of perspective clients but our business is probably a five client business.  For us to be successful, if we've got five programmatic JVs in a separate managed account structure, where these are clients that have strategic allocations to this market rather than tactical, and the difference between a tactical allocation in a, you know, in an institutional context would be, you know, investing in Hong Kong you'd want to invest in Hong Kong at, at only certain points in the cycle.  Whereas because London like New York, has a lot of liquidity and strong volumes but also because of that you've got a strong floor and you've got a reliable user base, tenant base.  You've got the ability to create long-term you know, reliable cash flows and so you know, for the London market we are looking at probably three or four, five clients that can deliver that or that are interested in us delivering that.
Susan Freeman
And they are likely to be international from Asia or from North America?
Tyler Goodwin
Yeah I… and Europe but, but because of my… I mean obviously I am Canadian you know, I think that the DNA at JP Morgan and Deutsche Bank I understand the language of the more institutional investors.  There are a lot of European investors as well that I would rank in the… I mean if you look at the Dutch pension funds like, or even the Australian pension funds, the Canadian pension funds, some of the Sovereign Wealth Funds, those organisations where the real assets allocations are 10% and up, and those are probably the clients who have, have enough interest in direct investing as opposed to indirect through funds.
Susan Freeman
So let's talk about your most recent purchase, one of London's most notable brutalist landmarks, CAA House. I preferred the earlier name actually, Space House.
Tyler Goodwin
Yeah me too.
Susan Freeman
So you bought it quite recently from Almacantar, it's Grade 2 listed, it's in Kingsway, so why did you buy it?  Was it something you had your eye on because of the brutalist architecture and can you tell us a little bit about what you have planned for it?
Tyler Goodwin
Yeah love to.  The… so the seed of that opportunity actually started with our business plan from you know, when we were in 2017 writing our research for 2018 and we wrote something called 'RE Thinking 2018' and rethinking is it's a kind of recurring theme in our research – RE is Real Estate Thinking 2018 and one of the things that we did a detailed analysis on is net stock absorption which we, you might recall, we got into a bit of hot water because some people in the market didn't like us shining a spotlight on it, stock absorption but in 2017 you had about 3 million square feet in negative net stock absorption and we reported on that and we reported on you know the fact that the cost of Brexit made it incrementally quite a bit higher than that, it was 6.2 million total cost to Brexit last year or up to the end of 2017.  But one of the things that we, we identified is we did a submarket analysis on that stock absorption and Midtown in 2017 actually had positive net stock absorption so whereas the broader market was declining in values, the midtown market vacancy rate actually declined by 1.1% and rents were firming up and with a vacancy rated close to 3.3% depending on who you'd listen to and a lack of future supply coming in in 2019 and 2020, new stock is supposed to be close to zero.  That means you are approaching frictional vacancy rate and we identified I think, a submarket that we started to mine and so we were already pursuing another asset in that area so again, start with the research, let the research tell you where to invest, develop a strategy around it and then mine the market and you know CAA we had been monitoring for some time.  There were some expectations of higher pricing, we had done all the work, it didn't make economic sense and we kept it on the monitor until the pricing came in line with where we believed we could make money on it.
Susan Freeman
Yes that's great and you probably know this but for those of us that aren't able to own our own space house you can actually buy a cardboard model of it courtesy of Brutal London.
Tyler Goodwin
Yeah I've got it.
Susan Freeman
So I think… oh you've got it, okay.
Tyler Goodwin
Yeah we bought it for all the team. The architecture is extraordinary and you know it's Marche that actually did the design, Richard Seifert, architects.  I just think it is iconic.  When we started doing the due diligence we discovered something that made me, made us all from excited to really passionate about what we can do with the space and that is first of all the buildings were assembled like, like out of building blocks so it was all pre-cast construction and so the floors have these pre-cast fins so it is not like columns, there are these pre-cast fins that hang down and in the tower itself versus the block, the Kingsway block, the tower at One Kemble it's clear span, it's column free from the central core to the outside perimeter and the perimeter of the structure is the structural, it's not just beautiful to look at, it's, it forms the exterior structure of the building and so you've got these beautiful radiating fins that we are going to expose and you've got this great gap of about 40 centimetres wide by 22 centimetres deep so we can… we are exploring right now MEP solutions that include like multi surface chilled beam technology but bringing the surfaces up into the fins and making for a really clean exposed surface but with that brutalist, you are really bringing the brutalist architecture from the outside into the space and letting tenants celebrate that space.
Susan Freeman
One thing I hadn't realised, obviously I knew it had been designed by Richard Seifert in the same way as Centre Point but I read somewhere that the reason that it is circular is because of rights of light, that the only way they could get round rights of light was to actually make it circular rather than rectangular.
Tyler Goodwin
Yeah I mean I hadn't read that one, I've read some because he was a bit of a space nut and that was a time, I mean it was designed, we've got this rendering that we found on RADA's archives that show it as built in 1960 and it wasn't built until '68 so you can imagine, I mean they really put a lot of thought and work into it and you know, it's for whatever reasons, I mean he was also… Seifert was meant to be a planning genius and kind of gamed the system and worked the system to deliver something that, that was iconic and I think the Centre Point was designed around the same time and I think that is also, that's a great example of beautiful architecture and a shout out to Almacantar,  I think Mike, Mike and his team have done a really extraordinary job on it and so I mean its, its… we point to that and say okay, you know, this is an example of a before and after and its really, its driving us to kind of set a new standard with, with Space House.  We plan on activating the plane, the ground floor plane creating food and beverage and retail and place making and giving, giving the public places that they can sit there and enjoy a coffee and enjoy the architecture.  We also are, I mean it is a listed building you know, we are spending a lot of money on, on cleaning and actually re-maintaining the building because there's been patch up work that's been done that you can see now has aged differently in time and so we really want to bring it back to its former glory when it was built.  So we are really excited about it.
Susan Freeman
I'm really excited about it especially as it is a short walk from my office.
Tyler Goodwin
Yeah.
Susan Freeman
Now one of the things we talked about a little bit when comparing Hong Kong real estate, London real estate is the diversity issue and the difficulty recruiting women at senior level into real estate and I wondered if you had any particular thoughts on that one?
Tyler Goodwin
You are really teeing me up on that.  Yeah I think it's a problem I mean I heard the term the other day 'stale male and pale' you know describing our industry.  You know I've spent 13 years in Hong Kong and if you think about Hong Kong and China and doing business there especially the Chinese one child policy, what it really created was this, was this culture where from a young age their daughters are told 'don't let anybody tell you you can't do whatever you want to do' and it has created some incredible business leaders and you know, in our industry at JP Morgan and Deutsche you know we were pretty close to 50/50 men and women and you under estimated a woman at your peril.  You just wouldn't do it and I really, you know, I've come here and I know its, its more and more people are becoming aware of it.  We've actually got a search so you can't advertise, which I did once and got called out like within 2 hours, you cannot put that you are looking for a wo… you know I had to take it down and so we have hired a firm, Ferguson Partners and they are really I think, Serena Oldhouse and Chloe Duckworth are both working on this mandate to find us, you know, senior women.  I think it's important for our business.  We are investment managers, we are investing in product and creating environments that you know are there for the entire population, not just built for men but also if you look at the quality of investment decisions there is a lot of research that shows that you know, a balanced investment committee takes the testosterone out of investment decisions.  It also, in terms of a work environment, it creates a much more respectful and balanced work environment.  So there are a lot of reasons why I think it's, it's important to have diversity.  I, you know, we are kind of the United Nations in our office, you've seen in terms of where people come from but we are not there yet with regards to you know, diversity in attracting women at a senior level and to get that one solved first, which Ferguson knows, it is my highest priority, then sends a message to other women that want to join Seaforth that there is no glass ceiling, you know, that there's room for growth, it's a meritocracy.
Susan Freeman
Well I endorse all that and Tyler, just so that our listeners can get an idea about you, they don't know you, you travel round London on a motorcycle and you generally arrive at meetings wearing or carrying a helmet and is that a good way of getting around or…?
Tyler Goodwin
It's amazing.  I mean I'm… you're 30 minutes from anywhere in this town on a motorcycle and if you are in a car it is challenging.  Sometimes the tube is alright but it's a great way to learn the city you know, if you think about location, location, location, just the fundamentals that people… I believe really what people are talking about is amenity value and amenity value is often driven by access and egress which is driven by transportation linkages and road flows and the best way to experience a city I believe is you know, walk the streets which I also do, so I walk to a lot of meetings and, and get on your bike and so on weekends I'll actually get on my bicycle and tour different markets, it's a great way to see the city and experience it and see where there's pockets of density, where there's path of growth, where there's really interesting new shops or coffee shops and where the youth are congregating, where you know, tourism foot fall is.  These are all things that drive value.
Susan Freeman
It does have its downside, I do seem to remember you were a little bit late for a meeting recently because there was a doctor's appointment but perhaps we'll just skim over that one.
Tyler Goodwin
Yeah there is, and the pun of a downfall yeah.  I mean there's risks but there's risks on a bicycle and there's risks on a motorcycle and there's risks walking and life's kind of short.  I really enjoy it so I am going to stick with it.
Susan Freeman
I think I will hold out for the motorised scooters, I think that's going to be my mode of transport.  And in London at the weekend, how do you spend, how do you spend your down time?
Tyler Goodwin
I work a lot these days, I mean we are a 3 year old business and I've got, I mean we've all got big plans for Seaforth so you know, I, I work at least one day on the weekend and I've got two fantastic kids, an 18 year old boy, Connor and a 16 year old girl, Talia and an incredible wife, Vera, who we've just celebrated 20 years together, who is really a partner, I mean a partner in life but also you know, has been incredibly supportive in my business and taking this, you know we started out of you know, an office in my house and you know we've now got a world class team and making world class investments and she has been there through the whole ride so we like to, we like to get out, we're kind of foodies and but also we just like to you know walk the streets and there is so much to offer, I mean London has so much to offer so yeah.  Spend time with the family.
Susan Freeman
Yes I agree with you, I agree with you on that one and it should be an interesting year ahead against the backdrop of uncertainty on various… which should present opportunities for you and Seaforth.
Tyler Goodwin
Yeah, yeah absolutely.
Susan Freeman
Thank you Tyler that was amazing.  I think you can see why Tyler Goodwin is described as the archetypal disruptor and I think we will be hearing a lot more from Tyler Goodwin and Seaforth Land in the coming years.  So that's it for now.  I hope you enjoyed it.  We certainly did and please join me for the next PropertyShe interview.  In the meantime please subscribe to the PropertyShe podcast which you will find on your Apple Podcast App; if you want to get in touch, email me via our PropertyShe webpage on Mishcon.com/propertyshe and of course, follow me on Twitter @propertyshe for details of our next guests.  Thanks for listening and see you again soon.

Tyler is the Founder and CEO of Seaforth Land, the recent purchasers of the iconic, Seifert designed, CAA House, Kingsway (also known as Space House). He has 30 years of global real estate experience including 20 years in Asia working through both the Asian Financial Crisis and the Global Financial Crisis.

Tyler has worked in property development, advisory and investment banking, principal investment, and investment management and has lived and worked in North America, Asia and Europe. He has a deep knowledge and understanding of sovereign and institutional real estate investors.

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