Meet Janine Yorio, the CEO and founder of Compound, a new app that is reimagining how the world invests in urban residential real estate.
Just in New York City alone, Compound estimates approximately $840 million worth of condos are purchased by investors each year – and many of those buyers are high-net worth individuals and corporations. Today, with the help of Compound, a larger universe of people can now invest in residential condos in the world’s most desired cities, including Miami, Austin, Brooklyn, and more.
Yorio, who previously worked at Standard Hotels and NorthStar Capital, has managed over $2 billion in real estate investments throughout the course of her career and estimates Compounds technology has the potential to create over $10 billion a year in new demand for condo properties nationwide – IMPRESSIVE!
With Compound’s eyes on the world’s hottest cities, Yorio’s vision has no end in sight. From being a working mom, to a highly successful woman in Manhattan’s male-dominated real estate arena – she shares more on the app, how it’s going to make you $$$, how she juggles it all!
Can you tell us your background story that has lead you to launch Compound?
Janine Yorio (JY): When I graduated from college, I moved to New York City for a job on Wall Street. Soon after, I started saving to buy my first apartment. Back then, a one-bedroom apartment in Manhattan cost about $100,000. I distinctly remember thinking that was an absurd amount of money to spend on a mere 600 square feet. (In hindsight, it was a steal — a fraction of what it would be worth today.)
A few years later, I dropped $225,000 on a small one-bedroom apartment, did some renovations, and flipped it a year later for $386,000. At the time, the profits felt like a fortune to me, and I used the proceeds to buy a bigger and better apartment. Turns out, I never should have sold it, though. It recently sold for $1,250,000. I came to realize that these profits weren’t atypical in Manhattan real estate; I’ve watched friends buy apartments in New York City and realize significant financial gains, even though they never set out to be real estate investors, per se. Though real estate has long been associated and muddled with spreadsheets, financials, and complex models, my friends and many others simply invested intuitively, in neighborhoods and areas that they liked and thought had promise and the potential to appreciate.
In New York City, 65% of the population rents, up from 60% just a few years ago. Meanwhile, home prices have doubled over the past decade. All those renters have missed out on that appreciation.
There is an inherent value in city condos and apartments, and while it shouldn’t be so hard to buy an apartment in a fast-growing city, it is. I believe that more people should be able to own real estate in the cities where they live and work, which was exactly the impetus for Compound.
My career path has led me to a unique niche at the intersection of real estate and consumer brands, and Compound is the product of those passions. I was previously head of real estate development at Standard Hotels, and prior to that, I was a portfolio manager at NorthStar Capital, a real estate private equity firm, which, at the time, managed more than $4 billion in institutional capital. Compound’s technology-enabled marketplace enables everyone to own a piece of the world’s best cities.
What is Compound?
JY: Compound is reimagining how the world invests in urban residential real estate. Compound’s technology connects investors from diverse backgrounds and geographies — who have historically not had access to high-quality urban residential real estate — and allows them to pool their capital to buy apartments in high-growth cities. We’re shifting the narrative of real estate ownership from being an “all or nothing” proposition to “some for all.”
How does the Compound app work?
JY: Compound identifies condominiums that are suitable for investment, and then “slices” each property into 100,000 shares. Investors can purchase shares through an SEC-qualified securities offering on the Compound app. Properties are managed and leased by Compound (either to traditional 12-month tenants or as short-term rentals), and investors receive dividends and build wealth through capital appreciation.
We’ll be launching with condos in Miami, New York City, and Austin, but it’s only just the beginning. With the Compound app, users will be able to pick real estate like they pick stocks, and built a personal collection of urban residential real estate.
Who is the Compound audience? Millennials? Women?
JY: Real estate is a long-term investment, and the earlier you start, the better. Our app is truly for anyone, however statistically speaking, millennials are more likely to invest on their phones. We expect that people who already use apps like Robinhood, Acorns, and Cash App, are candidates for Compound.
What are your 3 predictions for the real estate market in the next 5 years?
- Declining home ownership. Fewer people are choosing to buy homes than in previous generations. They prefer the (financial and literal) flexibility of renting. This will create an interesting dynamic since the generation of renters also happens to be a generation that loves real estate investing, as demonstrated by the wave of fix & flip TV shows, the cult of celebrity real estate brokers, and the popularity of real estate apps like Zillow and Trulia which have reached an audience far broader than just people who are looking to purchase a home.
- Rise of the Retail Investor. Blackstone has demonstrated the tremendous buying power of retail investors who, until recently, were largely neglected by the private real estate investment industry. Today, Blackstone is raising upwards of $700 million a month from retail investors. Today’s retail investors are informed and love real estate investing. We predict a massive new audience of retail investors who actively invest in real estate as part of their portfolios.
- New tech hubs. Thanks to the rise of remote work and the skyrocketing costs of housing in places like Silicon Valley and New York City, new tech hubs will emerge where the startup ecosystem attracts talent and creates jobs. Places like Salt Lake City, Columbus and Birmingham, Alabama. Prices will rise in these cities as well paying jobs are created, and we will witness prices come to parity the way that Los Angeles and Boston prices have become almost equal with New York City prices.
- Climate change. Environmental sustainability is no longer a “nice to have.”
What is the secret to finding success at work and in life?
JY: I’m not sure it’s a secret, but having a strong, capable, diverse team—both at work and at home—to help you realize and work towards your vision, is imperative. Work and life will always be a grueling game of tug of war, and it’s impossible to do it all alone. It’s crucial to have people that support you and understand that priorities will shift depending on the time of year, or even the week, day, or hour, for that matter.
Personally, I think the idea of achieving an ideal “work-life balance” is a myth, but mostly because this balance will look different for everyone. If throwing yourself into work is your version of self-care, and it works for you, that’s great. If you need a digital detox every weekend to start Monday off on the right foot, again, that’s great. I’m not a believer of face time at work. So long as you communicate with your team (at home and work) effectively and get done what needs to get done, that’s all that matters.
Who do you turn to for advice? Is there any mentor whose lessons are still with you today?
JY: I have a few important mentors. My old bosses, the ones who spent years mentoring me, continue to be powerfully positive forces in my professional life. One of my biggest regrets is not turning to them sooner, since I have learned the life lesson that there are few people (other than your parents) who are rooting for your success as much as the generation of professionals who groomed you. Mentoring younger professionals is so gratifying and is one of my favorite things to do, so now that I’m in that position, I have a better understanding of how senior people really feel about their hires. It’s an almost parental bond and a genuine desire to support their future success.
My son Andrew, who is 9, loves my work and loves being involved in my work decisions. Honestly, I value his opinion more than most other people. His mind is not clouded by the minutiae of adulthood and he genuinely cares about the future of our company. Most importantly, I think a smart 9 year old has roughly the equivalent brainpower of a fully-formed distracted adult who is playing on his/her phone as he is walking down the street. So when he says something doesn’t make sense or doesn’t look good, I use his sharp mind as a proxy for a distracted adult. Plus, it’s so much fun to talk to him about my business, since he is watching the world unfold and learning about everything for the first time. He finds the most mundane things to be exciting because they are new to him. For example, he is obsessed with the signage in our office and wants to make it “Instagrammable” and is always showing me examples of other businesses that do a better job than we do at creating an Instagrammable workplace.
I’ve also assembled a pretty cool group of both formal and informal advisors who are my close personal female friends. Many of my girlfriends have attained pretty senior levels in big companies, and they are my closest friends so I count on them for advice on every topic from hiring to marketing to morale. They keep me sane and generously share their wisdom. Honestly, they are my superpower.
How do you juggle it all?
JY: My best life hack is that I wear sneakers. I wear comfortable shoes that I can walk in, think in, and travel to meetings in—every single day. Luckily for me, the sneaker trend is a fashion trend, and so it’s something I can embrace without being terribly unfashionable. But my best advice to young women who are just starting out: wear comfortable shoes so that you can make it to the meeting. If your footwear hobbles you to the point where you can’t show up, you will lose. You cannot go head-to-head with men if you can’t walk around.