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On Leadership: Rael L. Diamond
The president and CEO of Choice Properties, Canada’s largest REIT, talks about creating long-term value in projects where people and the community can thrive, the outlook for commercial real estate in Canada, and the importance of bringing people back to the office.
Development: What drew you to a career in commercial real estate?
Rael L. Diamond: I am South African. My parents moved to Canada while I was still in school, which is where I received my degree as a chartered accountant. My first job was with Deloitte and my first assignment was a funeral home. My vision was to work for a big bank, so I went to my manager and asked to be moved to the banking side of the business. Instead, I got what was considered the worst job in the office: working for a real estate company.
Rael L. Diamond
It was known for its unyielding long hours, but it turned out to be the best thing that could have happened to me. I got to learn and understand the business of real estate from the financial side. Because of this experience, I was offered a job with Brookfield Asset Management. I became the CFO of three of its subsidiaries and Brookfield Office Properties Canada.
After that, I took a job as CFO with the Canadian Real Estate Investment Trust (CREIT). In 2015, I was named COO. When Choice Properties acquired CREIT in 2018, I took on the leadership role of COO of Choice. In 2019, I was appointed CEO. I am grateful to have worked for an amazing group of dedicated, smart and talented people at both CREIT and Choice.
Development: How did Choice Properties, headquartered in Toronto, become the largest REIT in Canada?
Diamond: Loblaw, a leading Canadian food retailer, had the strategy to purchase the land associated with the food stores it opened. In 2012, Loblaw announced it would spin off most of its real estate properties into a new real estate investment trust: Choice Properties Real Estate Investment Trust. Loblaw initially transferred 425 properties, 415 of which were retail properties, worth approximately $7 billion to the new company.
In 2018, Choice Properties acquired CREIT, a diversified commercial REIT, for $3.9 billion. The CREIT acquisition allowed Choice to diversify its portfolio into industrial and other nonretail properties and made it Canada’s largest REIT.
Development: Can you discuss why the portfolio is focused on retail, industrial, and mixed-use, transit-oriented residential but not office?
Diamond: We want all our operating platforms to have scale because it allows us to develop great expertise and market knowledge. Secondly, it allows us to attract and hire phenomenal talent.
When we looked at our portfolio, we certainly had scale in retail with about $10 billion in assets. When we acquired CREIT, it gave us $4 billion in industrial, enabling us to easily get to scale in that sector because we have a huge pipeline of projects. We also have a large potential for residential. However, for office, we did not have the means to grow it to scale, which is why we exited office in 2022.
Development: Do you plan to expand your activities beyond Canada in the future?
Diamond: We will focus strictly on Canada. There is such huge development potential right here on land we already own, so we don’t feel the need to look beyond our borders.
Development: With 700-plus properties across Canada, a net-zero emissions goal by 2050, and 5,000-plus employee volunteer hours working in communities in which you do business, Choice is certainly making an impact. Could you talk about your commitment to environmental, social and governance (ESG) sustainability?
Diamond: Real estate is a long-term endeavor. When you own properties for an extended period, you develop a vested interest not only in those assets but also in the communities where they are located.
Given our size and influence, we believe that leading in ESG practices is the right thing to do. By engaging in placemaking and community partnerships, we can positively impact these communities. Our goal is for our properties to become hubs for community gatherings and celebrations, contributing to the long-term improvement of the areas where we operate.
Development: What has been your greatest challenge leading Choice Properties?
Diamond: When Choice acquired CREIT several years ago, we conducted a survey to determine if Choice was a great place to work. At that time, the results were around 50%. We have since worked hard to improve the workplace environment, and now, survey results are over 90% positive.
Another significant challenge was COVID-19. Tenants were reluctant to pay rent, and our colleagues could not come into the office. However, because we had established a safe, secure, collaborative and engaging culture in the years before the pandemic, we were able to transition smoothly and continue performing exceptionally well.
Development: What does leadership mean to you? How would you define your role as leader?
Diamond: Great leadership enables the people around you to make impactful decisions. A truly great leader cares that their employees are advancing the business and is invested in guiding them while they feel engaged and motivated to succeed.
Development: What are your primary responsibilities as CEO?
Diamond: My job is to foster great relationships with our major stakeholders and ensure that through those relationships, we are achieving the desired outcomes. I do not focus on one specific area. I spend time with the board, our investors, development partners and our colleagues. I also spend a great deal of time on new business initiatives.
I know that some of my peers spend significantly more time on investor relations. That is important, and we do spend an appropriate amount of time there. However, to me, it is not the single most important part of my role. My primary, relentless focus is driving our business forward to the benefit of all our stakeholders.
Development: What qualities do you look for when hiring senior leadership?
Diamond: The most important qualities are that they are collaborative, thoughtful and hard-driving. When I say hard-driving, I mean having a passion for getting results. I don’t want someone with sharp elbows, because we spend a lot of time building a culture in which people look out for their colleagues. I want someone who accomplishes great things and brings a team along with them, someone who is complementary to our great culture.
Development: When internal conflicts or mistakes arise, how do you handle them?
Diamond: We all make mistakes. I am more concerned with the process that went into the decision-making. Part of a great leader’s role is to encourage people to make decisions. And if the decision-making process was sound, we will deal with a potential mistake and manage any potential outcomes thoughtfully and strategically.
On the other hand, if someone did something inappropriate that could hurt our reputation, that is a very serious offense, and we would need to deal with it.
Development: What is your outlook for commercial real estate in Canada over the next three to five years? Are there areas of the business that concern you?
Diamond: I am bullish on the three asset classes in which we are heavily invested, but especially on retail because there has been a lack of new supply outside of the major markets. We have many neighborhood shopping centers in those markets, and I think we can drive rent growth over time. On the industrial side, there has been a pause in the market, but it is nothing we are concerned about in the long term. On residential, Canada is suffering from a lack of housing supply. If we can be part of the solution, we are very bullish on housing.
I am, however, concerned about the office sector. In our organization, we believe the office is a place where collaboration happens, and we have strong attendance at our offices. Some organizations allow too much work from home, and I believe it is detrimental to their culture and long-term success. As long as these lenient policies continue, I think the office market will be challenging. I strongly feel that one needs a work culture where more time is spent in the office.
Development: What advice would you give to someone coming into the real estate business today?
Diamond: Work at something you feel passionate about and work for a person who really wants you to learn and grow. The other piece of advice I would give is that you must show up. You must give your all to the job. As I look around our organization today, I see people who are exceptionally talented and smart, and they are giving their all to their job. Those people are going to do great things with us, and I am very excited about that.
Development: Being CEO of Choice Properties is highly demanding. How do you like to spend your time away from work?
Diamond: I am very fortunate. I have a wonderful family with three young children who are 16, 12 and 10. I also enjoy keeping active. I work out daily, and I like to play golf once a week. But being with my family is most important to me.
Ron Derven is a contributing editor to Development magazine.
