Houses for sale in Ottawa

Apartment construction has taken off in most markets across Canada. John English of Tricon Capital joins us to discuss what it takes to develop large apartment buildings. In this episode:

 

  • Tricon’s position in the US and Canadian marketplace.
  • Tricon’s shift away from being a mezzanine lender.
  • The Selby – a 502 unit apartment development in downtown Toronto, currently 3 floors above grade.
  • 57 Spadina – a 329 unit, 36 floor zoned development site slated to begin construction in Q1 2018.
  • Summerill Lands – currently a retail property that is home to the “Five Thieves”, a group of high end food stores. John wants to “turn the 5 Thieves into 25 Thieves” with significant residential density above. This project is a 50% joint venture with Diamond Corp.
  • Increasing risk profile due to longer land entitlement.
  • Condo profit vs apartment recurring income stream.
  • Construction yields in a low cap rate environment.
  • Expected future rental rates.
  • Market research for an apartment development site.
  • Amenities in new apartment builds.
  • Old stock apartments battling new stock.
  • The benefits of renting.
  • Long term obsolescence prevention.
  • Parking ratios. John summarizes it “as little as possible but as much as needed” and “nothing is as dilutive as parking”.
  • Affordable units and making your proforma work.
  • Inclusionary zoning.
  • Negotiating with the city of Toronto.
  • Financing apartment construction.
  • Higher equity requirements for apartment construction.
  • Lease up periods and incentives.
  • Screening tenants.
  • The differences between developing in NYC vs Toronto.

In the news…..

Aaron talks about the new mortgage rules and their effect on commercial finance (hint: there isn’t any specific to commercial)

Adam discusses the Top Three Tweets from the  Real Estate Strategy and Leasing Conference.

 

 

A bit about our guest…

Mr. English was most recently employed by Oxford Properties as a Director of Development.  John worked on projects such as the $480 million redevelopment of Square One Shopping Centre and the development of the Eau Claire Tower in Calgary, a 600,000 SF class-A office tower.  Prior to Oxford Properties, Mr. English was at Halsall Associates as a Project Manager in the Building Science and Sustainable Building divisions, where he managed the certification of the second ever LEED Gold office building in Canada.  Mr. English holds an MBA from Columbia Business School, is a LEED Accredited Professional and Professional Engineer in Ontario.

LinkedIn

 

A bit about our guest’s company…..

Tricon is a principal investor and asset manager focused on the residential real estate industry in North America with approximately $3.1 billion (C$3.8 billion) of assets under management. We own or manage on behalf of third-party investors a portfolio of investments in land and homebuilding assets, single-family rental homes, manufactured housing communities, and multi-family development projects. Our business objective is to invest for investment income and capital appreciation through our Principal Investment business and to earn fee income through our Private Funds and Advisory business. Since its inception in 1988, Tricon has made investments in residential real estate valued at approximately $18 billion.





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