Meet The Disruptors: Travis Goad Of Pelorus Equity Group On The Five Things You Need To Shake Up Your Industry
An Interview With Fotis Georgiadis
Stay curious and keep learning. It’s important not to be complacent in your career journey. You should always be pushing to learn more and grow your skill sets to better understand your industry and opportunities within it.
As a part of our series about business leaders who are shaking things up in their industry, I had the pleasure of interviewing Travis Goad.
Travis Goad brings more than a decade of experience in commercial real estate (CRE) investing to his role as Managing Partner at Pelorus Equity Group. His background in equity investment spans across all CRE asset classes and distressed mall acquisitions, along with seeding early-stage, cannabis sale-leaseback REITs. He is a tremendous asset to the Pelorus team as they work to provide high-performance loans to cannabis businesses operating in the highly regulated marketplace, and drive value for their investors.
Thank you so much for doing this with us! Before we dig in, our readers would like to get to know you a bit more. Can you tell us a bit about your “backstory”? What led you to this particular career path?
I finished grad school just before the global financial crisis ensued. Given the economic situation at the time, I found a place working out distressed debt on the lender side, where I did some of the largest debt restructurings in commercial mortgage-backed security. After that, I spent time in institutional real estate doing both debt and equity investments. Previously, I was at a New York-based hedge fund, led Special Situations investing for a real estate private equity group and founded TG Capital Advisors, which advised on over $1 billion in distressed debt restructurings.
Over the last 10 years, I saw too much capital chasing, too few deals and risk-adjusted yields across asset classes at historic lows. I invested personally in some of the early Canadian operators, which did not go well, but it taught me some key lessons and got my eye focused on the opportunity set in cannabis. In the U.S., I noticed that cannabis was one of the few sectors where I saw the inverse — multiple interesting deals happening, but not enough capital. While doing special situations at the private equity group, I got them to do their first cannabis investments. We were early stage investors in Green Acreage REIT and Treehouse REIT — both of which are sale-leaseback REITS in the cannabis sector. As our firm allocated capital to the equity side, I wanted to see who was doing interesting things on the debt side, which is how I initially met my current partners. I saw a great opportunity to get into a new industry early on and apply the skills I’d developed in the non-cannabis world. That led me to my partnership with Dan Leimel and Rob Sechrist, the co-founders of Pelorus — and the rest is history.
Can you tell our readers what it is about the work you’re doing that’s disruptive?
We’re disruptive because we’re on the cutting edge of lending in an entire, new industry, and providing capital when most traditional lenders won’t, given the conflict between state and federal policies. By taking lessons we’ve learned over our careers in non-cannabis real estate lending and applying it to this new industry, we’re bringing institutional rigor to the cannabis lending market. Most lending markets are built on years of data, when coming up with default and loss rates. Cannabis is still very new, so you don’t really have those robust, historical data sets to work with. It’s been fun and challenging to create the right credit underwriting box to lend capital in this space successfully. We’ve created our own proprietary data analytics platform to support the industry.
Pelorus is the longest running cannabis real estate lender in the sector. My partners closed their first cannabis loan in 2016, and we’ve since funded over $350M in loans and have over 24 payoffs. It’s satisfying to have a lending model proof itself over time, and we can really see the worth from our particular brand of disruption.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?
My first big mistake was actually two mistakes rolled into one. While I was in grad school, I had my first big job interview in New York City. I had to get to a dinner that was part of this larger interview day. Not knowing my way around and worried I’d be late, I made the first mistake of taking a rickshaw to dinner. My second mistake was telling people I took a rickshaw to dinner. They laughed, I did not get the job, and I learned the importance of appearances when interviewing — and that walking is the most efficient way around the city.
We all need a little help along the journey. Who have been some of your mentors? Can you share a story about how they made an impact?
I completely agree with that sentiment. Everyone that’s made progress in their career received help from someone along the way, whether it was a boss or mentor. For me it was both. One of my longstanding mentor relationships is with Steven Fischer, a real estate investor in South Florida. Early in my career, he took me under his wing and taught me a lot about how to think about risk and reward in investing. His guidance was critical in my learning process and did a lot to speed up my professional development. Additionally, I received a lot of support from a former boss of mine, Steve Gordon, while positioned at the New York hedge fund. He gave me my first job on Wall Street and really elevated me in that world at a critical time in my career. The learning experiences I had while working under him were invaluable, and helped to forge many of the opportunities I still benefit from today.
In today’s parlance, being disruptive is usually a positive adjective. But is disrupting always good? When do we say the converse, that a system or structure has ‘withstood the test of time’? Can you articulate to our readers when disrupting an industry is positive, and when disrupting an industry is ‘not so positive’? Can you share some examples of what you mean?
I’d say all disruptive forces in an industry are a mix of positive and negative, depending on which stakeholder’s perspective you’re considering. For instance, take the developments in automated truck driving. While such an advancement would be incredibly positive for trucking companies by lowering the cost to ship goods across the country, it would be very negative for people who currently hold those jobs. Employment demand for drivers would fall — but demand for other jobs would potentially increase. That’s the creative destruction of capitalism in a nutshell. Any individual view on the positivity or negativity of disruptions entirely depends on where that individual’s interests lie.
However, I also believe other things that claim to be disruptive have yet to play out as such. I’d highlight cryptocurrency as an example. Crypto has been massively disruptive as a new speculative asset class, and created wealth for a select group of people. So far, it’s unclear to me which medium of exchange problems its creation was intended to solve. Very few transactions happen via cryptocurrency when compared to normal banking transactions, and those transitions that do occur are typically more expensive and less efficient to complete. It’s been more than 10 years, and blockchain has yet to displace meaningful industries. The use-case to me is unclear, except to speculate and trade.
Can you share five of the best words of advice you’ve gotten along your journey? Please give a story or example for each.
First and foremost, stay curious and keep learning. It’s important not to be complacent in your career journey. You should always be pushing to learn more and grow your skill sets to better understand your industry and opportunities within it. Secondly, but equally important — bet on yourself. As you grow in your career, or in other avenues of life, be willing to take calculated risks where the outcome — good or bad — is largely dependent on the dedication of your own performance. It can feel uncomfortable and scary at times, but that internally sourced motivation to succeed can push you to achieve really great things. Lastly, take risks. It really does come back to avoiding that risk of growing complacent and stagnating where you are. Nothing ventured, nothing gained is a life lesson that remains relevant for all aspects of life.
We are sure you aren’t done. How are you going to shake things up next?
We plan to continue to fill vital capital needs within the ever-evolving cannabis sector. We’re always looking at new markets to enter, international and domestic, in addition to considering new vehicles of funding we can launch to tackle those opportunities we see in the industry. In a space as young and fast-moving as cannabis, there are always dislocations and opportunities to put capital to work.
Do you have a book, podcast, or talk that’s had a deep impact on your thinking? Can you share a story with us? Can you explain why it was so resonant with you?
One book I read recently is Drunk: How We Sipped, Danced, and Stumbled Our Way to Civilization by Edward Slingerland. It’s an interesting read; typically in a historical context, things like alcohol and cannabis are treated as a footnote, despite evidence of substance use dating back to the earliest civilizations. Slingerland argues that rather than being a footnote to history, these substances were actually crucial to the formation of civilization because of how they relax the prefrontal cortex. This subsequently allows trust to be built between people more easily, as well as enhancing creativity and relieving stress. Overall, the book does a great job addressing that without intoxication, we would not have civilization. It’s an interesting perspective and a fun read.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
Making efforts to improve outreach and provide better educational resources to people in smaller towns, while focusing less on affluent areas, could be greatly beneficial in terms of identifying real talent and it would help people in underserved communities achieve great things. I come from a small town and had a very modest upbringing. I’ve seen so many other smart, capable people grow up that way, but they have such limited exposure to the broader world that they can’t realize their ideal career path or even know what they’re missing out on. It took me a lot of trial, error and hard work to figure out what opportunities were already out there and how to find them. Whether it’s finding the right college to attend or the industry that’s best suited for their skill set, it’s really important to make people aware of all the options they have. I’d love to see more programs that give students in small towns better access to varied industry professionals — people who can share their career story and the path they walked to get there. With the expansion of Zoom and remote technology, there are a lot more resources now that we can utilize to educate kids who are growing up in similar situations that I did, and deserve just as much consideration as I’ve received.
How can our readers follow you online?
I am personally active on my Linkedin profile, but readers should also keep an eye on my wider work with Pelorus — particularly any real estate owners out there with cannabis-use properties, and big and larger operators in the space that are in need of timely financing for mission-critical construction or build-outs for tenant improvements. For any borrower/broker inquiries, you can always email us at [email protected]; and for investors who have inquiries about the Pelorus Fund, you can reach out to [email protected].
This was very inspiring. Thank you so much for joining us!
Meet The Disruptors: Travis Goad Of Pelorus Equity Group On The Five Things You Need To Shake Up… was originally published in Authority Magazine on Medium, where people are continuing the conversation by highlighting and responding to this story.
