March 12, 2022
Ex-Winnipegger Morley Greene looks back on how his hometown shaped his no-nonsense approach to building one of Canada’s most successful property investment firms
Ex-Winnipegger Morley Greene looks back on how his hometown shaped his no-nonsense approach to building one of Canada’s most successful property investment firms.
If Morley Greene finds out you’re from Winnipeg, the founder of one of Canada’s most successful commercial real estate investment firms perks up.
And he is likely to ask a flurry of questions.
What neighbourhood do you live in?
What’s the last name of your spouse?
How’s the weather?
The gregarious octogenarian comes by this curiosity honestly.
He grew up in Winnipeg’s North End, got his law degree at the University of Manitoba and practiced law here before moving to Vancouver.
His fondness for the prairie city is palpable, bolstered by nostalgia of his youth.
“The 1950s was really a great time to grow up in Winnipeg,” says Greene, chief executive officer of Trez Capital, an asset management firm running a handful of real estate funds.
Trez, by the way, may not be a household name in Winnipeg.
But the firm has quietly amassed $4 billion in assets under management, based on a track record of delivering steady returns to investors.
Trez Capital’s Yield Trust mortgage investment fund, for example, has an annualized yield of 7.7 per cent over the last decade.
And Greene is quick to note the foundation for his company’s success is in part a result of his experience growing up in Winnipeg.
“They used to say, ‘If you can make it in Winnipeg, you can make it anywhere.’”
Growing up in a diverse neighbourhood of migrants from all over the world in the 1940s and 50s, there was a sense of competition and drive to achieve like few other places, he says.
“Everyone was just making their way, and you know, somebody once told me that on a pound-for-pound basis, more successful people came out of the North End of Winnipeg than New York’s (Lower) East Side,” Greene says, referencing Manhattan’s legendary neighbourhood, once renowned for its diversity of newcomers in hot pursuit of happiness and wealth in the Big Apple.
“(The North End) was a tough bunch of people, a close-knit circle and highly competitive — people just wanted to achieve.”
Indeed that describes Greene himself, who worked for several years as a lawyer, but eventually switched careers and began lending to commercial developers in Alberta.
“When I made the decision to start Trez, there was a lot of activity in Alberta, but people really disregarded Edmonton.”
Not Greene though.
“People were saying to me, ‘Morley, Edmonton? That’s crazy!’”
Yet Edmonton was in short supply of lenders, but it had plenty of demand for borrowers in commercial real estate. The lack of competition allowed Trez to find strong borrowers while charging a slightly higher interest rate. The approach proved successful. Over the next several years, Trez became a leading commercial real estate lender in Western Canada.
Finding overlooked markets became a hallmark of Trez, and led to it investing in the U.S. following the Great Recession in 2008/2009.
“When we went down to Dallas in 2010, people again thought we were crazy,” he says about the commercial property market there, still reeling from the financial crisis.
“We were among the first to take the leap in Texas, and it ended up working so well that other investors followed.”
Today, Trez is still focused on the southern U.S. based on straightforward premise: strong population growth and not enough housing.
“Right now, for whatever reason, there is a huge shortage,” he says. “And it doesn’t look like that is going to be solved soon, so we’re heavily invested in multi-family.”
The premise is the same in Canada, though it’s most pronounced in Toronto and Vancouver.
“One hundred thousand people a year move to the GTA (Greater Toronto Area), and about 50,000 per year to the Lower Mainland in B.C,” Greene notes.
While the pandemic initially presented challenges, real estate has become the hottest of asset classes since.
“It has been a can’t-miss situation because everything has been booming everywhere.”
Those boom times are likely to end, he cautions.
Still real estate remains a good investment especially in a high inflation environment. Investors who put in the homework are often rewarded, he adds.
“If you don’t work hard and research, you may get lucky once or twice, but luck runs out eventually.”
Greene adds critical to success is hiring good people with the expertise—that you can trust.
It may sound elementary, but too often in real estate investors find themselves trapped in a losing deal because they’ve trusted the wrong people, Greene says.
“Frankly most people don’t have the time or the knowledge to invest on their own.”
And while it’s often easy to get into an investment, “what if someone doesn’t pay; then what do you do?” Greene asks. “That’s why you need the right people, and that’s what we give investors; we do the right things; we do the research, and if there’s a problem, we’re not calling you up and asking you to solve it because that’s our job.”
As for Manitoba, Greene says it’s an intriguing market, but one Trez hasn’t turned its attention to yet.
“We have nothing against Manitoba per se,” he says. “It’s just we’ve been so busy elsewhere with high growth.”
That hasn’t stopped the company from generating interest from investors here. Trez has about 1,400 investors from Manitoba, including 30 that are institutional (i.e. pension funds).
Perhaps it’s Trez’s simple, but painstaking approach to real estate investing — forged in the hardscrabble, snowy streets of Winterpeg — that resonates with local investors.
“Providing reliable income — that’s all we do,” Greene says. “We really try to make real estate for our investors an armchair investment.”