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The Globe and Mail just published a piece called: How Morguard CEO Rai Sahi became Canada’s $2-billion real estate king. It’s a Globe Unlimited piece, so some of you may not be able to access the article.
But here’s a snippet that talks about the moment Sahi left his job at the Bank of Montreal and went out onto his own as an entrepreneur:
In 1981, Sahi spotted an opportunity: Advanced Extrusions Ltd., a small manufacturer of aerosol cans and toothpaste tubes based in Penetanguishene, Ontario. Along with several partners, he bought the business for $7 million. Quickly, Sahi and his partners kicked Advanced into high gear by installing a high-speed assembly line and taking advantage of the low Canadian dollar to boost exports to the United States. Revenues doubled, and CCL Industries Inc. bought the company in 1985 for a reported $22 million. He then used the proceeds from the Advanced sale as a launchpad to buy control of two transport companies, combined them, and sold them to Winnipeg-based Federal Industries for $70 million, much of it in shares.
The reason for this Globe article is no doubt because Sahi’s Glen Abbey golf course is in the news right now. He acquired the course by buying ClubLink when they were in a cash crunch and has since put forward plans to redevelop the land.
On Monday night, Oakville city council voted unanimously to seek a heritage designation for the course.
I don’t know much about golf courses, but I do think Sahi’s story is an inspiring one. Here is a guy who moved to Canada at the age of 24 and started out by selling insurance door to door. And today his net worth is estimated at $2 billion.
Full disclosure: I used to work at Morguard.
Photo by juan gomez on Unsplash
For those of you from Ottawa, I’m going to be in town this Thursday evening talking at an event put on by the National Capital Commission called Urbanism Online. It’s all about how blogging, social media, and online discussions can and are contributing to the betterment of cities.
The other bloggers include:
- Marc-André Carignan, Montreal, Kollectif.net
- Jillian Glover, Vancouver, This City Life
- Robert Smythe, Ottawa, UrbSite
The event is now full, but email them or tweet me if you’d really like to come and I’ll certainly ask about space availability. I’m sure it’s going to be a great discussion.
I have a bit of a soft spot for Ottawa. I used to spend a lot of time there when I was working on an office building at 150 Elgin Street. (Key tenants include The Canada Council for the Arts, KPMG, and Shopify.)
I haven’t been back since the building was completed, so I’m excited to see how it turned out.
Update: The event will also be streamed on Periscope, here.
Today I spent the day at the 11th Annual Land & Development Conference here in Toronto. I found it particularly good this year, but it’s now late, I’m tired, and I want to go watch game 6 of the NBA finals. So I think this is going to be a fairly short post.
Here’s a summary of some of my key takeaways from the day (a lot of it is Toronto-centric):
Increasingly, the commercial and residential sides of the real estate development business are converging. And it’s being largely driven by the focus on urban intensification and mixed-use.
This is leading to an “institutionalization” of the residential side, which has historically been the domain of smaller private/local companies and rich families.
Merger is creating complexity around asset valuations: Is it about the income (cap rates) and/or the future development potential?
Low rise house prices in Toronto continue to skyrocket. Supply is highly constrained. This has been the story for a number of years now.
High rise condo prices in Toronto continue to be more or less flat (modest increase). The industry is going to need to figure out how to work with and compliment the current surge in rental apartment development. There is an element of competition between the two asset classes.
According the RealNet’s new home price index, the spread between low-rise and high-rise housing in the Greater Toronto Area widened to $326,659 as of this past April (2015).
Rental Apartment Case Studies: Motion on Bay by Concert Properties (Bay and Dundas) was underwrote at $2.60-2.80 psf rents back in 2009. Rents are now in the $3 range. The Heathview by Morguard (Bathurst & St Clair) had $2.80-2.90 psf rents in its pro forma. It achieved and beat these numbers.
There’s a flood of Asian money coming into (1) Vancouver and then into (2) Toronto looking for development projects. There appears to be a lot of impatient and/or dumb capital out there. Challenge remains finding good development sites.
Vancouver is well ahead of Toronto in terms of transit oriented development. The initial intent in Ontario was to create a link between the greenbelt that surrounds Toronto + land use (intensification) + transit. But we haven’t been doing a good job of building transit and developing around it. This ties in nicely with a post I wrote called: The case for planning transit around minimum population densities.
I will end by saying that I found there to be greater transparency at today’s conference. There was a lot of talk about deal specifics and I don’t remember seeing this much detail at past conferences.
Maybe I just wasn’t paying attention closely enough before or maybe the industry is slowly becoming more transparent. I hope it’s the latter.
If you were there today and I missed something groundbreaking, please share it in the comments below!
The Globe and Mail just published a piece called: How Morguard CEO Rai Sahi became Canada’s $2-billion real estate king. It’s a Globe Unlimited piece, so some of you may not be able to access the article.
But here’s a snippet that talks about the moment Sahi left his job at the Bank of Montreal and went out onto his own as an entrepreneur:
In 1981, Sahi spotted an opportunity: Advanced Extrusions Ltd., a small manufacturer of aerosol cans and toothpaste tubes based in Penetanguishene, Ontario. Along with several partners, he bought the business for $7 million. Quickly, Sahi and his partners kicked Advanced into high gear by installing a high-speed assembly line and taking advantage of the low Canadian dollar to boost exports to the United States. Revenues doubled, and CCL Industries Inc. bought the company in 1985 for a reported $22 million. He then used the proceeds from the Advanced sale as a launchpad to buy control of two transport companies, combined them, and sold them to Winnipeg-based Federal Industries for $70 million, much of it in shares.
The reason for this Globe article is no doubt because Sahi’s Glen Abbey golf course is in the news right now. He acquired the course by buying ClubLink when they were in a cash crunch and has since put forward plans to redevelop the land.
On Monday night, Oakville city council voted unanimously to seek a heritage designation for the course.
I don’t know much about golf courses, but I do think Sahi’s story is an inspiring one. Here is a guy who moved to Canada at the age of 24 and started out by selling insurance door to door. And today his net worth is estimated at $2 billion.
Full disclosure: I used to work at Morguard.
Photo by juan gomez on Unsplash
For those of you from Ottawa, I’m going to be in town this Thursday evening talking at an event put on by the National Capital Commission called Urbanism Online. It’s all about how blogging, social media, and online discussions can and are contributing to the betterment of cities.
The other bloggers include:
- Marc-André Carignan, Montreal, Kollectif.net
- Jillian Glover, Vancouver, This City Life
- Robert Smythe, Ottawa, UrbSite
The event is now full, but email them or tweet me if you’d really like to come and I’ll certainly ask about space availability. I’m sure it’s going to be a great discussion.
I have a bit of a soft spot for Ottawa. I used to spend a lot of time there when I was working on an office building at 150 Elgin Street. (Key tenants include The Canada Council for the Arts, KPMG, and Shopify.)
I haven’t been back since the building was completed, so I’m excited to see how it turned out.
Update: The event will also be streamed on Periscope, here.
Today I spent the day at the 11th Annual Land & Development Conference here in Toronto. I found it particularly good this year, but it’s now late, I’m tired, and I want to go watch game 6 of the NBA finals. So I think this is going to be a fairly short post.
Here’s a summary of some of my key takeaways from the day (a lot of it is Toronto-centric):
Increasingly, the commercial and residential sides of the real estate development business are converging. And it’s being largely driven by the focus on urban intensification and mixed-use.
This is leading to an “institutionalization” of the residential side, which has historically been the domain of smaller private/local companies and rich families.
Merger is creating complexity around asset valuations: Is it about the income (cap rates) and/or the future development potential?
Low rise house prices in Toronto continue to skyrocket. Supply is highly constrained. This has been the story for a number of years now.
High rise condo prices in Toronto continue to be more or less flat (modest increase). The industry is going to need to figure out how to work with and compliment the current surge in rental apartment development. There is an element of competition between the two asset classes.
According the RealNet’s new home price index, the spread between low-rise and high-rise housing in the Greater Toronto Area widened to $326,659 as of this past April (2015).
Rental Apartment Case Studies: Motion on Bay by Concert Properties (Bay and Dundas) was underwrote at $2.60-2.80 psf rents back in 2009. Rents are now in the $3 range. The Heathview by Morguard (Bathurst & St Clair) had $2.80-2.90 psf rents in its pro forma. It achieved and beat these numbers.
There’s a flood of Asian money coming into (1) Vancouver and then into (2) Toronto looking for development projects. There appears to be a lot of impatient and/or dumb capital out there. Challenge remains finding good development sites.
Vancouver is well ahead of Toronto in terms of transit oriented development. The initial intent in Ontario was to create a link between the greenbelt that surrounds Toronto + land use (intensification) + transit. But we haven’t been doing a good job of building transit and developing around it. This ties in nicely with a post I wrote called: The case for planning transit around minimum population densities.
I will end by saying that I found there to be greater transparency at today’s conference. There was a lot of talk about deal specifics and I don’t remember seeing this much detail at past conferences.
Maybe I just wasn’t paying attention closely enough before or maybe the industry is slowly becoming more transparent. I hope it’s the latter.
If you were there today and I missed something groundbreaking, please share it in the comments below!
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