The post The Calgary Real Estate Forum – Panelist Frank Lonardelli appeared first on Arlington Group.

To me, the most important quality of an effective leader is recognizing and encouraging leadership qualities in others. Over the holiday season, our 2012 scholarship recipient Almaz Aschalew demonstrated this quality in spades.

She was attending an end of year celebration at Gordon Bell High School for The Peaceful Village, an after-school program that supports struggling students – primarily newcomers to Canada. Almaz herself is a testament to its success, having gone from attending, to volunteering, to working for the program.

The event featured performances from Gordon Bell students and at the end of the event, the newest “villagers” were invited to share their own traditions with the group.

According to Marc Kuly, an Assistant Professor at the University of Winnipeg and ASFS board member who was attending the event, a few teenage boys who recently arrived from Syria made their way to the front. As they looked out on the crowd of about 400 people, it looked as though their nerves were about to get the better of them.

“Almaz was sitting in the row ahead of me, next to another Syrian boy,” said Marc. “She kept tapping him on the shoulder and pointing to the other boys saying, ‘they need your help’.”

Just as the boys were about to return to their seats, she persuaded the young man next to her to join them. With his help, they formed a line, held hands, and as the music began to play, they launched into a wild folk dance.

“The crowd went nuts,” Mark said. “But the boys weren’t that coordinated. They still needed a bit more help.”

Then, an older man walked out of the crowd, took a string of beads from his pocket, faced the boys, began swinging the beads and took over the line. The dance restarted.

“It was amazing – foot stomping, whirling, everyone in the crowd was on their feet,” said Marc. “These men were dancing, when just six months ago, they were running for their lives. Honestly, it was an amazing moment.”

So, what does this have to do with Almaz? None of it happens without her recognizing a leader and showing him the opportunity in front of him.

That is exactly what this scholarship (and being a leader) is all about.

The post The Best Leaders Create Leaders appeared first on Arlington Group.

We start businesses because we are passionate about something, but there is always a risk of getting bogged down in all the other details that go along with running a business and losing that entrepreneurial spirit.

I’ve been an entrepreneur my entire life. I’ve been a relatively successful one because I’ve learned to focus on achieving my goals and the goals of those who work for me, not the goals of my business; pursuing the passion and letting the business follow, rather than the other way around.

My experience has taught me there are three stages to the life of a successful entrepreneur:

Epiphany

You realize you want to do what you love and you’ve got a great idea to make that happen. You may have only mastered one element of the dozen or so you actually need to become successful, but you jump right in anyway.

Turbulence

You discover everything you weren’t aware you needed to understand in order to succeed. You are confronted by the reality of all the things you’re not good at (and/or hate doing) and all the time you’re doing the things you hate instead of the one thing that made you decide to become an entrepreneur in the first place. You then experience hating everything… or almost everything.

Every entrepreneur at this stage runs the risk of becoming a slave to their business. The company has a life of its own and uses you to reach to its goals. Unfortunately, most entrepreneurs live as slaves to their companies and, by default, the company uses the entrepreneur to get to its goals. It should always be the other way around. The company is there to meet the goals of those that created it. In other words, the company is a vehicle for the entrepreneur to get what they want. It’s the only way to get to the third stage: Zen.

Zen

After many years and lots of battle scars, you finally ask, “What do I really want to do with my life?” It’s an important question because your only real asset, your human capital, is your time and the energy you invest into the company. You can always make more money but you can never make up for the time you’ve lost. So don’t do the stuff you hate. Hire someone else who loves doing it instead. And don’t allow the company to control you. You control it.

I don’t see myself as a real estate developer. I’m an entrepreneur first, an investor of real estate second, and a developer third. That outlook gives me a very different approach to the business of building buildings.

Everything we talk about at Arlington Street Investments is about human capital and where we’re going to put our energy. We ask ourselves, “what do we want to create in this universe?” And then we go and create that outcome.

The post Zen and the Art of Entrepreneurship appeared first on Arlington Group.

In many ways, that defines the Alberta Advantage: a wide open plain where you can forge your own success – historically, in oil and gas. But linking the Alberta Advantage directly to the booms of one specific industry is what makes the busts so damn painful.

To me, the Alberta Advantage represents the entrepreneurial spirit of the people that have chosen to make Alberta home. People have come to Alberta from all over Canada and have made names for themselves as innovators and business leaders. No one cares where you grew up or where you went to school. They care about your ideas and what you can contribute to keeping that Alberta Advantage alive.

The Alberta Advantage is what drives those booms and it will be what pulls us out of this bust. It’s what has enabled the people here to figure out how to get oil out of sand, clay and water and make it a key economic driver for the province. And it will be the reason we will be successful in building new and diverse economic drivers in the years to come. It’s one of the reasons I chose to make here my home and establish my business.

So what am I doing to contribute to the Alberta Advantage? I’m investing in a vibrant city. Calgary has the advantage of being one of the safest cities in Canada. I grew up in Winnipeg, four blocks away from the murder capital of Canada. Safe and vibrant cities are something I value. While affluent communities tend to be safer than less prosperous ones, investing in unique, smart development also plays a role.

Despite those boom-and-bust cycles, Calgary is constantly evolving. It’s grown from a sleepy, one-horse/business town surrounded by acreages and strip malls to a small but exciting metropolis with a growing core full of more than just energy companies.

Now there are restaurants, retail stores and other specialty businesses. People are moving back into the city centre, making it safer and more vibrant. They’re creating new and successful businesses of their own. It’s a whole new cycle.

I’m proud of the work that my company has done and continues to do to grow and diversify the Alberta Advantage. Innovation and an entrepreneurial spirit are what built this province. They’re what will pull us out of the current bust. So I’m asking each and every one of you: What’s your idea?

The post Redefining the Alberta Advantage appeared first on Arlington Group.

As the city’s demographic has changed we are seeing more people wanting to spend less time commuting and more time living, working and playing in their neighbourhoods. That attitude is changing the way our city is being developed. As a result, urbanization is reducing urban sprawl and creating a denser and more vibrant core.

People are shrinking their footprint. The demand for those McMansions out in the ‘burbs and the bland strip malls that accompany them is diminishing. That trend is going to continue because of the prosperity and the money that’s been poured into the central city — even as the price of oil has dropped. This trend is doing all kinds of great things for Calgary and we appreciate many of the benefits. The benefits correlate not just to business but to building vibrant metropolitan areas, which bring with them cultural, societal, pedestrian and economic benefits.

From 2000 to 2015, approximately 20 million square feet was added into the downtown core’s density. A little less than half of that was residential mixed use, which reflects that live/work/play attitude. That has done great things for the core: more people, more vibrancy, better streetscapes, better retail, and safer central neighbourhoods.

Building a vibrant city means, to me, investing in the lifestyle and atmosphere that brings people into areas. It’s what most people remember when they travel to any city. My company’s focus is on the development of Calgary’s Beltline, including areas of the downtown core and 17th Avenue.

The density up and down 17th Avenue is continuing to increase. A lot of new buildings have been constructed and there are many more in the works — a few of them from my company. I think we’re going to start seeing a lot of improvements being made to existing buildings too; upgrading spaces that haven’t been well taken care of and adding new structures to existing ones, modernizing the existing streetscape, while maintaining some of the history.

As things evolve, we’re going to see significantly more dynamic streetscapes. The growing number of successful restaurants and bars and their clientele, who live in the neighbourhood and also further afield, are beginning to attract other types of businesses, including fashion boutiques, furniture shops and other specialty retail.

I’d like to see 17th Avenue evolve into our own unique version of Vancouver’s Robson, Toronto’s Bloor, or Montreal’s St-Denis or St-Catherine. People will move away from coming to 17th just for a particular shop, restaurant or bar, and instead the street and the neighbourhood will become a destination unto itself. Our vision is for people to just say, “let’s head to 17th Avenue.”

Investing in vibrant cities rather than just the buildings within them has an exponentially higher return for all stakeholders and helps create communities that everyone wants to live in.

The post Building Vibrant Cities appeared first on Arlington Group.

When I was in junior and senior high school, I wasn’t a very good student. I was a little hard to deal with. I was, however, a four-sport athlete with a lot of promise and people noticed. I played on most provincial teams and won the freshman and varsity of the year awards.

No matter what sport it was, or what was going on outside of the game, I never thought about how we were going to win or if I was going to score a goal. To me, it was always a certainty: we were going to win and I was going to score a lot. And sure, that attitude brought me some success and I did okay, but I never really achieved as much as I could have.

My athleticism allowed me to do great things, but it didn’t allow me to be very heady. I didn’t really think about what I was doing, but it got me to a certain point, however it held me back from the next level. My success came from my athleticism, but I never spent a great deal of time thinking about what I was doing, I just did it. While this “way of being” allowed me to attain a certain level of success, it absolutely kept me from the highest levels.

Brute force and natural talent will only take you so far, but without discipline and the refined skill of using your mind, you’re going to tap out before you reach your full potential.

I never went beyond the basic limitations of my raw talent because I never did the thinking. It’s great to go in with confidence, however it’s preparation that wins you not just one game, but game after game after game.

When I got a little older, coaches started teaching me about visualization and being prepared before you show up; that the game is won long before it starts. That was a big shift in mindset for me. I learned to ask myself: “Are you prepared? Did you put the time in? Have you thought about what you’re going to do and all the scenarios that will appear from the start to the end of the game?”

Another problem was that I was somewhat un-coachable and most of this came from the fact that I was making decisions for myself and by myself as early as six and seven years old. Coaches didn’t know how to talk to me and I didn’t know how to talk to them. In all fairness, I didn’t really know how to talk to people, in general. I look at old pictures of me as a kid and see that I communicated with my body. I never talked. And when I did talk, often nothing really good came out, which was a reflection of what was going on inside. That held me back. Everything I have been able to achieve to date starts with thinking first, critically communicating through the process and, finally, having a focused disposition to critique and measure everything I do.

The benefit of not talking for as many years as I did is that it allowed me to become an acute listener, and that skill allows me to hear not so much what people say as what they don’t say. It’s given me a skill that I realize many do not, the ability to see around corners.

It’s been an interesting process. I know having people understand what was going on in my mind when I was playing competitive sports would have allowed me to excel far beyond what I was able to achieve. So today, I look at all obstacles holistically as challenges that need to be overcome.

The post Frankly Speaking: Learning the Value of Preparation and Communication appeared first on Arlington Group.

“I want my life to be noteworthy.”

At the time, I thought achieving that goal could be done through excelling at sports and business. I now know that living a noteworthy life requires more than just those simple definitions of success; it requires giving back and paying it forward.

I started the Arlington Street Foundation Scholarship (ASFS) to give back to the place that gave me the tools I needed to succeed, and to give future Gordon Bell graduates the tools they need to overcome adversity and create their own noteworthy lives. Watch the short video below to learn how ASFS is helping its recipients achieve their goals.

The post The Power of Paying it Forward: The Arlington Street Foundation Scholarship appeared first on Arlington Group.

Mr. Lonardelli has always pushed himself to succeed. As a young man, he was able to create a name for himself, first as a successful entrepreneur in the food and coffee business, then in the residential real estate business in his Winnipeg hometown.

And today, Mr. Lonardelli is once more making a name for himself, in arguably a far more competitive, high-stakes industry, namely that of commercial real estate development. As founder and CEO of Arlington Street Investments, a mid-size, Calgary-based commercial real estate investment firm, this second-generation Italian immigrant now makes investment decisions that have a dramatic impact on the growth and character of the Calgary downtown skyline and beltline.

But, that’s exactly what makes Mr. Lonardelli’s level of success so interesting – the fact that he came from such humble upbringings and was able to work his way up. And that’s what we would like to try to explore today with Mr. Lonardelli.

First off, thank you for taking the time out of your schedule to speak with us.

Frank Lonardelli: You’re welcome. It’s my pleasure.

Entrepreneurship is in many ways a double-edged sword. It can inspire great and sometimes quick success. But, it also carries with it risk and the potential for enormous financial failure. Your experience in the food services business was in many ways your first stepping-stone to your current position. Was there any specific quality of yours that helped you become a successful entrepreneur?

Frank Lonardelli: Well, looking back on my early childhood, I think many people would consider it something of a curse. But, for me, it taught me two values which I’ve always thought to be a key to success, especially business success: one, my experience taught me how to overcome adversity; and second, it taught me the importance of maintaining a positive attitude, no matter what the circumstances are. Despite all the adversity I saw when I was a child, I also saw tremendous opportunity. And having the ability to see opportunity, and to see opportunity that everyone else misses – that’s something I’ve always focused on personally and something I’ve urged my team at Arlington Street to focus on as well.

After your experience in the food services business and the residential real estate business, what inspired you to jump into commercial real estate development? Was it just the right time to reach for a higher, arguably more challenging career goal? And were there any particular experiences you had in residential real estate that helped in your transition to commercial investment?

Frank Lonardelli: Sure, that’s a good question. There were actually two reasons why I chose to move into commercial development: one, having been both a tenant and a small business owner, I knew that at that time, when I was moving into commercial development, there were very few office spaces in the high-end market with any sort of inspiring design work. The choices were, to put it pretty plainly, very vanilla. And so I knew that there was great opportunity in the market to build and design unique and inspiring spaces. So, that was one source of motivation.

Also, I’ve always been inspired by buildings and building design and I knew that moving into commercial development would give me an opportunity to work in designing and redeveloping some very inspiring buildings, which would be very exciting.

To answer the second part of your question, as far as whether there was anything that helped in my transition from real estate to commercial development, I’d say there definitely was. At Arlington Street, my team and I are always looking to stay ahead of the curve in our investments and in the development of our investments. We’re always looking to build ahead of Calgary’s growth, so that the market catches up to us and not the other way around. This is a strategy and investment disposition that I’ve always had and which was the same disposition I had when I was in residential real estate.

A quality of yours that stands out is your level of ambition. Is there anything that helps sustain your ambition? Or, in other words, now that you’ve reached a fairly high level of success, what keeps you hungry?

Frank Lonardelli: Well, first off, I don’t think we’ve achieved any high level of success at all. I’ve always believed that my past would be dwarfed by future success, and so that is always a source of inspiration that keeps me ambitious. But, the long and short of it is that we at Arlington Street have a long way to go and we have nothing but opportunity ahead of us.

Jumping to present day, what’s your greatest source of pride as founder and President of Arlington Street?

Frank Lonardelli: Another good question. First off, I’m incredibly proud that we’ve been able to build such an incredible team here at Arlington Street in such a short amount of time. That really excites me. And a second point of pride for me relates to something completely different. I learned early on in my career that businesses have to be the vehicle for the founder’s goals and not the other way around. It’s sad to say, but business owners rarely ever achieve what they set out to do by forming their business – in essence, they become slaves to their companies. Moreover, they rarely achieve what we all want, and that is freedom. I’m happy to say that Arlington Street has been a vehicle for me to do other things in life that I truly value, such as invest more of my time and energy into my Arlington Street Foundation Scholarship program. And that truly gives me a source of pride.

Not to take up too much more of your time, as a parting question, looking out five years from now, where do you see yourself and Arlington Street? Do you have any specific company goals or benchmarks in mind that you would like to see accomplished?

Frank Lonardelli: Absolutely we do. First off, Arlington Street Investments will have a billion dollar portfolio. We will also have Western Canadian assets, including assets in British Columbia, Edmonton, Vancouver and one in a Prairie province. We will be predominantly funded by pension funds and large institutions in addition to our accredited investor network and family offices. And, last by not least, we will be a direct conduit for investment education nationally.

Again, thank you very much for your time.

Frank Lonardelli: It was my pleasure.

The post A Q&A with Frank Lonardelli: What Motivates Professional Ambition appeared first on Arlington Group.

You can see this tagline on Arlington Street’s website; you can see it ending the blog posts that Frank regularly writes to his investors; and you can see its influence in the abundant investor literature and videos that Arlington Street produces for each one of its development projects.

But, the question remains – one that will undoubtedly enter the minds of those unfamiliar with Arlington Street – and that question is – what does “Frankly Speaking” mean? And how does it relate to Frank Lonardelli’s model for leading a successful commercial real estate investment firm?

“A common sense approach to real estate investment combined with investment intelligence”. That’s how Frank Lonardelli describes it. He continues on, “Our motto at Arlington Street – ‘Frankly Speaking’ – really means one thing: it means that I want my investors to understand what they’re investing their hard earned capital into. When they come to Arlington Street and choose to invest their capital with us, I don’t want them to have to face any ambiguities or obscurities as to what they are investing in which includes both the opportunities and the risks associated with that opportunity. I want to give them clear information and precise updates on our development projects. It’s always been to me, a really simple equation which is twofold: Firstly, don’t assume that an investor knows the details that affect him or her just because you are living it every day. Secondly, an educated investor is significantly more meaningful to the long term best interests of the company. These two fundamental principles of investor engagement directly serve the best interests of both the company and all of our valued investors.”

Frank Lonardelli then adds, “That’s why I value so highly the literature, annual shareholders meetings, and consistent updates that my team produces, which describe in detail the latest in our development projects.”

Indeed, taking a look at Arlington Street’s website, arlingtonstreet.ca with its multiple project pages and investor education pages, one can see just how much the company values keeping their investors informed of the latest company news and milestones.

One article of investment material, produced by Frank Lonardelli and his team, demonstrates a simple example of how Arlington communicates the meaning of “Frankly Speaking”. It is a short video featured on their website shot for their 8th Avenue Limited project. In less than 20 minutes, the video discusses in pretty clear detail, the full gamut of the development of the project from the asset selection process to project management and construction, innovative design features that create value to the project and subsequently to its investors, leasing, financial modeling, return on investment and investment structure and the transactions between all of these.

The video is indeed a real example of a C.E.O. of a company who understands how important his investors are and who is more than willing to take the time to directly communicate to them.

“Shooting that video was tremendously exciting,” Frank Lonardelli adds. “And more importantly, it proved to be very informative for our investors. It doesn’t take a lot to communicate and I’ve always been somewhat blown away by how most investment companies seem to never want to get into the real meaningful aspects of an investment as opposed to just the flashy sales and marketing brochures.”

The post How to Communicate with Investors and Why appeared first on Arlington Group.

As has been generally agreed upon, prior to the implementation of Bill 31-103, the exempt market was almost a completely deregulated investment space. In the pre-2008 exempt market, an issuer of an investment product would sell their investment product through agents and would enjoy very little scrutiny from any sort of regulatory body. To add to this, agents themselves had little obligation to obtain any sort of financial education or certification. Agents with little financial knowledge, issuers with no oversight, a marketplace with little regulatory input equals a perfect recipe for the failure in 2008.

But, what about now, post-2008? To provide a brief summary of the major changes authored in by Bill 31-103, many of which are common knowledge within the market, issuers of investment products in the Exempt Market now have to sell their product through a dealer. In turn, exempt market dealers must hold a license and are under the direct governance of their regional securities commission. In a similar vein, exempt market agents or representatives now have to fulfill a certain educational requirement in order to be a representative.

It’s clear what Bill 31-103 was trying to do. But, five years after its implementation, the key question is this: has the bill done enough? Are its mandates accurately and effectively addressing what was the wrong with the market pre-2008? And to add another question to the list – if another large-scale correction hits the private investment market, will it once more expose a house of cards – will it once more expose the kind of high-risk, uninformed investments that we saw in 2008 in the exempt market and which made the 2008 financial turmoil that much worse?

Frank Lonardelli and his commercial real estate development firm, Arlington Street Investments, have been working in Alberta’s exempt market ever since Arlington Street’s founding in 2005. Most recently, Arlington Street Investments was a winner of 2013’s Exempt Market Dealers Association of Canada (EMDA) Award. So, it’s clear that Frank Lonardelli, along with his team at Arlington Street, know fairly well the effects of Bill 31-103, as well as, more generally, the current state of the Canadian exempt market.

And as Frank Lonardelli equitably points out, “Bill 31-103 is a good first step to improving and safeguarding investors in the exempt market. However, in the end, more work still needs to be done.”

Following this general appraisal, Mr. Lonardelli quickly points out some specifics as to what can and should be done to improve the current exempt market. He cites the educational requirement of the exempt market representatives, which in Mr. Lonardelli’s mind is still too insufficient given the responsibility that representatives have to the integrity of the market as a whole and to the investment public. “The reality is that the exempt market contains investments that are fairly sophisticated and fairly complicated”, Frank Lonardelli points out. “And part of the problem that we had in the market pre-2008 was that we had too many representatives with low levels of financial education and proficiency. And that was very problematic. So, yes, I don’t want the same thing to happen twice, nor does anyone else. And that means I would like to see the education requirement for representatives increased, and not just initially, but I believe that there is a requirement for ongoing education.”

Frank Lonardelli then mentions one more feature of the current exempt market that needs to change, which is the cost of capital. Currently running at 6% to 12%, the cost of capital in the exempt market right now is much too high according to Mr. Lonardelli. “By cost of capital, I’m referring to the amount of commission in which dealers are demanding from their issuers, and in many cases, are fanning. The reality is that if a product sold in the exempt market is going to be successful, the cost of capital has to be reduced,” Frank Lonardelli mentions. “This is both for the well-being of the dealerships, as well as the issuers. In the end, even if we have a perfectly balanced and perfectly regulated exempt market, no one will want to be a part of it if the cost of doing business is too high – that’s just the bottom line.”

The post The Current State of the Exempt Market appeared first on Arlington Group.