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Should You Buy and Hold or Buy and Flip – with Naram Mansour of Carlyle Communities

Podcast Featured Image 18

Naram is the president of Carlyle Communities and he is also a lecturer at Shulich School of Business. He teaches a real estate course there. Now, Naram is a very smart and interesting guy when it comes to real estate. We had a great conversation on the renting a consumer driven condo market.

Naram Mansour Interview Highlights

00:08 Who is Naram Mansour
1:24 Why I Invest in Real Estate
3:50 “Condo” & “Slum”
6:44 How Naram Got Into Real Estate
11:20 What First Attracted Naram to Real Estate
16:04 Naram’s First Deal with Beach Hill Condos
20:30 Is There a “Condo Bubble” in Toronto?
24:50 What Naram Has Done with Beach Hill
26:00 Believing in the Rental Market
27:48 Why Buy, Hold & Rent, Instead of Flip & Profit?
32:45 The Upcoming “Peter Street”
34:30 The Entertainment District
37:45 US Investors
40:00 Where People Want to Live
41:29 Retail in King West
42:57 A Consumer Driven Condo Market
45:37 How to Reach Naram Mansour
47:00 Leave a Review for the True Condos Podcast


Naram Mansour on Twitter

Carlyle Communities

Beach Hill Condos

“Condo slum” article

S&P Erases all gains of 2014” article

How to Leave a Review for The True Condos Podcast on iTunes

Naram Mansour Interview Transcript

Andrew la Fleur: Hello and welcome back to the True Condos Podcast. Once again, I’m your host, Andrew la Fleur. Thanks for listening. In today’s show, we’re going to be interviewing Naram Mansour. Naram is the president of Carlyle Communities and he is also a lecturer at Shulich School of Business. He teaches a real estate course there. Now, Naram is a very smart and interesting guy when it comes to real estate. We had a great conversation.

This podcast is going to be a little bit longer than usual, but I assure you that it’s going to be well worth your
time to listen in to hear what Naram has to say. It was funny. I was talking to Matthew Slutskyrecently and he was saying that Naram is one of the top minds, in his opinion, in the condo market today. He’s a young guy but he’s very sharp, very smart, and I think the future is very bright for him. Matthew Slutsky, of course, is the president of BuzzBuzzHome. You can listen to the interview with Matthew Slutsky. I think it was episode 2 if you go back and check the podcast records for that.

Now, I wanted to talk about a couple of interesting new stories that were in the headlines this week. I’ll include links to this in the show notes for this episode. You can head on over to, N-A-R-A-M. Naram, for the show notes for this episode. There’s one headline said the S&P 500 raises 2014 gains as 10-year yields fall below 2%.

Now, that article obviously is talking about how the stock markets are not doing very well. If you follow that at all, the stock markets are not doing very well right now. In fact, they seem to be in free fall. Some people are worrying about some kind of a stock market crash that could be happening. Now, when I see headlines like this, I just really keep going back to the reason why I invest in real estate in the first place.

The reason why I buy condos and the reason why I hold them in long term and rent them out … The stock market to me is just … it’s a gambler’s game. You’re just praying and hoping that things work out well. Things are going to go up. It’s an insider’s game. If you’re an insider, if you’re at the top, you can do well. Everyone else gets manipulated by the system and you’re lucky if your mutual funds or whatever make you 3, 4, 5%. Who knows if that’s even before or after all the fees that your manager is taking from you?

When it comes to condos, long term, any kind of real estate investing really … If you’re earning less than 10% annual returns in the long term with real estate, then you’re really doing something wrong. Ten percent long term real estate as an annual return is very easy to achieve. Again, you need to take the long term approach with real estate. Of course, real estate is not yet a rich, quick scheme. Condo investing is not something you should get into if you think you’re going to buy a condo and become a millionaire overnight. That’s not how it works. You should never think like that. You should understand that it is a long term, lifelong type of investment.

That was one article I thought was interesting. I’ll include a link to that. The other one was in the CBC. They had an article and the headline was Fears that Shoddy Condos Could Become Future Slum. Here’s a quick tip. If you see the word condo and slum in the same headline, you know that article is a joke. I’m sick and tired of this. I’ve seen the same headline and this type of thinking, and these types of quotes from the so-called experts so many times over the years. People talking about how certain condo neighborhoods or certain condo buildings are going to become slums in the future or some kind of a ghetto as the other buzzword.

When I see those buzzwords, I know right away that this article is nothing other than sensationalism. There’s no merit to them and they’re just looking to get clicks and links to their articles so that they can get advertiser dollars. It’s just total nonsense. The thought that somehow a privately owned condo building or a series of buildings would somehow become a ghetto or a slum. What do they expect? They expect for hundreds of people who own these condos worth hundreds of thousands of dollars each too. Suddenly, you just say, “You know what? My windows are leaky or my dishwasher is broken. I’m just going to abandon this property and just walk away from it.” Some squatters are going to take over and it’s going to become some kind of a slum or something ridiculous like this.

It’s total nonsense.

Sure. Condos age. Repairs need to be done. That’s what reserve funds are for. That’s what your condo fees are for. These buildings will be maintained. People will always want to live in these buildings. People will always pay rent and money to live in these buildings, and the values will never ever go to zero. It just makes absolutely no sense for this line of thinking. That’s enough ranting for me for one day. That’s just something that really gets under my skin when I see those kind of headlines. It’s just sensationalism.
The other thing that came out this week, I won’t touch on it too much but the Urban Nation released their third quarter rental statistics report. Basically, the summary is rents are up. Good for you if you are a condo investor or if you bought in the past. Your rents continue to increase and that’s good news for condo investors.

All right, so let’s get to the interview with Naram Mansour. Once again, for all the show notes on this episode, head on over to Here we go. Great. It’s my pleasure to welcome to the show Naram Mansour. Naram is the president of Carlyle Communities. Naram, welcome to the show.

Naram Mansour: Thanks for having me.

Andrew la Fleur: Great. I appreciate your time and I appreciate you’re willing to share some of your insights on the market, and a little bit about your story with us today.

Naram Mansour: Anytime.

Andrew la Fleur: Why don’t you start Naram by telling us a little bit about yourself, your story? How did you get into real estate? What are you up to right now?

Naram Mansour: Sure. Real estate for me was actually a very organic process, if I could put it that way, which is I quickly discovered while I was on my undergrad that I wanted to get into real estate. At that time, I didn’t fully understand what aspect of real estate I’d get into, but I was in business school. There’s really only one real estate course. There’s a real estate finance course. It was taught at the time by an individual who would eventually become my partner in my business. He’s a very successful developer.

Eventually, what I did was I just had him mentor me through the process. I graduated undergrad, got into development lending. I actually worked at MCAP Financial in their development lending group for about 5 years. Then throughout that time we had a couple of real estate cycles hit. It’s always an interesting time to be at the bottom of the totem pole. I had a real estate lending company, and then be the guy that’s on the outside looking in, figuring out what you’re going to do. One thing that I had always knew was that you buy low and sell high in a sense.

In ’09, I took on my first endeavor which is I built 2 custom homes in the Royal York and Queensway area. The plan was always slow and steady which is a firm belief of mine in real estate. I wanted to do 2 customs and then maybe a few townhomes, and then just grow it. We ran into this opportunity at the corner of Gerrard and Woodbine, a project that had good merit but poor execution, in my opinion. I got into a partnership with another group and we went on to acquire the site that we eventually launched as Beech Hill Condos.

In between that time frame, I actually did my MBA. I went back at MBA in real estate development. I feel like I’ve never left the school with respect … Because I went back to Shulich. The Shulich School of Business has an incredible reputation for the real estate program. They’re very proactive in the industry and they’re followed. I went back to my MBA while I was building my customs then went on to acquire Beech Hill, and at the same time was invited back actually to lecture at the business school in real estate finance. The course that got me into this business was the one that I ended up actually being offered to teach.

I took that opportunity and I’ve been doing that now for about 3, 4 years, which has been an incredible experience just to see the way you mentor and teach students in this industry. They keep you very sharp. Then Beech Hill happened. We went through the process, and since then we’ve acquired a townhouse project in Mississisauga here on Ontario on the QEW. That’s going through … It’s rezoning now. More recently, our first acquisition of a larger land assembly was completed on Peter Street just south of Richmond Street West.

It’s been a whirlwind 8, 9 years if you want to call it that, but it’s been exciting. The one thing I always refer back to and I’ll leave it at that in terms of my experience and how I got into business was … a lot of people always have difficulty understanding what they want to do in life. For me, it was clear at the age of 21 that this was the business I wanted to be in forever. It’s a passion. It’s not just the business. It’s not just the job. It’s truly a passion for me to be in this business and I love doing it everyday. That’s my 2 cents about why I’m in real estate.

Andrew la Fleur: That’s great. Take us back if you will to that moment. Like you said that when you’re 21 years of age, you’re in that university course. What was it about real estate that attracted you in the first place? Describe that light bulb moment where you were like, “Wow, this is want I want to do?”

Naram Mansour: For me and for any business majors out there, I’m sure they can echo. Truly, business majors are typically contemplating 3 fields. They are their accounting, finance and marketing. Typically speaking, I don’t want to generalize it, but that’s the way it works. For me, there wasn’t anything particularly unique. Finance was a very attractive field at the time. We were pre ’09. People are making a lot of money doing creative and sometimes not smart things, but people were doing well. Accounting, in a sense, was the conservative job, the always guaranteed job and marketing was the creative, right?

None of those industries really presented 2 things that I found very attractive. One was the ability to shape whatever it is you’re doing. What I mean by that is few industries are in real estate where I get to shape a city with the opportunities that I choose. It’s a blessing in a sense that you’re even allowed that opportunity and I take it very seriously when we make our decisions. At the same time, at the end of the day, a profit driven business.

As a business major, you always push in that direction to understand how to maximize profit. What stood out to me was you have this incredible big money industry. You get to also shape your city and shape wherever it is you’re working on in a way that will last generations and lifetimes. It’s so obvious. It was so obvious and so easy for me to realize that unlike these other industries … I use them everyday so I got nothing against them. I wasn’t just moving paper. I was building bricks and mortar. I was creating housing. I shaped lives in the sense and how could you ever turn down that kind of opportunity all while being able to do it and make a living out of it? It was very easy for me.

Andrew la Fleur: What I find in talking a lot of different people in the industry is so many people who are successful at real estate … part of their success, I think, is because they come from a real estate family or they come from a real estate background. Was that your experience as well or did you just discover real estate in that university course you’re describing?

Naram Mansour: I had generally liked real estate but my family is not a real estate family. Both my parents are actually educators. They both have their doctorates similar to most immigrants. Unfortunately, they weren’t recognized when they came here. My father just got a job to be able to feed his family and then eventually got into petroleum retail. We weren’t a building family. I didn’t go to construction sites when I was 6 as often you hear those stories.

For me, it was just a very exciting business that I was always attracted but never had guidance. Once I got the guidance, I like to think that I can remember easily. Maybe one of my strengths is that I have a great memory for things I’m interested in. When I took that course and I would hear stories, and I would read books on, well, Trump might be a bad example, but the Reichmann family and the rise and fall of Olympia and York; and just generally reading about guys like Jorge Perez of the Related Group down in Miami.

I always saw real estate as an industry that … there were barriers in terms of capital. You always have the barriers in terms of potentially development sites and stuff like that, but work ethic simply allowed you to do it. If you work hard enough, I never got discouraged in real estate. I never thought that just because there’s all these companies all doing all this I couldn’t take on a part of it. For me, it was really York … That’s why I come back to saying it was organic. It just progressed with my curiosity more than anything else, and that’s what it was.

Andrew la Fleur: Tell us about that first deal that you did, at least your first major deal with Beech Hill Residences. You did a couple of low-rise homes as you mentioned, then you had this opportunity with Beech Hill. What kind of risks did you take on when you did that? What kind of things were people telling you at the time? Were they telling you you’re crazy to do something like this? What opportunity did you see there? It’s still in progress, but how has it worked out for you so far?

Naram Mansour: As I mentioned previously, the intention was to never go 2 64 mid rise condo. Really, my intention was always to go from two to maybe 10 townhomes or things of that nature. It was a natural progression for me. Stick frame is what I knew. I had a lot of experience on the lending side, having seen deals when I was at MCAP and a quick shoutout to those guys because they do everything: Condos, townhouses, low rise, high rise type of thing.

It was what I thought would be my natural progression, but then what happened was I was approached with a site and the site had its complexities to it with respect to the fact that it was an approved site. What we saw was an opportunity where we assured our density, but it was messy. The property owners had taken it through the rezoning, but they weren’t active developers. They weren’t really aware of what the market was looking for. What you had was a 7-storey building, 29 units, all over a thousand square feet. It was 3 levels of underground parking, 33 spots. Very inefficient design.

What we saw was an opportunity to take advantage of an overlooked neighborhood. It’s very obvious how hot the Beach and Upper Beaches, and the Danforth are with respect to … On the Danforth, you’re on the subway line. In the Beach, you’re on one of the most exclusive neighborhoods in the city in our opinion. You had this kind of sweet spot where we thought values per se hadn’t moved in the direction that they should. We had somewhat confirmed density with respect to height amassing.

What we did or what I did is I approached the city. I approached the planning solicitor on the [inaudible 00:18:36] and I said, “Look. I like the site, but I don’t think it works as is and I need to know if I can change it.” By change it, I meant change the interior aspects of this building. Luckily, the city was also very eager to see this intersection. I don’t want to say revitalized but improved.
What happened was a mutual approach to this development. At the same time, we had set up a very unique acquisition structure for the property and all of the pieces fell into place. That’s really what happened with Beech Hill. I was very excited when that deal came about. Naturally, it was my first foray into full-time commercial development.

Right away, I partnered who I thought and I still think is probably one of the best architects, but probably, for sure, maybe the best mid rise architect in the city with Raw Design and [inaudible 00:19:39].
Right away, he showed his skills and his design, and his understanding of unit layouts and efficiency, and all that stuff. It progressed very well and that’s how Beech Hill came about. From there, we went through the sales campaign. We had our tough time because we did go through 2013 which was probably one of our slower sale cycles.

Now, we’re under construction. It’s very exciting from that perspective and we’re hoping to be done within the next 12-18 months or less. Since then, we’ve moved on and looked for more opportunities or I’ve looked on to move for more opportunities and it’s been great.

Andrew la Fleur: What’s your take on the condo market right now? Everybody has an opinion. The question you probably got asked a lot, “Is there a condo bubble?” What’s your take on the current state of the market and what would you say to the individual investor who was looking at the market and looking for opportunities?

Naram Mansour: The one thing that I did want to mention going back to Beech Hill quickly is I’m invested in every project I do. Real estate development is a product type that lends itself well to investors, but at the end of the day, personally, from a capital perspective, I’m always invested in every project that I do. Leading from there, what I would say is I’m a firm believer in real estate as an investment product type if someone is looking at it that way.

When I lecture, I always remind my students that, first and foremost, residential real estate to be more specific, is housing. What I mean by that is before you think of buying 3 condos, buy a house or buy a home, somewhere that you can live for the next 5 years of your life and not somewhere for the next 18 months because you might be upset about what happens in 18 months from there because I never sit there and tell everyone their assured returns within 18 months. That’s not the way you should look at housing because you need a place to live.

Truly, I believe for the majority of the population, housing is a great way to build equity over the long term. You build it by paying down your mortgage and you may get nominal capital appreciation over a period of time. There are instances in the cycle where you get above average appreciation in housing, but that’s not something you should rely on.

Going back to the investor, I think the way … if you took that same fundamental principle which is you’re buying real estate for the long term, I think you’re safe and I wouldn’t sit there and run numbers on 10% a year over your growth in housing values. I will sit there and say, “Okay. What are my rents and what is my yield based on these rents? Where do I see growth in rents?”

Really, you’re looking at it like any other commercial property would. Anybody looking to buy a commercial plaza is doing the same thing. What am I buying in terms of yield? Where are my rents going? You’re always cognizant of things like interest rate, monetary policy, things of that nature that can affect your position. However, if you consistently look at real estate as a long term investment opportunity, I think you’re okay. Quite honestly, I actually support it. The one thing that the real estate typically lacks as opposed to equities is liquidity, and that’s often the argument that you’ll hear from everyone, is, okay. Well, you don’t have liquidity. You don’t have liquidity.

Well, I’ll tell you. If you’re not worried about selling your real estate overnight, you’re going to be perfectly fine. The common mistake in real estate or in condo investing is that everyone wants to compare it to equities. Well, you can never do that. For one thing it is a liquid asset type. Everything when it’s down it’s down. I mean the equity market when they go down do you want to sell when you’ve just lost your money? That doesn’t make any sense to me at all.

What I’ve noticed as a developer consistently looking for real estate in this city is that you have a ton of people that have many businesses throughout the country, province, overseas that own real estate and have no real reliance to their income to that. I’ll assure you, if you ask any of them, the one thing they’ll tell you is they regret not buying more because they just didn’t have a reliance on the real estate being the predominant source of income. When you don’t you’re in a very safe place.

Andrew la Fleur: Talk to us about the rental market and your position with … You’ve done something unique with Beech Hill. Talk to us about what you see in the rental market and tell us what you’ve done with Beech Hill.

Naram Mansour: With Beech Hill we encountered definitely some sales obstacles. What we quickly realized with that project was this was an incredible rental opportunity. What I mean by that is we’re not building a 1980s rental building, that’s not what we’re doing. We’re building a condo quality modern architecture design building and we’re holding majority of the units in a sense that we intend to rent out. The reason why we do that is we just think that there is great upside in rents and with that project in particular we think there is really a very low supply aspect in that neighborhood. There’s maybe 3 or 4 new projects along Woodbine that are true condo projects that would compare to us. That neighborhood actually there’s good strong demand.

In general in our city we’re running 1.5% vacancy. You’ll hear numbers thrown anywhere but it’s never over 2. I have partners that do a lot of business in the US. We would talk about oversupply in a market of 2% vacancy which boggles my mind but blows them away because in –

Andrew la Fleur: It blows your partners away who are looking at US markets.

Naram Mansour: That’s right. When we’re looking at US deals because in the US if your vacancy is 6% that means build and build fast whereas here we’re nervous. It’s great. I love being the conservative Canadian it’s fantastic. At the same time I think sometimes people overlook the trends in our market because they’re so afraid. For us, we are very strong believers in the rental market. Similar to you we think there’s great upside on downtown rents.

We’re actually in the market to build purpose built rental buildings of condo quality of course. We would love to be in that business and build more of it.
There’s financial constraints when you’re looking at those types of opportunities with respect to development of rental buildings. With aspects such as demand and things of that nature and rents and justification of what rents you can achieve, I think we’re all very conservative in our estimates and I think there’s great opportunity there.

Andrew la Fleur: As a condo developer, you’re putting your money where your mouth is obviously on everything you said. You’re a long term investor, you take a long term approach, you’re not looking to flip properties, you’re looking to buy and hold essentially buy taking this approach of building purpose-built rental buildings. Why do that as opposed to getting your money quick and building a condo, selling it out, getting your money and moving on? Why is it better in your opinion as a developer to buy and hold the rental properties than to acquire land, sell condos and get out?

Naram Mansour: I don’t know if you’ve kind of just put it on a platter for me. With respect to being long term in nature, we believe in real estate and we believe in Toronto. By we I mean myself and my partners. You’re talking to a group that has the opportunity to do deals in the United States at any given time.
Would I say that we’re as strict [inaudible 00:28:51]? No. We look at doing deals everywhere. However, we think, and if you break it down at the basics and this all kind of comes back to the class I lecture. There’s strong immigration demand. Immigration if you look –

Andrew la Fleur: This is the part where you’re telling us what makes Toronto unique versus other markets?

Naram Mansour: That’s right. There’s strong population growth and it’s important for people to move away from just that number that you hear consistently which is 100,000, there’s 100,000 people. Take a look at the quality of the immigrant that’s coming in. Maybe I’m not putting that correctly per se but what I mean is 20 years ago when you’re looking at immigration statistics it was individuals coming from Europe that were looking to get a job. That’s because that’s what they had to do.

What you’re finding now is the immigrants that are coming into our city are wealthy individuals. Two things that occur when that happens, one, they’re not necessarily looking to steal jobs from our job pool which I think is a good thing. At the same time, they’re also coming from countries where historically they just firmly believe that real estate is where they put their money in.

Andrew la Fleur: Yeah, absolutely, yeah.

Naram Mansour: For one thing a lot of those countries don’t even have stock markets because they don’t permit them or whatever the case may be.

Andrew la Fleur: There’s so much corruption.
Naram Mansour: So much corruption and so at the end of the day they believe in housing. The other thing that they believe in obviously is condos because that’s what they’ve lived in whereas –

Andrew la Fleur: Apartment living.

Naram Mansour: Apartment living, exactly, whereas we’ve always struggled with that idea. I get it. The North American dream isn’t a box in the sky per se it’s a white picket fence and a backyard. The dream for a lot of these people is secure safe investment. You’re coming to a country with great laws, stability, I mean forget the United States, Canada is the most conservative place in the world arguably. When you have that for us it’s just a great sign of where you want to be as a long term real estate investor.
I’m not going to sit here and tell you we’re not going to do more condo deals. Of course we are. Some sites just lend themselves better to being condo than rental. What I will tell you is whereas maybe a year ago I would have thought 3 out of every 4 deals I would have seen are condo deals. I’m at 50-50 now where sites that would have been 100% condo to me a year ago rents have more and more justified it. For me as a developer, it’s actually less risky to build purpose-built rental in a sense because I’m not relying on sales.
I’m building housing and at the end of the day as long as vacancies don’t creep up and we keep a close eye on supply which we do.

Andrew la Fleur: And your costs.

Naram Mansour: Costs, of course, but for us supply is a big thing. If you go back in history, 1990 and before, you always look at it and it’s always supply, it is supply. Everybody talks of supply and they should because when you overbuild, and even when we look at the US markets that we look at, when you overbuild you run into a problem, you do. As long as supply stays in check and vacancies aren’t going to creep up to 10, 12% on us we’re very, very comfortable building housing in one of the greatest cities in the world.

Andrew la Fleur: Talk to us about your Peter Street site that you have coming up. What can you tell us about that? It’s in the early stages but what can you tell us about that? What can condo investors expect coming up from you from that site?

Naram Mansour: Peter Street is very early. It was brought out in an announcement we made with our partner on that project which is Fortress Real Developments. The first of a number of properties that will close that will give us essentially the southwest corner of Peter and Richmond was a former site that was referred to as Langston Hall 2. That parcel is now one of our parcels. From there we’ll go on to acquire at least 2 more potentially as much as 4 more parcels

Andrew la Fleur: Is this the first time that that information has been made known?

Naram Mansour: It is.

Andrew la Fleur: Okay, you heard it here first. The Langston Hall 2 site which has received quite a bit of press within the real estate industry over the past couple of years you’ve acquired the first parcel but you’re telling us the news is you’re actually working on acquiring other parcels adjacent to it. It’s going to be something I guess pretty special.

Naram Mansour: Yeah, and it’s going to be very special for me for sure. Listen, it’s one of those things where when you talk about putting your money where your mouth is, I live in the neighborhood. My office is a stone’s throw away from there. Every aspect of this neighborhood is what I preach everyday to everybody with respect to real estate.

Andrew la Fleur: Talk to us about the neighborhood then because there’s a lot of buildings going up in the area. There’s been a lot of activity there. We’re talking about the Entertainment District for anyone who’s not familiar with when we say Peter and Richmond, right in the heart of the Entertainment District, King & Spadina area, east of there, west of the Financial Corp, the fashion district, this kind of area. Are you concerned that there a lot of other competing buildings? There’s a lot of product coming online in the area. You said yourself your office is here. You’re very invested personally in the area so what’s your take on it?

Naram Mansour: For us it’s a natural concern for sure. The Entertainment District between ‘09 and 2011 quickly became the most dense neighborhood in the city of Toronto. What I mean by most dense is I mean there’s no other submarket that had more launches in that time period than the Entertainment District. Let’s be a little bit more specific, I typically refer to the Entertainment District as Front to Queen, Spadina to [inaudible 00:35:37] give or take. That’s what the Entertainment District is to me.

Am I concerned about the Entertainment District? I’ll tell you I was. I say I was because I currently live at 21 Widmer Street which is the Cinema Tower. I got into that building very early on still in it’s occupancy phase. I closely monitored the transactions in that building predominantly leasing transactions. I’ll tell you a building that had an excess of 100 units available and the realtors out there can probably confirm these numbers for me give or take, I know there’s a lot of Kijiji and Craigslist Listings that technically don’t make it to MLS system and so it’s hard to track them.

What I saw was a giant project get leased up within 90 days. That was remarkable. It was just –

Andrew la Fleur: Yeah, a lot of the real estate bears people predicting this condo bubble and all this nonsense they looked at that building and they saw, wow, there’s over 100 units available for lease here. This is a sign that the bubble is about to burst. Look at all these investors buying. They’re all just going to undercut each other and it’s just going to be a disaster. That didn’t happen. In fact, an entire building like you say, incredible.

US markets when they hear stories like this in Toronto, hundreds of units leasing out in 90 days or less, it’s incredible.

Naram Mansour: Well, I’ll tell you and outside of just giving you this tidbit of information, there are US large investors looking to invest in purpose-built rental in the city of Toronto because they are firm believers in the rental growth and firm believers in population and in our vacancy. If that doesn’t tell you something –

Andrew la Fleur: They see our vacancy rate and they appreciate it more for what it is than we do I guess.

Naram Mansour: They completely appreciate it for more than we do. They think that … US investors in general are a lot more bullish than we are. They look at us and sometimes honestly they giggle. It’s like you have this incredible opportunity and really no one is taking advantage of it which is good. I think the reason why we don’t look like the US is because we … You’ll find that developers here in Toronto are actually very –

Andrew la Fleur: Conservative?

Naram Mansour: Really astute in the sense that they’re not going to force it. Relative to our other industries we may be looked at as an aggressive industry for sure but generally speaking our developers are well capitalized individuals that have gone through incredible runs in the real estate market and made a lot of money. They’ll sit tight if need be. They’re not going to force launches onto the market unless they think the time is right.
With talking with the entertainment district if you notice it’s a great example of the point I just made. It went through an incredible run of launches and then everything stopped. There are other developers in this neighborhood that have sites. They just purposely chose not to launch them. There’s a reason why. They also wanted to see how quickly a Cinema Tower would get leased up.

There’s a lot of noise and noise might be looked at as negative, but there’s a lot of activity happening in the Entertainment District. There’s the Mirvish/Gehry Project that everybody is still trying to figure out exactly how that’s going to shake out. There’s recently the acquisition of King Blue by Greenland. I think we’re slowly starting to see what their intentions are and how they plan to take that through.
Outside of the 2 projects I just named there really hasn’t been much activity since then. We’ve gone out of our way to closely analyze it and we’re fairly confident in that. With that being said I think the Entertainment District is a neighborhood that to some extent requires value when condo investors are looking at it and that is on the development community to recognize.

Outside of that let’s look at it as it’s most basic angle which is you’re in one of the most bustling neighborhoods in the city of Toronto. Your whole 8 minutes into the core from a walk. You can walk to the Sky Dome. You could walk to the ECC. You’re next to transit. You essentially have one of the most … The best retail strips along Queen Street West from University to Spadina. That’s improving even as you go west of Spadina now.
At the end of the day sometimes we get carried away as people in this industry but just look at where people want to live and simply put, I truly believe this is where people want to live.

Andrew la Fleur: They want to live there. The demand is there. Like you said, Cinema Tower leasing out like that just one example that the demand to live in the area is huge, is massive. People really enjoy this area and really like to be there. The area is just going to get better and better when all these buildings are completed in the next few years. You’re going to have a huge infusion of new retail.
Obviously density goes way up. You get way more bodies and people on the street. Retailers, restaurants, everything will follow that as well. You mentioned Queen Street and just how prime of a retail strip it is. We all know King Street is slowly turning into that as well. It’s being a major retail corridor. Yeah, there’s so much going on for it.

Naram Mansour: The demand for retailers to be in this area of the city right now is beyond belief. We’re involved with some retail developments as well and I could tell you you could almost name your price as a landlord in this neighborhood. Queen Street West when I was doing my presentation with Fortress they’re lease rates are a nexus of $100 a foot. Their values are a nexus of $1000 a foot. That’s remarkable. That’s typically Yorkville rents.

Andrew la Fleur: Bloor Street.

Naram Mansour: Bloor Street. That is a testament to really what consumers are doing because retailers will follow the consumer. The consumers want to be here. If they want to be here retailers want to be here. It’s really just a cycle effect.

Listen, I am a firm believer that density is a great thing. Obviously, I’m a developer so that goes hand in hand. What I mean by that is I think once the Entertainment District is built out to some extent and you just got to walk around and see how many projects are under construction, I think it’s where almost everyone is going to want to live.
At the end of the day when you have that kind of livelihood especially with the millennial generation and but even honestly with empty nesters wanting to recapture that excitement it’s easy to see why people want to be there. That’s why we made the investment. That’s why we made the investment. It was a long process to get there for sure.

Andrew la Fleur: One last question for you Naram. Is there a question that no one has asked you about yourself or about your business or about the real estate market but that you wish that someone would ask you and what would that be?

Naram Mansour: That’s a good question. It’s a good question because it makes me think in terms of what I’ve always been asked. Often people ask about my process into this business because I’m typically considered a younger individual in our business for sure. I think the one thing that people typically don’t ask which is to me would be a logical question per se is what is your long term intentions in this business because I’m young and I have a lot of time ahead of me.

I think I want to go back to one aspect and you and I were discussing this earlier on which is the real estate market especially housing is a market where I truly believe it’s consumer driven. I think as much I’d like to say, “Yeah, I’d love to build a business and that business would do 10 projects a year” or whatever the case may be I really pay attention to what people are telling me. I take that with every ounce of attention that I can give it. I think that’s where if you ask me what my intentions are I’d say whatever the market tells me my intentions should be.
It’s a business that –

Andrew la Fleur: Good answer.

Naram Mansour: Yeah, thanks, thanks.

Andrew la Fleur: I like that.

Naram Mansour: We’re firm believers of it. I could tell you stories forever about guys that thought they were smarter than the market. It’s the same thing. Look at the stock market for example. If you think you’re smarter than the market then your name should be Warren Buffet because there’s really nobody else. There’s other guys that have done well at it but it’s the same thing in real estate. Sometimes our community gets, the development community gets carried away in thinking that they know better and that’s not the reality. You don’t know better. The people that are going to live and buy your product are the people that know better.
For me my intentions are that I hope that this industry gives me a long life for it and I’d love to be able to grow it and take our knowledge base and move it into other cities and that would be fantastic. That’s all I could ask for. That’s for sure.

Andrew la Fleur: That’s great. Well, thank you very much for your time today, Naram. If people want to get a hold of you or if you want to let people get a hold of you, where can people find you online?

Naram Mansour: I definitely try to be active on Twitter for sure so @NaramMansour where we’re also active through Carlisle, so @CarlisleDevelop. You can hit me up there. I’m of the social media generation so you can hit me up on LinkedIn. You can hit me up on Twitter. Always feel free to send me a note into Carlisle. You can hit me up at as well if you have any questions. I try and actually answer most of those emails personally especially if they’re addressed to me. So if you address them to me it will be. I welcome it for sure.

Andrew la Fleur: That’s great. We’ll include a link to all those spots that you just mentioned in the show notes for this episode. Once again, thank you Naram for being on the show today and hopefully we can have you on the show soon.
Naram Mansour: Look forward to it.

Andrew la Fleur: Okay, there you have it my interview with Naram Monsour. I hope you enjoyed that. Thanks again for listening. If you like the show, I know a lot of you do because I’ve seen the numbers. My marketing manager just sent me the stats recently. Every month we are growing the number of downloads and listens are getting larger and larger. Thank you very much for your support for listening in. Thanks for telling your friends and colleagues and people about this show.

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