Designing the Perfect Student Rental Condo with Shamez Virani of CentreCourt Developments

Shamez Virani is Vice President at CentreCourt Developments. CentreCourt projects are known to sell out very quickly because they have prime locations in the core and their buildings are designed with the needs of the investor in mind. Their latest project launching in June 2015 is Grid Condos at Jarvis and Dundas and is expected to sell out in record time.

Shamez Virani Interview Transcript

Welcome to the True Condos Podcast with Andrew La Fleur, the place to get the truth on the Toronto condo market and condo investing in Toronto.

Andrew: Okay, it’s my pleasure to welcome to the show Shamez Virani. Shamez is the Vice-President at CentreCourt Developments. Shamez, welcome to the show.

Shamez: Thank you, Andrew. Thank you for having me.

Andrew: Shamez, why don’t we start, you can tell everybody a little bit about yourself, what’s your background and how you got started in real estate.

Shamez: Sure, so my upbringing in real estate really started as a child where I think I got nurtured into having a passion for real estate. Growing up in Calgary, Alberta which is where I was born and raised, my family immigrated from East Africa in the mid-70s and I grew up in a family where we didn’t have a lot, but my parents were smart with their money and saved as much as they could working pretty much minimum wage jobs. Ultimately, after a number of years of savings we were able to buy an investment property which at the time, I think, was no more than 40 or $50,000 all in.

I remember as a child going with my dad to mow the lawn and shovel the sidewalk and pick up the rent checks every month and I have that vivid memory in my mind and that carried with me through my entire childhood and into my university years. What I knew going into university I wanted to focus on business as an area. As I went through the business school process I realized that real estate was really where my passion and my interests lie, but unfortunately there’s not a lot of direct recruiting from universities and business schools into the real estate world.

I took a path into investment banking and finance after I graduated from Western University and did a few years in a rotation investment banking at a large U.S. investment bank. After a couple of years in investment banking I realized that I really wanted to follow my passion, my calling and what I thought I was most interested in which was real estate development. I joined my family business in 2007 in Calgary which is now a mid-sized multifamily apartment portfolio, owner/property manager. For those that are familiar with Calgary in 2007 they would know that was about the worst possible time they could have made that …

Andrew: Right.

Shamez: Before they made that jump. Actually going through a difficult period for a couple of years in Calgary was really informative to my entire focus and evaluation of real estate as an investment strategy created, I think, a lot of conservative outlooks and worrying about the downside and letting the upside protect itself. I joke about how it was a bad time to come in, but I actually think it was a blessing in disguise to come into a challenged environment. After a couple of years at it in Calgary and the market effectively shutting down I realized that there wasn’t a long-term play in staying in Calgary and staying in the development market because it shut down for … Ultimately, it was about four years until things started to pick up a couple of years ago.

In that period of time I decided it would be a good time to go get my MBA, so I moved to New York and went to Columbia Business School and did the MBA with a focus on real estate development. That was a really interesting experience to be in New York City, first of all the real estate capital of the world, to be at a school that had a focus program on real estate and a lot of likeminded individuals around me. What I realized there was that my passion really lie in development specifically.

There’s many areas that one can get involved in real estate, but development, the act of creating, the act of going through everything from site acquisition to turning the key over at the end was really what interested me and excited me in real estate. Knowing that and knowing that I had a good group of friends and an amazing opportunity to look at Toronto as a market to focus on, specifically because when I graduated from Columbia in late 2010, the New York market, the U.S. market was still in a pretty difficult environment, but Toronto was having a great, great, great year and subsequently had a number of great years following that.

How I got in touch with Andrew Hoffman here at CentreCourt is actually a funny story. A friend of mine who worked in the industry in Toronto works for a large capital provider. I gave him my wish list of what I would like to find in an ideal scenario being in a company and that wish list was I wanted to work with somebody who I thought was incredibly bright. I wanted to work in an environment that was a small environment, so it would give me lots of upward mobility opportunities. I didn’t want to work in a family-oriented real estate development company which for those that don’t know a lot of the development companies in the city are family-oriented because for obvious reasons you can’t compete with family members. I wanted to go somewhere that had access to institutional capital and could do big, large, interesting deals. That was my wish list and …

Andrew: That’s it, that’s all.

Shamez: Yeah, just a small, few items and as I gave him that list he said good luck. I know everybody in the city, but that list is very specific. That being said I know this gentleman, Andrew Hoffman, who recently left Menkes and

Andrew was the COO for Menkes and was at Menkes for 20 plus years and he said he’s recently left and I know he’s got some really good capital partners and really good development experience. Here’s his email address, why don’t you reach out? I sent Andrew a cold, blank email and just said … it wasn’t blank, I put something in it, but I sent him an email that said something to the effect of you know I’m going to be in Toronto in the next couple of weeks, I would love to introduce myself and learn about what you guys are doing at CentreCourt.

Fortunately enough I don’t know why he did this, but he responded and gave me a slot of his time and as they say the rest is history. I had a really, really positive first meeting with him and actually at the time he wasn’t looking to hire. At the time this would have been early 2011 just before we launched Peter Street Condos. He was just gearing up to launch that project. I think there was one employee in the company and I met him after he had just hired that employee. I said to him listen, I think I’m going to add a lot of value. I think I can be a great long-term partner in this business and help you grow it, just find a spot for me. I don’t care about what you can offer at this point in time, just find a spot for me because I really want to get involved.

I had a really good feeling about him and about what he was doing and his vision for developing CentreCourt into what it really is today and hopefully what it will be 5, 10, 15 years from now. Funny enough he said to me I’d like to put you in the sales center, but there’s a sales manager that’s running the project, a gentleman by the name of Johnson Chang who, Andrew, I know you know.

Andrew: Yes, absolutely.

Shamez: You said he’s going to be managing this project and if I’m going to bring anybody on I’d like him to meet you and interview you and bring you onboard. I had that meeting with Johnson and, I guess, the ironic part of that story and what I’m really getting at is Johnson is now our sales manager on Grid Condos, the project that we’re here to talk to you about which is now four and a half years later, so Johnson, in some ways, I always joke gave me a starting point in the Toronto real estate industry. It would now come full circle to be able to work with him again and really excited to work with him again on Grid Condos, so to answer your question that’s how I got to the seat that I’m in right now

Andrew: That’s a great story. Thanks for sharing that. You’re obviously very passionate about what you do and very focused on your career and your building CentreCourt into a first-class development company. What are you specifically most passionate about? What excites you the most about real estate or about building condos in Toronto today? What excites you?

Shamez: What really excites me is what’s happening in the city and I think there’s nothing like what’s happening in downtown Toronto today. Like I said I lived in New York just prior to being in Toronto and I lived in Manhattan and saw the vibrancy of New York City and learned to appreciate urbanism. I’m an urban guy by nature, I live a five-minute walk from our office. I just sold my car and don’t have any intentions of ever buying another car …

Andrew: Nice.

Shamez: … unless family requirements require me to.

Andrew: Great.

Shamez: I believe in great cities and I believe Toronto is and is becoming even more so a great city. As cheesy as it may sound and as sort of marketing fluff as it may sound I get geared up just walking the streets of the city and seeing everything that’s happening whether it’s a CentreCourt project or another developer’s project. Just the amount of activity that’s coming to this city and specifically to the downtown core and CentreCourt for those that don’t know we focus really exclusively on high-rise condominium development in downtown Toronto.

What excites me is that I know that every one of our buildings is going to bring hundreds of new residents to the streets. Peter Street which just completed and occupied at the end of last year into this year, our office is down the street, my apartment is just en route, so I walk by the site. I’ve been walking by it for the last four years. Just to see how much that building has changed that corner, the vibrancy, the number of people on the street, knowing neighboring businesses and talking to them about how much that building alone, just 429 units in one project.

There’s obviously many others in the entertainment district, but just seeing the impact that that’s really had on the city and building the city, that excites me. I told you I worked in finance once upon a time and finance I found to be interesting in a different way, numbers, and analysis on a spreadsheet and making high level decisions, but you never saw the tangible outcome of your work, you never saw a physical product that you could identify to as being something you worked on.

Andrew: Right.

Shamez: The feeling of seeing condominium from … We buy a site and it has to go through zoning and we have to take it through the sales launch, but to see it actually come to life over time that really energizes me and excites me and it’s back to that natural interest I had as a child just wanting to see things get built and developed. I just find it to be an incredible amount of fun. It’s not without its challenges like any job, any business, but certainly the end product, being able to be a city builder and create an impact on the skyline and create an impact on communities and neighborhoods that’s really exciting.

Andrew: You spent some time in New York, how do you … Everyone always wants to compare Toronto with New York. What’s your take on that? Are we becoming … Is the Manhattanization happening? Are we on track to become what Manhattan is today eventually, or do you see them as totally different? How do you see that?

Shamez: Yeah, I see them as very comparable in the sense that if you think about Toronto and you think about the core area of Toronto. Obviously, Toronto physically is not Manhattan. It’s not an island and it doesn’t have the burrow structure that Manhattan has. That said if you look at the core downtown Toronto and I mean call it the Water up to Bloor Street and maybe Jarvis to Spadina, that core area, the density that’s coming into this core and the number of skyscrapers and just the density of sites being approved in that core is very comparable to Manhattan.

What really makes Manhattan is not one or two buildings, not any particular location or neighborhood, it’s the amount of people. It is really the eyes on the street as Jane Jacobs said once upon a time. It’s really the vibrancy of the streets and the energy that it creates because you just have so many people living in confined spaces and just creates vibrancy. I think the core of downtown Toronto obviously is not anywhere close to where Manhattan is today, but going to Columbia one of the things we often studied was the history of Manhattan.

A lot of people are surprised by, who’ve been to New York in the last five years is if you actually look back 20 plus years, call it prior to the Rudy Giuliani years, Manhattan wasn’t a desirable place to be and it was an unsafe place to be. There wasn’t a lot of development activity happening. It was somewhat a city in a rut and after it got its policy straight, cleaned up the streets, and opened up to more foreign investment which is something that’s comparable to Toronto, it boomed. Over the 90s and 2000 period up until the recession, actually, and the 80s, New York really just blossomed, Manhattan really blossomed. I think that’s a very comparable story to what we’re seeing here in Toronto today.

Toronto up until just I think this last month from a period of call it the financial crisis in 2009 until just again a couple of months ago, Toronto had more high-rise condominium development, residential development than New York and that really surprises some people. Toronto actually had the third most in the world outside of Shanghai and, I think, New Delhi, and India. The amount of activity that we’re seeing in Toronto is truly remarkable, it’s truly world class and I often say to people I think Toronto is maybe 20 years behind New York and they laugh at that. I think if you think about where Toronto, in that core area that I defined is today versus where Manhattan was 20 years ago, it’s not that far off.

Andrew: Obviously, huge development going on everywhere as you said. Are you
concerned at all about over building? Do you feel there’s a condo bubble potentially forming? What’s your opinion on that?

Shamez: I’m always concerned. I’m always concerned with anything that can have a negative impact on our business and our developments. Concern is something that we’ll always have even through the good times and obviously through the bad. Am I concerned that we’re building too much product in the city? Right now I’m not and the reason I believe that is, if you look at the housing market as a whole, single family, mid-rise and high-rise and you look at the total number of completions that have occurred in the city over the last decade, so call it its natural development rate which has been absorbed and we all know there’s low vacancies on product in the market today, whatever category of housing you look at. That total number of housing units has stayed around $40,000 a year. It stayed in a very tight band year after year after year, even through the last five years where people …

Andrew: Right.

Shamez: … seem to believe we’re in an overbuilding environment. What’s changed is the composition between single family and high-rise condominiums. Where single family has dropped, high-rise has filled the demand in behind it. It hasn’t because on a combined basis it actually exceeded our normal Toronto averages, so the city continues to turn up roughly the same amount of housing. What it’s doing is changing the product type and really this is all a result of the provincial greenbelt legislation that’s limited the amount of new low density low-rise development.

Also, I think the natural urbanization of downtown is a machine that’s snowballed, it feeds upon itself and grows and grows and grows and as more people move downtown it becomes more vibrant and more livable. Anecdotally, I look at Peter Street condominiums, largely purchased by investor buyers for rental housing. We completed the project in early January. Sorry, yeah, late January of this year and by the end of February the building was substantially occupied.
That’s 429 units that were rented out.

When I talk to agents or investors who bought in the building it was a matter of days or a week or two at most to rent out their units. That’s in an area where … an entertainment district that we haven’t seen any development activity greater than that in the city and there was that absorption. Today here and now all the products that are getting delivered, all the condos and you ask anyone that’s actively renting condos in the market as a renter or a landlord and vacancy rates are incredibly low, product rents very quickly and there’s demand, there’s natural demand. The lights are on, people are living in it. It’s not like Vancouver that some say people don’t actually live in these units. All of the units in the city are occupied.

Andrew: Right.

Shamez: When you project that outwards you don’t really see a significant increase. We’re not going to deliver a batch of units this year or next year that’s inconsistent with what we’ve done in the past few years or the years following, so it’s pretty consistent. Our city has an interesting way of regulating itself. It’s becoming more and more difficult for developers like us to find good sites and develop them. When I look at the statistics and all this I should say is really coupled with the strong demographics of the city, so without the incredible immigration that we always hear the $100,000 a year statistic of new people coming to Toronto. Toronto, I think, is a winner.

The city itself is going to win long-term and short-term and as long as it continues to attract that number of people we’re going to need the housing to accommodate people. The low vacancy rates are showing us that, so concerned yes because I’m just concerned by nature and that’s my outlook. You should be concerned otherwise you’re blind to risks, but we’re very optimistic and we’re bringing a project to market in a matter of weeks and we’re actively looking to do more land acquisitions to continue developments.

Andrew: Right. Why don’t you tell us a little bit about CentreCourt. It’s a relatively young company as you touched on a little bit. Tell us a little bit about CentreCourt as a company and the track record so far and how has CentreCourt been so successful in such a short period of time?

Shamez: Sure, so CentreCourt at its foundation is actually a very simple business outlook and business principle which the name CentreCourt actually is derived from the center court in tennis matches, so in all the action happening on the center court and the idea behind that is we’re believers in urbanism, we’re believers in cities and if you look at all of our projects and what we’ve done and what we’re going to do it’s going to be focused on the downtown core of the city. Our simple philosophy is Toronto as a city is an incredible city in terms of what’s going on economically, socially, and otherwise.

The core of all that activity, the knowledge-based economy of the city and the growth of the city is centered around the core of the city. You look at all the office buildings and the financial district and otherwise that are creating incredible jobs and creating incredible vibrancy and then the supporting activities of development like us. We really believe that the amenities of the city are focused on the core. We also believe subway and transit, so you want to be in close proximity to subway and transit. We’re believers that in 10, 15 years we’re not even going to talk about parking in condominium projects anymore just like New York where they don’t offer that as a standard offering.

Andrew: Right.

Shamez: Back to what drove CentreCourt. Andrew Hoffman created it, he created the company about five years ago with the idea of wanting to focus on high-rise residential condominium in downtown Toronto again as a belief behind the city and what’s happening in the city. Wanting to stay very focused on residential development because as a developer we have choices of whether we want to do office development, industrial development, retail development. Residential on its own in the city is such a massive industry that we thought, you know what, as we grow being focused and being set in our ways of what we want to do in terms of development will serve us well because the downtown condo market is incredibly complex and difficult to navigate for a lot of people.

We thought the more we do the more we’ll become experts in it and really with the goal of being the pre-eminent development company in downtown Toronto focus on high-rise condominiums. That was the origins of CentreCourt. In the four years since its inception we’ve done an incredible amount of activity. We’ve actually become in just that short period of time one of the top developers in terms of quantity of units and success of projects in the city in the downtown core.

Andrew: Just for those people who don’t know, maybe you could just highlight the projects …

Shamez: Sure.

Andrew: … that you have done.

Shamez: Yeah, so our first one as I mentioned was Peter Street Condos, a 40 storey, a 429 unit project on the corner of Peter and Adelaide. That we launched in early 2011 is now 100% completed, 100% sold out, registered and fully occupied. In late 2011 we brought a project to market called Karma Condos which many of your listeners may be familiar with at Yonge and College, 50 storeys, 500 units. We sold that project in a matter of weeks and started construction later the following year and are now pouring the 14th floor and getting ready for occupancies to mid to late next year.

That was an incredibly successful project, again I could not have expected a better market response and the ensuing construction has been very positive. Following that a few months later we launched INDX Condos in early 2012 at Bay and Adelaide or more specifically at Temperance and Sheppard, 54 storeys, a 798 unit project which had an incredible market absorption in a new location that many hadn’t done a residential development project there before.

Andrew: Yes.

Shamez: That project again sold out very quickly, started construction shortly thereafter,
were 100% sold and doing the 26th floor this week and we’ll be completing that project by the middle of next year.

Most recently at early 2014 we brought a project to market called Core Condos at the corner of Dalhousie and Shuter, fairly close to Grid Condos, just east of Yonge and that project 24 storeys, 221 condominium units and we’re 100% sold out there as well and under construction with an estimated completion two years from now. What really excites me about our story to this point has been from your angle, Andrew, that you would see in the market would see it’s really the absorption on sales.

We’ve been 100% sold out on all four of our projects in a very short period of time, so the markets responded very well to the locations, the suites, the price points, the amenities, the buildings themselves. What’s even more exciting to me is the delivery beyond the sales. There are a lot of people in the sales world talking about you got to worry about pricing , location, and the rest. I also think it’s important to think about the execution and without naming names there’s so many projects in the city that have been delayed by two, three, four, five years. What gives us a great …

Andrew: It’s a big problem, yeah. It’s a problem that a lot of investors and would be condo investors look at and they’re concerned and they’re worried that they’re going to purchase this condo, it’s supposed to be ready in three, four years and then it drags out into … You hear the horror stories, five, six, seven, in some cases eight years.

Shamez: Yeah, yeah.

Andrew: It’s a problem that a lot of investors see.

Shamez: Your money’s tied up. The other thing is you’re subject to increases in development charges and a whole host of other things in terms of your final cost. For us it’s about taking that momentum that we got in sales and taking that right into construction. In all four of our projects within a year of our first sale we’ve been 100% sold out and in the ground, so we’ve been able to create a great story behind all of our projects and delivery as well. Peter Street is a perfect example with a number of projects that launch around the same time that are nowhere near completion. We were fully closed, completed, zero development charge adjustments on the statement of adjustments, just a really positive story. I know you know that project well, Andrew.

Andrew: Yeah.

Shamez: You had some of your clients in there, so I think overall a very positive story in terms of delivery beyond the sales program. That’s our focus and as we continue to grow we’re going to be selective in the projects that we take on and what we do we like to … We have a lean team inside our office and we like to be involved in all aspects, hands on in all aspects of all jobs, so we only want to take on as much as we feel good about. For the next foreseeable future I’d say we’d be doing one to two projects to market every year and grow our portfolio that way.

Andrew: Let’s shift gears and talk specifically about Grid Condos which is, of course, your latest project coming up very soon to Jarvis and Dundas. Why don’t you tell us a little bit … What are the high level key points that you want purchasers to know or investors to understand about what makes this project unique and why you’re excited about it.

Shamez: We were really very pleasantly surprised with the response that we received to Core Condos early last year and the market wasn’t I would say on the new condo side as healthy and as robust as it feels it is this time this year. At the time, for those that don’t know, again Core is at the corner of Shuter and Church or Shuter and Dalhousie which is only probably a three-minute walk from the Grid site, very close. They’re very comparable locations.

Andrew: Yeah.

Shamez: That project we brought it to market and we sold it out in a matter of really three days and it was a 221 unit project, but I feel if we had 600 more units we would have had just enough momentum, enough velocity.

Andrew: You got to take it two more days maybe.

Shamez: Yeah, yeah, exactly, maybe a week. At the pace we were going it could have been just that short. What it brought to our attention is we love the location and we knew that downtown … Just the east side of Yonge hadn’t received the attention that the west side had for so many years and if you do an aerial of Toronto it’s really interesting and you look at Yonge Street as a central corridor. If you look at how the west was developed versus the east it’s actually quite remarkable. It’s one of those things that if you didn’t know the city you’d ask yourself why is the east so underdeveloped relative to the west because proximity to the core is the same.

Andrew: It’s the same, yeah.

Shamez: We believe that, but we didn’t know because we were somewhat pioneering last year when we brought our project. It’s [inaudible 00:24:27] a lot of new condo activity. Now in the subsequent 12 months there’s been a tremendous amount and that’s the story that I’m getting to. When we launched Grid and had that amazing, overwhelming response what we realized is the neighborhood, the area that Grid and that Core are located in are really an amazing location in the city for … There’s a number of factors, but I’ll just say one major reason, it’s Ryerson University and Ryerson University,for anybody that’s looking at Grid Condos, they should really be thinking about what Ryerson University means for that neighborhood.

Andrew: Yeah.

Shamez: For those that aren’t aware Ryerson is, from the statistics I’ve read, the fastest growing major university in Canada. Its roots 20 years ago were a small polytechnic institution. Today it’s got 33,000 students across a myriad of educational programs and the school has a massive angle towards growth. Their focus is on growth growing out of province and out of country students and creating a truly global, a truly well-recognized international university, institution. The Ryerson campus is basically bound on the southeast quadrant is really where Grid’s situated, so Grid is on the southeast corner of Dundas and Jarvis. On the northwest corner Ryerson owns a parking lot, so literally kitty-corner and just across the street. You could throw a rock at it if you really wanted to.

There’s two parking lots that Ryerson owns that they’ve got in development for what they’re calling their future sciences building. Now we’ve heard and I don’t have any sources to confirm this and it’s not public knowledge, but we’ve heard that that’s a future medical school location. Nonetheless whether it’s a medical school or a sciences building, what’s incredible about this location is you are literally in the Ryerson urban campus. Ryerson as it’s grown exponentially has grown its number of students, it’s grown its number of programs, its number of faculty, but because it’s an urban campus located in downtown Toronto and because Ryerson’s not a homebuilding company, it’s a university institution, they have not build student accommodations to go along with the pace of growth of activity of their buildings and of their programs.

It’s left to other developers, ourselves included, to create housing stock for Ryerson students. What’s happened since we launched Core there’s been about two or three other projects that have come to market and had tremendous response, tremendous absorption and it’s just the beginning in my view. I think the whole area of Dundas and Jarvis,

I think today it’s a great area, I think tomorrow it’s an even more exciting area. There’s activity happening on every single corner of the block that we’re on, but really as we think about the buyer of this project and the end user we think it’s largely going to be, and I’m not shy to say it because I think it’s a great source of success story in the city, investor buyers.

I don’t know why developers are nervous to talk about investor buyers. To me they’re a great partner to have in these developments. They bring our projects to life, so we realize that this is largely going to be a building that accommodates Ryerson students or Ryerson professors, faculty, administration, et cetera. There’s also a number of other amenities. I know I focus a lot on Ryerson, but St. Michael’s Hospital is only a block away and St. Michael’s got a huge residency program, so again there’ll be a lot of medical school students, professors, et cetera. George Brown is only a few blocks away, the Canadian Ballet, the Canadian National Ballet.

Andrew: U of T campuses are really not that far away either.

Shamez: No, exactly. It sounds like Ryerson, I’m making it all about Ryerson, but you’re two blocks away from Yonge Street, so you have all the amenities of downtown Toronto, but really even more distinguishing about this site is the fact that it’s right on the doorstep. A lot of the thinking as we will come to market and as we will share it with you, a lot of the thinking behind the project in terms of its amenities, in terms of its sweet designs, in terms of its price point ultimately are designed with the notion of mind that it’s going to be largely investor buyers purchasing units in this project with the idea of renting to Ryerson students or faculty or grad students.
When you look at the relationship between the income that these units can generate and the cost of caring which, I think, pricing as we come to market will be another key selling feature because it’ll be, I think, a very well-priced project and offer tremendous returns to investors who are looking for cash flow relative to other projects in the city. You can quickly see how we’ve designed the building, suites, price point, amenities, et cetera.

Just not to get into it too deeply unless you want to talk about the amenity program, but one thing that we’re doing that I think is different than any other project in the city that I’m aware of is creating what we’re calling the Grid learning center. When we design a building we specifically design the amenities. Our goal at CentreCourt is to reverse the industry trend of amenities being these areas and buildings that collect dust, that nobody ever visits, and that end up being a drag on the condo fees.

Andrew: They look good on a brochure, but no one ever actually sets foot in them.

Shamez: Or in an editorial or something like that, but nobody actually uses them and it ends up just being a drag on the condominium fees. Instead what we want to do is we want to create an amenity program that generates excess rents, generates excess value in the condos, that they’re actually a selling feature of the building. In doing that we studied the Ryerson urban student, we studied what the amenity is that they miss the most in their day to day. We realized very quickly it was space, space to do work, space to collaborate, space to do anything outside of being in their program, in their classroom or being in their unit. How we realized that was actually Ryerson opened up a learning center on Yonge Street at the old Sam the Record Man site. They opened it up about three months ago.

Andrew: Yeah.

Shamez: When we were thinking about Grid and we started getting into the early stages we did a team trip over to the learning center because we thought, okay, this is a new Ryerson [inaudible 00:30:10], we’ll learn something about the student and having no thought about the amenities at all, really just thinking about Grid Condos.

Andrew: Yeah, so what’d you find out?

Shamez: When we went there what we were blown away by is two things. One, that the learning center which is dubbed the 21st century library looks nothing like the library of years past. It’s not stacks and books and cubicles, it’s open concept, beautiful space, really comfortable modular seating, so you can work individually or in groups or you can modulize it for however you really want to learn. That was the first thing. It was an eye-opening to see what the 21st century digital student, how they work and it’s always with a laptop or an iPad in their hand. There’s no text books.

Andrew: Right.

Shamez: There’s no again sitting in stacks or cubicles, but what was really amazing and this was, I think, a couple of weeks after its opening. We couldn’t find a spot to sit, seven floors dedicated just to being this amenity and you could not find a single spot in the entire place to sit.

Andrew: Seven floors.

Shamez: Students were walking around aimlessly looking for places to sit, so then we said this is really interesting. They just opened the doors and this was what’s happening, so let’s just follow some students who don’t get seats. We follow them around and we notice they went to coffee shops and they went to look for seats in the Starbucks or the Second Cup or whatever the nearest coffee shop was.

Andrew: Right.

Shamez: You go in there again fighting for seats.

Andrew: Yeah.

Shamez: We realized these students are missing space. They don’t have a place to work, they don’t have an area to sit down and open up their laptop or iPad and just work.

Andrew: Yeah.

Shamez: What we decided is we’re taking an entire floor of the building of Grid Condos, about 6,000 square feet on the inside and a significant amount on the outside and creating what is our version of the learning center, bringing that Ryerson learning center experience into the building. As we will bring this project to life we’ll release renderings and floor plans to show this, but essentially it’s going to have the same idea which is to have a beautifully designed space that’s really inviting for students to set up. There’ll be workstations, there will be just group stations, there’ll be a café area.

The idea would be if the condo corporation will allow it in its final form to have it as a 24/7 operation because again students don’t work nine to five, they work on their own schedules and to outfit it with the best in technology; high speed wireless Internet, scanners, photocopiers, all the things that students need, but don’t have the money to pay for or ultimately the space.

Andrew: Individually, yeah.

Shamez: The idea would be … You’re a student living in the building. Instead of working in your efficiently designed but still small suite with a roommate you just take your laptop, your iPad down to the learning center on the second floor and you’re plug and play. You’re right in there and that becomes your place of work, so that’s really exciting, that whole concept. In addition now we’ve got a really large fitness facility which is important because students care about their health and more importantly about looking good and attracting the opposite sex or the same sex, whatever their flavor is. We’ve got a large, a very large gym that no student in there will have to have a gym membership. A couple of guest suites because we realize that students often have family and friends from out of town or out of the country.

Andrew: Mom and dad come to visit from …

Shamez: Exactly.

Andrew: … wherever.

Shamez: If you’re a better student than I was you want your parents to visit and you want to put them up close by, you’ve got that amenity at your fingertips. Yeah, so it’s a really exciting amenity program that I think it ties in very well to the target market of the project.

Andrew: Yeah, and I think again for the listener, again what Shamez is pointing out and what makes CentreCourt really unique and what makes Grid Condos really unique is this concept of designing the building from the investor point of view or designing the building from the inside out in the sense of … from what rental income that you can generate from these units. Okay, then what type of unit do we have to design, what type of price point do we have to hit, so that we are giving something back to the individual investor who’s putting their hard earned money into these units.
I think you need to be commended for that as a developer and I hope more developers take note of that approach rather than … There’s nothing wrong with it per say, but for the investor they’re not really concerned about being in the most beautiful architectural design building or a building like you said with all these amenities that nobody uses.

Rather the investor’s looking at their bottom-line, they’re looking at how much rent can this property generate for me and how much is it going to cost relative to the cost. Like you said what amenities are in the building that are not going to be a drag on me and are not going to increase my maintenance fee significantly over time, but rather what amenities could there be that will actually increase my rent, so potentially could put higher demand for renters to be in my building versus another building.

Shamez: Exactly, and one point you brought up, the idea of designing from the inside out and being focused on again the end buyer who is our client, who’s our purchaser, who may be our homeowner, who may just be an investor owning to rent, but suites, suite designs and the way you plan suites. There’s two schools of thoughts and I’m sure a lot in between in terms of how you design a great building. Some developers choose to design the design of the outside of the building first and create what they think is an architecturally significant building. You can ask the question yourself whether you think it actually is, but nonetheless they say I want to create a great building, so let’s create a great exterior design. That’s one school of thought.

Sometimes from that what you end up seeing is all sorts of wacky designs of buildings; circular, curved, angled, different setbacks and terraces conditions and just different things that again may to some people create exciting architecture on the outside. Then they think about, okay, the suites on the inside. For us again particularly in locations like Grid Condos where they are largely going to be investor purchasers, for us it’s important to start on the inside out.

Suite design is the first place we start and we always say to ourselves and Grid is going to be a perfect example of that. What is it that we want to get in terms of a suite mix in here? What do we want the floor plate to look like? What do we want the suites on each floor to look like? Then we create that ideal floor plate and then with great architects such as the team at Page and Steele, we create great exteriors to wrap around that floor plate. I really don’t think we’re sacrificing anything on the architectural design for the interior.

Andrew: Right.

Shamez: If you start in the reverse order you end up with suite layouts that aren’t
efficient or aren’t focused on the target demographic.

Andrew: Or you get some good suites and some bad suites and everybody wants to buy the same suites and you’re left over with these other suites.

Shamez: Right, yeah.

Andrew: Yeah, there’s a rumor going around already. You guys haven’t released the plans, but there’s a rumor going around that your plans are some of the best plans that we’ve ever seen.

Shamez: We continue to perpetuate that rumor, yeah.

Andrew: Certainly, yeah, we’ve ever seen downtown, so excited to see the full package and excited to share that with my …

Shamez: Absolutely.

Andrew: … clients and listeners. Anything else we need to know about Grid Condos or any other points that you’d like to touch on about the project?

Shamez: No, as you mentioned we will be coming to market and sharing a little bit more of that information over the weeks and period ahead. That said that rumor that you just mentioned was started by me.

Andrew: Okay, that was you.

Shamez: I take full responsibility and I do take a great deal of pride in sending that out to market and I’m putting my personal stamp on it because I’ve worked on hundreds of suite designs now. I’ve got to say that what Page and Steele put forward and what we worked through as a team together on I really believe these are the most efficient plans that we’ve ever achieved. The focus is going to be on how to create multiple sources of revenue stream. All students typically will have at least one, maybe two roommates, so the design of the suites is going to be focused on that while still maintaining as you mentioned the low price point to allow carrying costs to be low.

Andrew: Yeah.

Shamez: I’m really excited and all I would add is I appreciate you and the efforts you’ve made in the market and I think you do a great job of informing your clients and listeners and having intelligent discussions like this one and putting informed opinions out there and being a great advocate for your clients. For us we just listen, that’s all we have to do is really listen. You give us good insights, I listen to your podcasts, I learn things from your insights and your buyer’s insights and we just listen.

Our goal is if we listened as well as we think we’ve listened that Grid should be the success story of 2015, the project that everybody talks about and wishes they had more allocation, more units to sell inside that project because the feedback we’ve received so far is incredibly positive. I’m just really excited to bring the project to market, excited to work on it again with you and hopefully some of your listeners, some of your clients will have an opportunity to purchase units at Grid and really excited about the next little while ahead.

Andrew: Great, excellent, thank you very much. Yeah, one more thing I’d like to add, too, about you guys is look, there’s a reason why your projects sell out so quickly. Your past few projects have sold out within a matter of weeks or in the case of your last one, Core, you sold out like you said in two days and that’s because there’s a lot of value there. The investors see the value and I think you’re doing something again which a lot of the top developers recognize and do and that is you’re leaving money on the table, you’re leaving money on the table for the individual investor, so that the value is clear, the value proposition is clear. You know as an investor if you’re buying in a CentreCourt building you’re going to do really well. You guys, you put that value out there, the market responds very well and very quickly and your buildings sell out really fast as a result.

Shamez: Absolutely, yeah.

Andrew: Keep doing that.

Shamez: Yeah, we’ll keep doing that.

Andrew: Don’t stop yet.

Shamez: We’ll keep trying to make you look good and make your clients make money because at the end of the day as I said our goal is to be the best development company in the city. The best development company in the city in my view has to think about who’s buying the units and has to make sure that they do well as well. If they don’t do well then they’re not coming back to our future projects and if they do well they’re going to be coming to all our future projects. To us it’s about creating a legacy, creating a brand and a story that we can carry to each project and the next and if we’re leaving a little bit of money on the table to allow the investor or your purchaser or your clients to do well that’s a great thing. If we can make it work on our end which we’ve been able to do we’re happy to do that and again create that story that you [inaudible 00:40:53] out there.

Andrew: Yeah, great. Not to put you on the spot, but one last question for you. I’ll give you something to think about. Is there one question that no one has ever asked you yet about yourself or about your company or about the condo market, but that you wish that somebody would ask you and what would that question be?

Shamez: That’s a very good question. I’m a little bit stumped. If I had to think about a question that I’d want somebody to ask me … I think we touched on it, one thing that … I don’t know how it formulates in the form of a question, but one thing that irritates me in the market that’s perpetuated I think by a lot of developers as well is the negative notion towards investor buyers. I find myself reading articles or interviews with other developers who are selling projects in competitive locations to us and projects that I know very well. They still perpetuate this belief that … Again there’s different buildings that attract different demographics, but in large part efficient suites downtown Toronto, a lot of the buyers are investors.

That’s by reality of the fact that you buy today and you don’t get delivery for four, five years. Very few end users will end up buying with that long-term duration. For some reason it’s got this negative connotation on it and I don’t get it, to me I really don’t get it because I say to myself there is a sophisticated group and it’s a large group of investors in this city that for the last 20 years have helped support the condo boom and trust me without your clients and them supporting the projects they don’t get off the ground.

We have to pre-sell to get construction financing and move a project forward, every project does that. Without their support, without their long-term vision and realization that they share a lot of the principles I started off with in this podcast development, what we’re focused on in building cities. They share that vision, they share the excitement for Toronto in the long-term. They’ve done well financially as a result of it, they’ve helped build the city, they’ve helped support all of our projects across the city. Again I think have done very well for themselves as well.

Andrew: Yeah.

Shamez: For some reason there’s this negative connotation. I’m not sure if it’s perpetuated by the banks or it’s perpetuated by other market participants, but it’s like oh, you’ve got investors in your building, oh, that’s a bad thing

Andrew: Right.

Shamez: I’m saying absolutely not. These are sophisticated partners. We look at them as partners. We don’t look at them as anything but some partners that help us bring these projects to market. I guess, the question that I don’t get asked directly enough is what is your view on the investor demographic and also, I guess, tied to that is we know factually that there’s a very small percentage of foreign investors in projects in the city meaning people who live have permanent residency overseas, but buy units. That said we do have a large ethnic demographic that buys in projects in Toronto. The Chinese community has been a very strong supporter, the South Asian community, the Russian community, the Persian community, I can go on and on.

Andrew: Yeah.

Shamez: They have been strong supporters of projects in the past and to me what’s really exciting about that is that’s a story of Toronto. It’s a story of how Toronto has grown and how it’s developed and how money has come in from other countries into the city by virtue of people moving here and moving their lives and moving their families, moving their businesses. The fact that these people continue to move to the city and support these projects and do well as a result of it, to me it’s a great story to be celebrated. Again for some reason and I still don’t know what that reason is, someone has to explain it to me, that seems is a negative thing out there in the industry. We take a different tone as you gather from this podcast which I’m sure a lot of other people you’ve had in my seat.

Andrew: Yeah.

Shamez: We don’t shy around it, we don’t beat around it. We know the reality and we’re actually excited by it and proud of it and we want to continue that. If it continues for 5, 10, 15, 20, 25 more years that’s great, that’s what we want to see. That means we’ve got a healthy, vibrant city and a lot going on.

Andrew: That’s great, 100% agree. Shamez, if you want to get a hold of you or if they want to learn more about CentreCourt Developments, what’s the best way to reach you or do that?

Shamez: If you wanted to learn more about Grid Condos I would suggest reaching out to you, Andrew, and you can give them all the information that they need.

Andrew: Yeah, absolutely.

Shamez: That would be the best source of information for them on the project. If they want to learn more about CentreCourt Developments I would invite you to visit our website at www.CentreCourtDevelopments with an ‘s’ at the end .com, centre spelled c-e-n-t-r-e. One of these days I’m going to get a much shorter website that we can market, but there’s a lot of information about us online, our projects, who’s in the company, our philosophies.

Actually, not to put a marketing plug at the end, but we’ve actually put together on our website our core principles of operating our business and those aren’t just fluffy PR or marketing pieces. Those are actually … Two years ago we went on a corporate retreat and we just sat around the fire for basically an entire day and said if we’re going to create the greatest development company in this city and hopefully in this country what are the principles that we need to operate by and that really would distinguish us as how we operate.

I’d encourage anybody who’s interested to learn more about us to check out those principles. We take them into account in everything that we do day in day out and they really do define how we act as a developer and how we interact with our purchasers and with all stakeholders involved in the process, so they can check that out. If they wanted to reach out to me personally to talk about anything again you have my contact information and I welcome anybody to reach it.

Andrew: Sure, great, okay. Shamez, thank you very much for your time.

Shamez: Thank you.

Andrew: Hopefully, we can have you on again on the show soon.

Shamez: Thank you very much.

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