PROFILEMiami had the exclusive opportunity to sit down with Simon S. Mass, CEO and Founder of The Condo Store (TCS). Simon is often recognized as the “architect” of the pre-construction condo investment sector in Canada, with over $25 billion in project transactions and a distinguished reputation that spans across North America. The Condo Store, which now hosts over fifty team members and more than 350 sophisticated high-net-worth clients from around the globe, started as a ten-person boutique firm he co-founded in 2004. Simon and TCS recently launched operations in Miami.
Simon has long-term relationships with hundreds of clients that include doctors, medical practitioners, and business professionals across Canada and now the United States. TCS clients account for over $500 million in annual investments.
It is common knowledge that condo investments have been one of the highest grossing asset classes over the past 25 years. These high-level personal connections allow TCS clients to have an advantage in the sector and ensures investing into a real estate project is targeted and knowledge based.
PROFILEmiami recently caught up with Simon amid his busy schedule managing TCS’s launch in Miami and developing Casa B&B Italia, a new construction luxury private residence on Miami’s Venetian Islands designed by Doo Architecture and winner of the 2020 Interior Design Magazine Best of Year for Residential Unbuilt Category and the 2019 Rethinking the Future Awards for Private Residential Concept:
PROFILE: Tell us about your background, how did you get involved in real estate?
Simon Mass: Purely by chance. I left the United Kingdom after graduating with an Engineering and Management undergraduate degree from Bath University to enroll into an MBA program at Schulich School of Business in Toronto, Canada. The idea was to graduate with an MBA, complete the marketing speciality, and enter the world of business back in London, UK. Honestly, at that time, I didn’t have a specific career path in mind and was open to finding that path organically and with no urgency, just like any other typical 21-year-old.
Real estate wasn’t on the agenda for me in terms of a business environment. I had a definite and keen interest in architecture and interior design but that was really for my own personal and vivid imagination. I was always thinking about and looking at real estate publications wondering what appealed to me and what I thought I’d like to own someday for my home.
PROFILE: How did you first get involved investing in pre-construction condominiums?
SM: While adjusting to the colder climate and heavy snowfall that are part of the winter season in most of Canada, I got lost in a snowstorm trying to find the University campus and stumbled upon a trailer that housed the sales center for a pre-construction development. Before I knew it, I had the real estate bug and fell into the pre-construction investment world.
The minute I realized that I could enjoy my time at work, make a living and grow a business and not be working for someone else, I knew that I should take extra care in understanding and utilizing the pre-construction investment model and not just look at it as a small-time side hustle while still trying to discover my calling. Without looking back, I quickly decided to make it my calling and decided to bring in many friends and family for the ride that proved to be a small steppingstone to growing the wealth of so many people around me that followed the same path. As the saying goes, the ‘snowball effect’ kicked in and people were contacting me and saying they had heard that I had insider deals with pre-construction developers, and they wanted to be given the same opportunity to make a lot of money and invest in a bricks and mortar opportunity versus risking their hard-earned money in the speculative stock market.
PROFILE: What was your first real estate deal that you worked on?
SM: This dates to the mid 1990’s and was a catalyst to my eventual decision to stay in Toronto and slowly set up the first business model for TCS. Shortly after the snowstorm incident, with just a handful of friends and classmates, I managed to secure a small number of units in a master planned community in downtown Toronto. I believe it was just twenty units, which at that time was substantial considering the average broker in the mid-1990’s handled ten transactions per year. This first foray into bulk transactions allowed me to establish a relationship with the head of the sales and marketing division at the multi-billion-dollar development (which now spans several city blocks and has over 22 towers).
It became apparent right after this 20-unit bulk deal that prices were increasing at a substantial rate and that if I was able to convince developers to reduce the down payment requirement for my firm and keep the normal, much higher rate for the brokerage and general public, I would be able to skew the ROI’s (cash-on-cash returns) for our ventures to levels that would not be conceivable to most investors. This first project had multiple other phases and the initial phase sold out within a few weeks, therefore giving me the confidence that pricing for future phases would be much higher.
PROFILE: What is your investment philosophy in regard to investing in pre-construction condominiums?
SM: Our success has been derived in large part by working with the best and most powerful developers, focusing on gentrification locations, and staying in it for the long-term. With respect to growing the business, we have been almost entirely referral based as we are not an advertiser of any kind, and we do not even show our offers to the general public. Our clients appreciate that exclusivity and reward us by continuing to purchase and invest through our firm recognizing the returns that they have recorded over the years.
PROFILE: Tell us about The Condo Store and what you guys do?
SM: Extremely important to note that 90% of our clients are doctors and surgeons. From day one, I have had a connection to medical professionals as they were my friends who had also recently graduated and entered the work force in Toronto. I always felt somewhat guilty that I graduated with both an undergrade and postgraduate degree in under five years whereas my friends who decided to go into the medical sector would only enter the work force after 9-12 years of schooling alongside a massive debt. It didn’t seem fair, and I wanted to specifically bring them in; in a way that they would be financially rewarded through real estate investing through my direct involvement.
TCS partners with developers to secure a large number of units in a new pre-construction building; in high density projects, we seek a minimum of 25% of the entire inventory, and in low density buildings, we can go as high as 100% of the inventory. Once we have secured the project with special terms (highlighted by a low-down payment structure) through educating developers and their financial lenders that it’s safer to have pre-construction buyers to have six to seven figure salaries and secure earnings (i.e., doctors) with career paths that were practically guaranteed until retirement age, over every other demographic. We keep it simple in terms of presentation materials, doctors are far too busy for long investment decks. We present the opportunity to our clients in real time, with no favoritism or special treatment on a first-come, first-served basis.
We curate only the best investments for our clients, and if that means we do not have an offer for a few months or even a full year, then that is what we will do. We will not risk our reputation to send a ‘just OK’ investment deal to our loyal clients.
The core tenet that has built our referral-based business is having skin in the game. What that means is that for every offer we put in front of our clients, we (myself and business partner, John Mehlenbacher) invest in multiple units in each deal. We invest alongside our clients and that is what differentiates us from almost everyone in the space.
PROFILE: What have been some of the keys to TCS producing consistent, successful returns for your investors?
SM: Quality and time. We hand pick three or four of the best sites annually (out of 150+ launches) and develop them into lucrative leverage-based deals; we don’t deviate from the fundamentals of a solid investment and never chase a deal.
We are not just a real estate company; we are an investment company that specializes in real estate. Keeping true to our principles, where we invest side-by-side with our clients, we ultimately offer that rare quality of being in every deal that we present. With that, we do not pump out offer after offer every other week and we are not willing to sell run-of-the-mill projects that, in our opinion, won’t allow for significant double digit returns to our clients.
PROFILE: You are now opening in Miami, can you discuss your expansion to South Florida?
SM: We have seen many of our doctor clients leave Canada for the United States. They asked for our assistance, and we also understand the magnitude of the U.S. market as it’s ten times larger than Canada population wise, and that allows us to work with millions of doctors all living, working, and seeking investments in Miami.
With our track record amongst their peers, we feel that we can grow our referral-based business within the medical practitioner space at a level that will over time be two or three times the size of our Canadian operations.
Over the years we have been able to understand the needs and wants of our core clients, and we can bring that outlook and experience to an entirely different market. We’ll bring the fundamentals of what a great real estate investment is and push to create the same deals and opportunities in Miami that we are known for in Toronto.
PROFILE: What is your outlook on the real estate market in Miami amid a changing economic environment and rising interest rates?
SM: Miami has unique characteristics that can influence its real estate market, so it goes without saying that I am very bullish on real estate investing in the right locations across Florida.
With a dynamic tourism sector that keeps on growing, and foreign investments that is now super-charged with an aggressive domestic immigration push from American citizens changing their residence to Florida and moving here and making it their home, there is so much positive news for the sunshine state.
Miami’s real estate market is for the time being only minimally being influenced by a changing economic environment and rising interest rates. Looking to the future, I believe that we have yet to see the actual real estate boom that Miami (or generally Florida) has been chronicled to have been in for years. The next 10 years will most likely see massive price appreciation that will make this city even more expensive on many levels.
PROFILE: What is the biggest hurdle that you have had to overcome in your career?
SM: I’ve been very fortunate and would be the first to call myself a workaholic since a very early age. There’s a fundamental reason for my success as I’ve had the advantage of loving what I do and as such, not counting down the hours each day to end my work schedule and start on my social calendar.
I’ve overcome the hurdle of listening to all the noise in the market by keeping my mind open. Information is power, so listening to everyone but not being influenced by everyone is the challenge. For example, taking in information from so-called ‘institutional experts’ but not being bound to call it solid. Especially from those ‘experts’ who in my humble opinion are so often wrong when it comes to the real estate market, and it’s future.
I have also found that economists, for the most part, always have a skewed perspective on the value proposition of the real estate space and tend to downplay the psychological consumer mindset when it comes to property ownership.
I have been lucky that my gut feelings combined with analyzing the economic fundamentals have typically played out well; and let’s not forget that Toronto has been on a 32 year real estate growth run. That has obviously helped in our firm’s double digit, cash-on-cash, annual returns.
PROFILE: What was the first gift you bought yourself after closing a big deal or first big development?
SM: Very cliché…I walked into a Porsche dealership and an hour later, drove out in a 911. Since I was a small child, I was always in love with sports cars, so I was fortunate enough to start with a 911 in my early twenties with money that I had made from my own hard work and risk-taking tactics.
I still treat myself after every single venture as I believe that to stay motivated, an entrepreneur needs to be self-incentivized. I will add a charitable donation to my self gift-giving ritual as I feel it’s imperative that we realize how fortunate we are and to give back, even if it’s a small donation. It’s a lifestyle necessity, in my mind, to count your blessings and pay it forward.
PROFILE: Describe your perfect Saturday night in Miami?
SM: So, it all depends on who the other friends or clients are, sometimes it’s a chill evening at one of my favorite restaurants in SoFi, for example, Call me Gaby where the ambiance of European dining in a unpretentious space is always inviting. Sometimes it’s a longer evening of cocktails and fine dining at one of the many restaurants that have opened in Miami (that have outposts all across the world), such as LPM, The Surf Club or Carbone.
I’ve never been a big drinker and prefer a good dinner over a few bottles of wine. Makes my Sunday mornings a lot more efficient and painless.
PROFILE: Where do we find you on your day off?
SM: If you ask anyone that knows me well, they will tell you that I need a day off.
I’m always “on” because I enjoy what I do, as making money for your friends and clients is beyond rewarding. Deal making is a undertaking that I’m very-very passionate about. I take my role in building wealth for clients very seriously – and that’s one of the main reasons that TCS is known as the largest pre-construction investment firm in Canada built on a referral network that keeps on growing.