Daily insights for city builders, delivered every morning at 6 AM ET. I’m Brandon Donnelly — a Toronto-based real estate developer and founder of Globizen. I’ve been writing here since 2013.

Tag: morguard

  • $2-billion real estate king

    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

  • Urbanism Online: #capital

    image

    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.

  • 11th Annual Land & Development Conference

    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.

    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!

  • Why I came back to TAS

    After I rejoined TAS, I was asked to write a blog post on why I came back. It went live this week on tasdesignbuild.com, and so here it is:

    After almost four years at Morguard Investments, I’ve made the move back to TAS. The first time I was here was in 2008, while I was still completing my master’s in architecture and real estate development at the University of Pennsylvania.

    I was then, as I am obviously now, a big supporter of TAS’s commitment to “Shaping Beautiful Cities™”; however, I decided to spend some time on the commercial and more institutional side of real estate. During that time I was fortunate enough to work under someone I consider to be one of the best in the business. She taught me a ton and I’m hugely grateful for that opportunity.

    So why did I make the switch? I did it for one simple reason: alignment.

    I love cities. That’s why I blog about them daily. I’m also a big believer in the power of design to make them more beautiful, livable, prosperous and environmentally sustainable. I see the vitality of our cities as the key to Canada’s overall economic competitiveness and I see this vitality as starting with each individual neighbourhood. Every building matters. As a trained architect, I don’t think I’ll ever be able to shake this belief. Real estate is, and will always be, something more to me than just bricks and mortar.

    So when I say alignment, I mean a shared sense of purpose. A belief that, as real estate developers, we have the opportunity (and responsibility) to shape cities and, hopefully, improve the way people live, work and play. It’s no easy task, but I think half the battle is knowing that we’re all in this business for the same reason.

    Over the past five years I’ve watched TAS evolve as an organization. From its roots in the custom home business to a company in transition, it has grown to become–in my humble, and now biased, opinion–one of the best builders in the city.

    TAS is now laser-focused on developing urban mixed-use buildings and is committed to doing so using its Four Pillars of Sustainability™. This means that everything TAS does is considered in terms of its impact on (1) the social fabric of communities, (2) the environment, (3) culture and (4) local economies.

    It’s an admirable ambition and it really resonated with me.

    I was born and raised in Toronto and I can say with all honesty that I care deeply about this city and its future. It pains me when I see buildings go up that clearly privilege economics over experience–not only because it makes for poor city building, but because I think it’s pretty clear that good design also pays (to put on my MBA hat for a second). So on a more basic level, I could also say that we’re aligned around one simple goal: To build really great urban buildings. It doesn’t need to be more complicated than that.

    But this distinction around urban buildings is an important one because I believe that our world is entering a decidedly urban era. In 1900, only 13% of the world’s population was urban. Today, 75% of the developed world’s population is urban and by 2025 that number is expected to rise to 84%. At the same time, cities all around the world are witnessing what author Alan Ehrenhalt calls “The Great Inversion.” Census figures show that there’s a growing preference for more compact and walkable communities – people are returning to city centres.

    Having said all this, I truly mean it when I say that I’m thrilled to be joining a team of ambitious people, passionate about cities and design. I’m honoured by the opportunity and I look forward to collectively working towards making Toronto an even greater city.

  • Performance Court at 150 Elgin rising against the Ottawa skyline.