Five Questions for: Capital Square Chief Distribution Officer Drew Jackson

Drew Jackson

In AltsWire latest installment of “Five Questions for…” the editorial team interviewed Drew Jackson – chief distribution officer at Capital Square since April 2024 – on his leap from being on the adviser side of the industry with Concorde Holdings to moving to the sponsor side, and how this influences his approach to relationship-building and perspectives on achieving success.

Capital Square is a national real estate firm specializing in tax-advantaged real estate investments, including Delaware statutory trusts for Section 1031 exchanges, qualified opportunity zone funds for tax deferral and exclusion, and a real estate investment trust. In recent years, the company has become an active developer of mixed-use multifamily properties in the Southeastern United States with eight current projects with a total gross asset value of $730 million. Since 2012, Capital Square has completed more than $7.8 billion in transaction volume. 

AltsWire: You recently made the leap to the sponsor side of the industry with Capital Square after many years on the adviser side with Concorde. Why the change and how is the transition going?

Drew Jackson: First of all, I have so much respect for Concorde. I had so many great experiences during my time there, and I would not have had the opportunity with Capital Square if not for Concorde. I wish everyone there all the best, and I look forward to observing their continued success.

For me, though, I’ve always considered myself a student of this industry, and the chance to work with a leader like Capital Square was something I couldn’t pass up. Since starting my career in the mid-’90s, I’ve worked in a variety of capacities – from financial professional to product management leader to chief executive officer – but I’ve always been on the client-facing side. While I value that experience, I’ve always been very interested in the product side of the industry as well. This move allows me to leverage my existing knowledge from a new perspective – understanding the business from the sponsor’s side. It’s a new challenge I’m excited to tackle.

Growing up within and once again being a resident of the Richmond, Va., area, I’ve been able to witness firsthand Capital Square’s dedication to the region. They’re going beyond just raising money; they’re actively working to build something bigger than themselves. Their revitalization efforts in the Scott’s Addition neighborhood are a prime example, as demonstrated not only by Capital Square’s role in award-winning projects like “The Otis,” Co-Star’s “Multifamily Development of the Year” for Virginia in 2024, but also by the economic impact Capital Square enables, such as the 1,483 jobs created during the construction of the firm’s first five properties in the neighborhood as well as the projected $7.7 million in annual state and local tax revenue generated in the ongoing operations of these properties. Combine this across-the-board excellence and focus on collective responsibility with leaders actively lending their voices to real estate, opportunity zone and tax discussions on the national stage, and I’m very excited and very proud to join such an organization. The transition has been personally and professionally tremendous.

DIW: As an industry veteran with more than 25 years of experience, what is the biggest change you have seen in the industry?

DJ: The easy answer is technology. Undoubtedly, advances in innovation have revolutionized how we operate, streamlining processes and enhancing efficiencies.

Looking beyond that, however, investor preferences have also greatly evolved. Today’s investors are more engaged and discerning than in the past. They expect in-depth reporting, clear communication, and a constant flow of information. They have a greater ability to digest more information, and they want this information more rapidly than ever before. Obviously, technology plays a role in that, but many investors have simply raised their standards.

Ultimately, these changes are positive for everyone. We have higher benchmarks of what constitutes acceptable service and advisers are increasingly seen as trusted professionals, not just salespeople. Today, we’re expected to provide comprehensive solutions that truly address our clients’ financial needs. 

DIW: What are the biggest challenges facing investment sponsors today, and how are you/Capital Square working to overcome those challenges?

DJ: Investment sponsors face a few key challenges today. Economic headwinds, of course, present constant pressure. Additionally, the regulatory environment is undergoing significant shifts with new legislation and increased enforcement impacting everyone in the industry. We’re heavily influenced by what happens in Washington, particularly regarding tax codes and compliance. Unfortunately, no universal standard exists concerning regulation, and I believe that the shift toward the registered investment adviser model is partly driven by a perception of less stringent oversight by the SEC and state regulators, as compared to FINRA’s supervision of broker-dealers. Ultimately, this challenge hurts the client. It creates confusion for investors who receive different types of information, depending on the adviser model.

And with more institutional firms entering the space, it seems that regulators may be more attuned to these larger firms, with the investor getting lost in the shuffle. This hurts not only investors but the industry as a whole.

With my experience, I have friends on all sides, from sponsors to investment platforms to broker-dealers and RIAs. At the end of the day, clients aren’t concerned about a certain designation. They’re coming to us for sound investment advice that will help them achieve their financial goals. It’s up to all of us in the financial industry to provide them with the best products possible.

We do this by starting with the investor and working backward from there. How can we embrace the evolution in the design of programs? How do we improve and accelerate technology so investors can see their statements easily? By working toward investor-centric goals and providing best practices, we will gain better adoption in the market. This focus empowers everyone, and an investor-first approach is where Capital Square has always excelled.

Alternative investments are an incredibly powerful tools to help financial professionals meet the needs of their clients, and, ultimately, that is what our business is about. Whether preparing for retirement, college funding, or simply living the life they desire, our clients depend on us for solid financial planning. They want to know that they’re still on track, regardless of the current markets, and to have confidence that their adviser is looking out for their best interests. Understanding their needs is just as essential as chasing performance. Let’s move past the “performance treadmill” and focus on what truly matters: are we helping our clients achieve their financial dreams?

A related example is alts investments in real estate. The 1031 exchange market is still relatively young and holds massive potential. We’re barely scratching the surface when it comes to meeting investor needs in 1031 exchanges. To me, this highlights the importance of collaboration over competition. Instead of fighting for a slice of the existing pie, we must work together to expand the market. As we share best practices and foster collaboration, we will expand the pool of qualified professionals offering these solutions and broaden investor access. This collective effort will ultimately elevate us all.

DIW: When it comes to training and education, what is most important for investors and/or advisers, and how can they enhance their education?

DJ: To me, it comes down to proper due diligence. Too often, the focus seems to rest solely on the asset class and potential returns, but this doesn’t tell the whole story. What about the team behind the investment? Did the sponsor do their proper due diligence? Investors and advisers must go beyond surface-level assessments to grasp the intricacies of their investment choices.

As an industry, we must do more to equip financial professionals with the knowledge necessary to navigate the complexities of different offerings. Sales-oriented individuals may be great at pitching, but they also need the ability to analyze the product comprehensively. By instilling a deeper appreciation for the entire process and providing financial professionals with the ability to articulate this process to investors, we facilitate informed decisions arise that more expansively align with investor objectives.

Ultimately, top-tier financial professionals are not just trying to manage money. They are proactively seeking to address investor concerns, whether optimizing tax strategies or tailoring investment plans to meet specific financial goals. The focus should always remain on the investor and not just the current popular product.

DIW: What strategies are you employing to nurture and expand relationships throughout the independent broker-dealer and RIA channels? How does your experience on the other side of the fence influence these strategies?

DJ: Regardless of what side of the fence you’re on, everything begins and ends with relationships. It’s not just about transactions; it’s about fostering genuine connections and recognizing the privilege we have in collaborating with firms and individuals in this industry. As a person who has that experience on the client-facing side, I understand the difficulties of growing a financial business. A significant amount of time, energy, and resources are needed.

One of the firm’s primary goals is to cultivate partnerships that extend beyond simply providing products. We aim to be a valuable resource, offering insights into the latest developments within our specific areas of expertise, as well as the broader financial landscape. Overall, we want to equip our partners with the knowledge they need to thrive, and we work to facilitate the best outcomes for both clients and businesses alike.

At the core of this strategy is a commitment to excellence and transparency in our role as a sponsor. We understand the importance of clarity in our responsibilities and the need to consistently demonstrate reliability. This instills confidence in our partners and helps to foster enduring relationships grounded in mutual success.

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