Ian Formigle of CrowdStreet

    We Spoke to Ian Formigle of CrowdStreet on How to Rebuild in the Post COVID Economy

    As part of my series about the “How Business Leaders Plan To Rebuild In The Post COVID Economy,” I had the pleasure of interviewing Ian Formigle.

    Ian is a real estate professional and serial entrepreneur with over 24 years of experience in real estate private equity, equity options trading and start-ups. Ian is Vice President of Investments at CrowdStreet, overseeing its marketplace, an online commercial real estate investment platform that has completed over 400 offerings totaling some $13.7 billion of commercial real estate. Ian is the author of “The Comprehensive Guide to Commercial Real Estate Investing” and he is a contributing author at

    Prior to joining CrowdStreet, Ian was VP of Business Development for ScanlanKemperBard Companies, where he managed the firm’s alternative investment platform and served as a senior acquisitions officer. Previously, Ian cofounded and served as CEO of Clarus Property Ventures, a regional real estate private equity firm that focused on multifamily acquisitions. Ian began his career as an equity options market maker and member of the Pacific Exchange. Ian holds a BA in Economics and a BA in Political Science from the University of California at Berkeley as well as Series 7 and 63 licenses.

    Thank you so much for your time! I know that you are a very busy person. Our readers would love to “get to know you” a bit better. Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?

    I moved to Portland, OR in 2005 and spent the next five years syndicating multifamily deals around the United States. Prior to 2005, I was a derivatives trader based in San Francisco and, as a result, I was not accustomed to traveling for work east of the Mississippi.

    As I began to build relationships on the East Coast, people would typically ask me, “Where are you from?” to which I would reply, “Portland”. What I failed to realize that first year was that people assumed I was from Portland, ME. It turns out that Portland, ME and Portland, OR have enough similar traits that you can speak about one city but reasonably describe the other one as well. This led to me having entire conversations with people where, to them, I described life in a city that I have never actually visited!

    My takeaway from that experience was that by adding just a small amount of clarification to a statement or by asking a simple qualifying question upfront, you can avoid a tremendous amount of miscommunication and misunderstanding down the road.

    Is there a particular book that you read, or podcast you listened to, that really helped you in your career? Can you explain?

    I love both reading and listening to podcasts, so I’ll provide an example of each:

    Favorite book: The Mystery of Capital by Hernando De Soto. I read this book early in my career and it greatly boosted my understanding of capitalism and how capital is formed. It’s a great foundational book for anyone who wants to focus their career on business and finance. As an additional note, I absolutely love any book written by Malcolm Gladwell. I have read everything he’s ever written.

    Favorite Podcast: Freakonomics. I am a big fan of Steven Dubner and Steve Levitt. Aside from their books, Dubner’s podcast is always so insightful. I depend on it to challenge and evolve my thinking. Some of the best interviews I’ve ever heard are from this podcast series.

    Extensive research suggests that “purpose driven business” are more successful in many areas. When you started your company what was your vision, your purpose?

    To be clear, I didn’t start CrowdStreet. It was co-founded by Darren Powderly and Tore Steen. However, I am Employee #2 and I joined in the summer of 2014 when CrowdStreet was just a handful of people subleasing a corner of another company’s office.

    I do think it is fair to say that I have contributed greatly to the vision and purpose of CrowdStreet, which is, namely, reinventing real estate investing to deliver better financial outcomes, particularly for individual investors. I came from the institutional side of commercial real estate private equity and, therefore, I had seen the tremendous wealth that can be created through investing. Yet, at the same time, I had also experienced a bit of the hollowness associated with making a large amount of institutional capital slightly larger through the successful exit of a deal. As an individual investor, I fundamentally believed that individuals should have access to the same quality of commercial real estate investments that had largely been the exclusive domain of large institutions. A legislative change that was enacted in September of 2013 made it possible for CrowdStreet to exist and presented the opportunity to change this paradigm. We’ve been fulfilling this vision for investors across the U.S. since April of 2014.

    Do you have a “number one principle” that guides you through the ups and downs of running a business?

    I operate with two intertwined guiding principles. First, identify your true customer. In the case of CrowdStreet that’s the individual investor. Second, always place the interests of your customers ahead of those of your company. Period. I often find myself saying to my team and colleagues, “If we do what is best for our investors, despite any pain it might cause us in the short run, it will always work out in the long run.”

    The Covid-19 pandemic has affected nearly every aspect of our lives today. For the benefit of empowering our readers, can you share with our readers a few of the personal and family related challenges you faced during this crisis? Can you share what you’ve done to address those challenges?

    COVID-19 has presented countless challenges for all of us, and there are definitely a few that stand out for me. The first is that I miss interacting in-person with my team at work. We have formed a tight-knit unit over the past few years and I never quite realized that a portion of my personal happiness is correlated to the happiness of my team. To mitigate this, our team has instituted a daily 30 minute “hangout” session at the beginning of each workday. We invariably end up discussing work items but the meeting has no agenda and all participants are encouraged to simply “hang out” and talk about anything that’s on their mind. These sessions have led to some amazing ideas and thoughtful interactions. It has been so successful that our team intends to continue a live version of these hangouts once we are able to safely return to our office.

    The other challenge for my family has been that our relatives (both my wife’s and mine) live out of state. This means that it has now been months since our family has seen any of our relatives, and that will likely continue for multiple more months. To address this situation, we have done two things: 1) Like so many others, we schedule Zoom meetings with our family. It’s no substitute for seeing them in person but it’s the best, safest alternative we currently have; and 2) We have identified a couple of our best friends who have similar circumstances and we, periodically, visit with them at a distance outside of our homes. Simply sitting on the opposite sides of the street with our best friends, seeing them, and speaking with them (although it feels more like calling to them), has helped our family cope with quarantine. Normally, our family is very social, so this has been an especially challenging time for us.

    Can you share a few of the biggest work related challenges you are facing during this pandemic? Can you share what you’ve done to address those challenges?

    While our company was able to seamlessly transition to being 100% remote starting in mid-March, we have experienced a few distinct challenges in this new environment. The first has been onboarding new hires that have joined us since the beginning of the pandemic. Carefully planned training modules and an orchestrated series of online meetings have helped us ramp our new employees, but it’s an inferior substitute for hands-on, face-to-face training.

    The second challenge has been maintaining our company culture. Our company thrives on our team environment and interconnectivity. We have been the type of company that enjoys team outings both for fun and community service. Going 100% remote has temporarily removed a key pillar of our company culture. We now have weekly virtual all-hands meetings and our People Ops team holds online meetings to discuss non-work related topics and we constantly hold team “hangouts” to recreate as much of our team vibe as possible. It’s not an adequate substitute for actually hanging out and building upon company culture, but it’s the best we can do given the circumstances..

    Finally, I have found it challenging to keep larger and, particularly, cross-functional teams on the same page when a project is moving swiftly with multiple components. In a work environment where everyone’s calendar is filled top to bottom with Zoom meetings, it’s nearly impossible to grab five people across our organization for five minutes to have a quick check-in. Using Slack for impromptu meetings has helped, but I would say we’re still working on this one.

    Many people have become anxious from the dramatic jolts of the news cycle. The fears related to the coronavirus pandemic have understandably heightened a sense of uncertainty, fear, and loneliness. What are a few ideas that you have used to offer support to your family and loved ones who were feeling anxious? Can you explain?

    The single best thing that has come out of COVID for me has been the ability to spend additional time with my family. My wife and I have taken an approach of being transparent with our kids when it comes to discussing the pandemic but also a perspective that, ultimately, our country will be able to move past this. Kids are resilient and it has been inspiring for my wife and me to see how well my 13-year-old daughter and 10-year-old son have adapted.

    When it becomes evident that anxiety and tensions are mounting, we pause and reset by taking the time to do small things like taking a walk. When anxiety spikes, refocusing our energy on spending quality time as a family and simply enjoying one another’s company has worked well for us.

    Obviously we can’t know for certain what the Post-Covid economy will look like. But we can of course try our best to be prepared. We can reasonably assume that the Post-Covid economy will be a trying time for many people across the globe. Yet at the same time the Post-Covid growth can be a time of opportunity. Can you share a few of the opportunities that you anticipate in the Post-Covid economy?

    If there is one thing that is certain it is that the dislocation and destructive effects of COVID-19 on our economy will ultimately create new opportunities as the economy recovers. For the U.S. commercial real estate market, I see a bit of a reversal of our urbanization trend of the past decade, bringing new demand to our inner suburbs. Prior to the pandemic, our inner suburbs were already becoming more attractive places to live, to the point that the Urban Land Institute recently coined a new term “Hipsturbia” as a way to describe them.

    The first opportunity I see coming out of this trend is a resurgence in demand for suburban office space. With a national workforce that now needs additional space per employee, our suburbs both have the available space to offer workers and at a price that is far more affordable than the core of our cities. I expect to see companies recognize this situation and begin to take advantage of it in the year ahead.

    The second opportunity I see is in the emergence of a form of multifamily development known as “Built to Rent”. This format blends traditional multifamily with single-family residences, creating a singly-owned and operated community of small single-family residences (think bungalows) but which has the amenities and operating style of a multifamily property. These properties will also be located in our nation’s suburbs and they will provide a compelling alternative for demographics such as emerging families and empty nesters, to urban apartment living. CrowdStreet is actively pursuing opportunities in this sector for our Marketplace.

    The third opportunity I see is the coming transformation of co-working. Generally speaking, I have been a believer in the business model of co-working–its rise in popularity was not coincidental. In essence, I have viewed this as making small office space operate more like a multifamily property. What I saw as unsustainable was co-working companies taking on long-term lease obligations and reselling them at a premium on a short-term basis and with no obligations. This is the business model of WeWork. Real estate is a cyclical industry and this model becomes challenged in any downturn. Coming out of the pandemic, I see a migration towards a more sustainable version of co-working–namely one in which co-working companies partner with landlords by operating as a manager of co-working spaces and sharing the upside rewards as well as the downside risk. Companies such as Industrious already employ this business model and, thus, I see great opportunities for others to enter the space or adapt to this model over the coming years. Co-working will eventually reclaim its position of importance within the commercial real estate industry; it will just look different than it does today.

    How do you think the COVID pandemic might permanently change the way we behave, act or live?

    While history shows that human behavior tends to revert to its pre-pandemic ways within 1–2 years after a pandemic, I do believe that there are certain aspects of the COVID-19 pandemic that will have long-lasting effects.

    The first change in behavior I see taking hold is a reduction in certain types of business travel. There is a fair amount of business travel that is tied solely to in-person meetings. Now that those meetings have been forced to go virtual, I believe some of them will remain that way or, at the very least, intersperse virtual meetings into a series of formerly all in-person meetings.

    The second change I see is a slow down and potential reversal of parts of the U.S. urbanization trend that saw massive growth in our largest cities over the last two decades. Between rapidly rising housing costs and growing congestion, some of the allure of the big city had already started to wane in recent years. Now, with a pandemic that has made life in our most densely populated cities feel temporarily untenable, and a series of violent protests that have recently rocked the core of upwards of 30 cities across the nation, the urban lifestyle is taking a hit right now. Ultimately, I believe our large cities will rebound as they have historically demonstrated resilience. However, I also believe that inner ring suburban cities that were already in the process of transitioning into live-work-play environments in their own right will see tailwinds over the next few years that will accelerate their growth.

    The third change I see is an acceleration in U.S migratory patterns towards secondary cities and sunbelt locations. With numerous companies announcing that they are shifting portions of their work forces to work-from-home or allowing their employees to opt in to working from home indefinitely (e.g. Twitter), I think we will see people take advantage of their newfound flexibility and move to a different metro area. Many of the jobs that will become more flexible in their physical location are tech-related, so I would expect to see some migration out of the most expensive tech hubs (most notably the Bay Area) to less expensive metros where they can find increased quality of life. So, in essence, I see the same metros that have already benefited from this trend, such as Austin, Portland, Denver, Tampa Bay and Nashville, continuing to do so in the years ahead with some acceleration.

    Considering the potential challenges and opportunities in the Post-Covid economy, what do you personally plan to do to rebuild and grow your business or organization in the Post-Covid Economy?

    The greatest challenge as well as opportunity we see as we navigate a COVID-19 economy, is pivoting our Marketplace to enhance its relevance in the current market environment. CrowdStreet operates a commercial real estate investment marketplace that pairs operators and developers with private investors on an array of projects. As we entered into a state of world pandemic in mid-March, it unleashed an extreme amount of uncertainty in the commercial real estate market. The easiest response to the onset of the pandemic would have been to shut down our marketplace and reopen it once certainty returned. However, we felt we had a duty to take the more challenging road of retooling our marketing and finding the handful of investment opportunities that make sense right now.

    The first action we took was to redefine and hone our investment criteria to reflect a recessionary environment and assert requirements for post-COVID underwriting assumptions. With that work behind us, we then went on to triage our pipeline of roughly 45 deals in active screening at the time, jettison those that no longer made sense, determine the go-forward criteria on deals that might still make sense, and fast track the remainder that definitely still made sense.

    Two and half months later, we have a refined, focused, and highly relevant marketplace. And, we have learned so much by continuing to operate through this period — it would have been a huge opportunity missed had we shut down. As a result, we now find ourselves becoming a national go-to source for equity funding because we are fully functioning and have clarity on what types of deals in which markets will attract investor capital. In some respects, we feel we are having our “Zoom” moment.

    Similarly, what would you encourage others to do?

    I encourage others to embrace the dislocation and uncertainty of 2020, and utilize it as a catalyst for change. Examine your priorities, pivot, and then take decisive action. It can be anything in your life. For example, I have an old friend in the Bay Area who recently announced that he is leaving a highly successful 20+ year career in Silicon Valley to move to the big island of Hawaii with his family in order to dedicate the rest of his career to climate change. In addition, don’t forget that some of the world’s most successful companies including Microsoft, Google, Salesforce and Facebook, were started on the precipice of or during a recession. Crisis creates opportunity and we depend upon those who see it and act upon it to create a better world for all of us.

    Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

    I have had the privilege to learn from three mentors in my professional life thus far. One of the favorite quotes of my second mentor, which is largely attributed to Charles Darwin but, in actuality, is a paraphrase of Darwin’s work from Leon C. Megginson, a professor at Louisiana State University at Baton Rouge in 1963, that seems particularly fitting right now:

    “It is not the most intellectual of the species that survives; it is not the strongest that survives; but the species that survives is the one that is able best to adapt and adjust to the changing environment in which it finds itself.”

    We are entering a period of time in which those who are best equipped to adapt will survive and thrive in the years ahead while others, who fail to adapt, may quickly move to obsolescence.

    How can our readers further follow your work?

    There are a number of ways. First, I’m easy to find on LinkedIn as I’m the only Ian Formigle. I post updates there fairly regularly. Second, I have published a book called, “The Comprehensive Guide to Commercial Real Estate Investing”. It’s available on Amazon. Third, I’m a contributing author for Forbes, so people can find my work on this platform. And, finally, there’s no better way to follow my work than to check in regularly on our website: In addition to my content, visitors can find a wealth of information on commercial real estate investing. We constantly publish, so there will always be fresh information to read.