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Hello everyone and welcome to another episode of the Real Estate Development Insights podcast, where we bring you ideas, experiences, and best practices from the real estate development industry.
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My name is Payam nhi.
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My guest for this episode is Jeff Thomas.
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Jeff is the group head for development at King Set Capital.
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Jeff joined King Set in 2018 and he's responsible for the vision execution of the firm's development business.
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In addition to acting as fund manager for King Set, affordable housing, LP, and also residential development lp, Jeff has been a member of the firm's management team since 2025.
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Prior to joining King Set, Jeff was managing partner at a brokerage, a commercial brokerage firm that was sold to Cushman Wakefield back in 2015 In his 15 year career as a broker, Jeff was active in office leasing, investment sales, and infill land development in downtown Toronto.
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We're gonna dive into all of those things today and get a better understanding of what they do as an institutional investor, as a partner, as someone who brings a lot to, some of the most.
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Important projects that are happening right now instead of Toronto.
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And for context, King.
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Set Capital is a Canadian private equity real estate investment firm that creates and co-invest in real estate investment solutions and manages multiple strategies such as growth, income, urban.
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Mortgage, residential development and affordable housing.
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As always, you can find more information about this episode and our guest on our website, realestate development insights.com.
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Realestate development insights.com.
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That's all one phrase, and please remember to subscribe and also please remember to tell others about us and help us grow the show together.
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Thank you and enjoy listening.
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Hi, Jeff, welcome to the show.
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How are you doing today?
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Fantastic.
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Thank you for being here.
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I know you're a very busy guy.
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Uh, can you please introduce yourself to our audience?
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Who's Jeff?
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And we go from there.
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What does that mean?
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Gotcha.
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So you come.
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Your personal background is not development.
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You come from, uh, the world of brokerage.
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You've worked there quite a while.
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You sold, um, your brokerage, I believe, to Wickman, uh, the Cush field team there, if I'm not wrong.
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Walk us through that.
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How did that happen?
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How did that transition?
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Why the transition?
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What were, what does it, what was that like?
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What were some of Yes, yes.
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I'm sure they are.
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Just for context, I've, because I've, I've been involved on the development side, but not the other side.
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What would you say is the main difference in the types of relationship or the length of the relationship that you're having?
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Like at the end of the day, you're, you're right, like on the.
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It's definitely a team sport.
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You have dozens of people, if not hundreds of people involved in the development project from the, from beginning to finish.
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How is that different or maybe identical to the previous setup?
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I like that word, trust.
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Um, the, uh.
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I think John, John C.
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Maxwell has a great book on leadership and, um, he defines trust, breaks it down into, basically makes an acronym out of it.
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And a t the first team trust in his definition stands for time.
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And that's, that's what he just said.
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Like the more you spend time, the more length of time you spend time with people and do business together, obviously that helps to build the trust even more, uh, with.
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Business travels at the speed of trust.
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That is true.
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Very true.
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Yeah, that's, that's, that's good that, that's, that's very true.
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And like, you just got me thinking that's very true.
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Like I've, I've been fortunate enough to work with some of the clients for like fifth project or fourth project right now.
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And the, the first project was a little bit bumpy.
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The second project got better, and, but not by the time fourth or fifth, like, we kind of finished each other sentences in a professional way, if you may.
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And that really helps speed things up.
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Yes, you're right.
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With that being said, 55 projects all across Canada, a large team, a lot of risk, a lot of opportunity, a lot of, a lot of things that could go right or wrong.
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I guess.
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Lemme go zoom out and say, how do you, how do you decide which projects to go into?
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What does it, what does a good deal look like from your perspective?
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I'm not trying to do that.
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So is it fair if I wanted to summarize that answer, is that because you're, you're basically swimming in an ocean of risk factors.
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You're trying to minimize some of them by picking the right party and having.
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Having the trust, like you mentioned, that that party is gonna take care of those risks or minimize them or mitigate them.
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Is that a fair way of putting it?
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Very true.
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Y.
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Yeah.
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Wow, Parkinson's.
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That's, that's, that's actually, that's a very rare thing that happens.
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And to your point, um, it was the transparency and the clear the.
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The quality of the messages that are coming through and the fact that they, you don't want to hear the cleaned version of the reality that that really helps.
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That really helps with, even for us on the construction side and running from the construction side of the projects, you always want to get to the bottom of things, not the cleaned version that people.
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Think you want to hear, and because it's typically missing some context.
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Interestingly enough, I was listening to, uh, Uber's, uh, CEO not too long ago, had a episode on the podcast, and he basically said the same thing.
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That the, the one of the keys to success at Uber has been transparency from ground up and the fact that tried to communicate that non cleaned version of the mess so people can actually do something about it.
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With, with that, with that being said.
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There When you go through king set's, um, verbiage and website and the documents that you guys have out there, there's something that it keeps coming up.
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It's a pr, it's a premium risk weighted return.
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What does that mean?
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Like what, for, for layman terms for someone who's not necessarily in the financial world, what you guys are offering in our investment opportunities in terms of, and it's called like it's, it comes up as risk weighted returns.
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What is that?
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So you're, you're, I guess that means that translates into less surprises or fewer surprises down the road for investors and the returns and, and potentially the fact that you've analyzed risk enough and built it into a system enables you to, to be more proactive, like you said, and do make better decisions knowing what they are.
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Is that the favorite way of putting it?
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Fantastic.
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Okay.
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I want to dive into 50 Wilson Heights.
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This project is a massive project that you guys are doing and there are a whole bunch of different partnerships going on.
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Can you walk us through the project?
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It's a big project.
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I think it's an important project because it has lots of moving parts and it will set up some precedence for other people and other projects hopefully to come in the future.
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Can you walk us through that project, what it is?
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Units, partnerships, structure where we are.
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I'm go from there.
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That's the, that's what I gathered from the 50 agreements before getting started.
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So can you, can you tell me what stage are you at right now?
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How long have you been involved in this deal and Woodward stage?
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Are you guys at Yeah, that's a surprise.
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Most, most fun exercise.
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Yes.
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Yes.
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Does this.
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That's pretty exciting to hear that that's moving.
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So looking back at this, these 50 agreements and getting to this point, if you were to document some of the lessons learned for yourself, your team, or for other our listeners who might, and hopefully who will eventually enter into these types of partnerships, because I think as you mentioned, this is a great opportunity for Citi to basically utilize.
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Underutilized or properly utilize the, the, the parcels of land, which there were not few, there are quite a bit of them around the city and, and even further out in the region.
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Uh, what are some of the lessons learned from this process and all the agreements and all the counterparts that you've dealt with?
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And I can, I can only imagine.
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It's with the number of parties involved and the complexity of the situation it has, and everyone can get really creative in things in terms of things that needs to be allowed for, accounted for in the contract contracts and agreements.
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So I guess.
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Building on that, we, not too long ago, we had um, uh, someone from CMHC on the podcast and we went through their most recent report on housing for the 2026 to 2028 market and their forecast basically.
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How are you seeing that changing?
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Like what is your take on it for the next two, three years on the market conditions?
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How are you guys underwriting projects?
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Obviously we know at this very moment in time, the condo market is.
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Not if entirely, that is very close to debt.
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And, um, what are, what is your take on that?
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What is King said thinking in terms of underwriting new projects?
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To your point, the, the HST, just the, the good news I guess on the HST for the first time home buyer rebate was increased very recently.
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Still probably takes time to make its way to the actual ground and we.
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You what the actual implications are.
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Um, if I want to go and look at that, the look at the current environment and say, okay, this is what we just talked about.
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Condos are not starting.
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The, the purpose-built rentals are pretty much the only thing that is happening.
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If that is happening, are you, or like if you're talking to, uh.
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Smaller developer.
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If you're talking to someone who's, who's been trying to, or is trying to, um, get a smaller six story 60 unit building going, because that's what City of Toronto is these days focusing on, they're allowing it, the whole discussions about the major streets and everything else.
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Do you have any suggestions, red flags, or maybe just would you tell'em to stop and don't do anything for a while, or how would you, how would you advise them if someone wants to start a midrise project these days, regardless if it's condo or PBR.
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I, I love that answer.
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It actually reminds me of a quote from Airbnb founder, I think his name.
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Is Brian Jetski and he, she said, uh, focus on the unscalable.
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'cause to your point, the things that can be scaled bigger boys have already figured out a way to do it.
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The things that, that cannot be scaled, uh, such as the ones that you were just mentioning, going and meeting the local residents, getting to know the community that will potentially buy those units or rent you those units from, from you.
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That's not something that you could do at scale, but you could do it at a 30 to 60 unit range and is.
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Definitely possible.
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It's probably not, it's, it's not gonna be easy, but it's gonna be doable.
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It's definitely doable.
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So I think I, I take that as a great advice there.
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Can we talk about.
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You're focused on modular.
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When you and I were talking offline, you obviously, we touched on your project.
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I think it's in Valhalla.
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It's called Valhalla Village, if I'm not wrong.
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And uh, you guys are using modular.
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Can you talk us about that project?
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What are the parameters, why, why modular?
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How do you like it?
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What are the challenges?
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Gotcha.
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It, it.
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I think one of the things that happens, uh, has happened over the past 10, 15 years is that we kept.
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Adding and adding and adding and increasing the number of criteria to the pile of criteria for approving a new building.
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And we started, I think one of our pre previous guests, uh, put it very nicely that we started optimizing for a hundred different things and we forgot to optimize for the actual affordability of it.
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Is that like you're, you're trying to get everything under the sun to the perfect, uh, degree possible.
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But then you just can't build it.
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You can't get scale, you can't repeat it.
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Every other, every building is gonna be different than the next one.
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And, um, to your point, I, I can definitely see where you're coming from because the modular by definition is putting some constraints on, on some of those variables and say, listen.
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We can't do just, we just can't do that.
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So don't ask us to do that.
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If you're in the municipality, if you're asking us for curved corners, we just can't do that.
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If you want us to do that in like, past timber or CIP or cast in place concrete or, or sorry, not, um, cast in place the, yeah.
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Precast concrete, uh, walls and floors.
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So you kind of have to make a trade off and it gives them, I guess I'm just, sorry I'm ranting here, but it almost gives them an excuse to say, listen, what do you want me to do?
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These guys can't do it any other way.
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You have to stick to their criteria.
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And it reminds me of that old saying that no one got fired for buying from IBM because there was no other option.
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Like this is the option you, you buy from them.
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And yeah.
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Agreed.
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I, I, I think it's, it's not happening yet, and it's.
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It's not happening yet.
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It seems to be missing some political will.
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It will it, it will upset a number of stakeholders on the grander scheme of things because they're always pushing for changes and improvements, which I can definitely, like you said, no, no single policy is probably bad in itself.
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It's just when you add a thousand of them together and tried to make a.
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Project pencil, then that's where things go wrong because it just doesn't work.
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You don't have that much money to split between all those criteria that are eating it up.
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Um, going back to my avatar for, uh, a new developer who's doing a midrise project and who's trying to put together, if they want to come to you and for some sort of partnership, either financing, jv.
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You name it, whichever would be possible, and it might not be on that one project, which is, which might be too small for you guys, but at some point in the future, they want to aim to come and talk to Jeff and say, listen, we want to do something with King Set.
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What would they need to have at that point in time to make them a good candidate?
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From your perspective, and I'm, I'm mainly, I know we talked about trust and track record and reputation, but I'm mainly also asking about.
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Systems, infrastructures and stuff like that is, do you think about that stuff or like what do you think about when someone comes to you and asks that question?
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Let me ask you this question.
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When you look into the future and or the current situation in market, are there any industry trends that you feel excited about that you see?
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You know what, yeah.
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We're in hard times right now.
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Markets are not, we need to be, but in 1, 2, 3, 5 years from now, this is gonna happen.
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Do you see any of those trends that make, that gets you going?
00:47:28.948 --> 00:47:34.228
Yeah, actually there's a lot i I am really excited about right now, I think in and broadly in the market.
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I think what's what's really cool is just, you know, we, we had this lack of expertise in Canada for people who were building rental buildings.
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Like there's, you know, there a small handful who've continued to do it over the last 40 years, you know, but a lot of new businesses that have grown and grown relatively quickly around rental.
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And more people looking to do more rental, you know, and it, and it's a lot different than doing, you know, a high-rise condo versus high-rise rental and needs a different skillset, you know?
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And so I think from an industry perspective, like it's super cool that, you know, we've got all kinds of people and businesses who are like learning and obtaining these skills, which quite frankly, you know, make you a better developer because you have to compete, you know?
00:48:25.168 --> 00:48:32.548
Take on a lot of risk, you know, articulate and underwrite very narrow margins, which you've gotta be perfect on.
00:48:33.268 --> 00:48:49.498
You know, and frankly, probably over a period of time, you know, the industry grew so much and probably got a little lazy, you know, were we competing head to head really well on, you know, some of the condo product, like, I'm not so sure.
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And so I think we're gonna emerge through this.
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You know, at a point in time where there are low, uh, limited amount of supply coming online, some rentals coming online, and then a whole industry that knows how to do this extra product type a whole lot better, you know?
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And so I think, you know, the customer will return.
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Um, it's an inevitability like Canada will continue to grow at some pace.
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Toronto is likely to continue to grow at some pace.
00:49:25.273 --> 00:49:33.343
Um, we will continue to have lots of old and obsolescent things that will be replaced with newer things as well, just, just out of obsolescence.
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So there's going to be like a lot of work to do.
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Um, you know, and I think the industry will emerge more resilient and stronger.
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Um, you know, and hopefully also on the construction side.
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You know, we'll have an opportunity to, for teams to sort of retool and reset and, you know, get their, A teams are great and they're busy and they're working, you know, and their B teams have an opportunity to sort of reset and get, you know, tighter and better so that you come out of it with two A teams and you know, that allows for a lot more productivity as well.
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So like, I think the future fundamentals in the market in terms of supply demand.
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Super favorable.
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I think as an industry, you know, you always emerge stronger when you go, you, you emerge from a tougher period of time.
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Um, you know, and we're picking up a skillset that, you know, not too many people had before.
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So, you know, I think in that sets a table for different creativity to do different things.
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Um, and so we should emerge doing a lot of really exciting things I think in the future.
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That's good news.
00:50:40.585 --> 00:50:41.664
Thank you for sharing that.
00:50:41.695 --> 00:50:44.184
Uh, we have a closing tradition on the podcast.
00:50:44.425 --> 00:50:57.625
Uh, we you a magic wand for about five minutes and we asked you to make a wish that wish, just whatever you like in terms of getting us in a better position.
00:50:58.405 --> 00:51:04.075
In terms of our housing crisis, affordability, and uh, it could be a change in regulation.
00:51:04.075 --> 00:51:09.835
It could be a policy, it could be a mind mindset shift, a paradigm shift, whatever you want it to be.
00:51:09.835 --> 00:51:11.215
What would that wish be?
00:51:14.023 --> 00:51:28.512
My wish would be that, uh, policy makers would recognize and prioritize housing rather than just say it.
00:51:28.932 --> 00:51:30.923
So there's all kinds of things that you can do, but.
00:51:31.573 --> 00:51:32.923
It's too much posturing.
00:51:34.093 --> 00:51:40.873
I would be ecstatic if people would just realize it was something they actually wanted to do and go do it.
00:51:41.503 --> 00:51:49.498
'cause the government can do amazing things when it wants to, and if it wanted to do something, it would've.
00:51:52.195 --> 00:51:52.675
Amen.
00:51:52.885 --> 00:51:53.275
Amen.
00:51:53.275 --> 00:51:54.325
Thank you for the wish.
00:51:54.475 --> 00:51:56.184
Thank you very much for being here, Jeff.
00:51:56.184 --> 00:52:01.704
I'm hoping that we can have a part two of this conversation in a couple years and have better news and
00:52:01.708 --> 00:52:02.008
good.
00:52:02.305 --> 00:52:03.445
conditions going on there.
00:52:03.775 --> 00:52:04.585
Thank you for your time.
00:52:04.948 --> 00:52:05.728
We'll get through it.
00:52:06.175 --> 00:52:08.575
We'll get together through it together.
00:52:08.605 --> 00:52:09.385
We're all in together.
00:52:09.505 --> 00:52:09.925
Thank you.
00:52:11.458 --> 00:52:11.847
Thanks.
00:00:01.560 --> 00:00:10.650
Hello everyone and welcome to another episode of the Real Estate Development Insights podcast, where we bring you ideas, experiences, and best practices from the real estate development industry.
00:00:11.339 --> 00:00:12.880
My name is Payam nhi.
00:00:13.050 --> 00:00:15.359
My guest for this episode is Jeff Thomas.
00:00:15.720 --> 00:00:18.960
Jeff is the group head for development at King Set Capital.
00:00:19.589 --> 00:00:25.920
Jeff joined King Set in 2018 and he's responsible for the vision execution of the firm's development business.
00:00:26.370 --> 00:00:37.679
In addition to acting as fund manager for King Set, affordable housing, LP, and also residential development lp, Jeff has been a member of the firm's management team since 2025.
00:00:38.340 --> 00:00:56.850
Prior to joining King Set, Jeff was managing partner at a brokerage, a commercial brokerage firm that was sold to Cushman Wakefield back in 2015 In his 15 year career as a broker, Jeff was active in office leasing, investment sales, and infill land development in downtown Toronto.
00:00:57.420 --> 00:01:07.120
We're gonna dive into all of those things today and get a better understanding of what they do as an institutional investor, as a partner, as someone who brings a lot to, some of the most.
00:01:07.959 --> 00:01:10.390
Important projects that are happening right now instead of Toronto.
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And for context, King.
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Set Capital is a Canadian private equity real estate investment firm that creates and co-invest in real estate investment solutions and manages multiple strategies such as growth, income, urban.
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Mortgage, residential development and affordable housing.
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As always, you can find more information about this episode and our guest on our website, realestate development insights.com.
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Realestate development insights.com.
00:01:36.819 --> 00:01:44.620
That's all one phrase, and please remember to subscribe and also please remember to tell others about us and help us grow the show together.
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Thank you and enjoy listening.
00:01:48.433 --> 00:01:50.174
Hi, Jeff, welcome to the show.
00:01:50.263 --> 00:01:50.983
How are you doing today?
00:01:55.603 --> 00:01:56.384
Fantastic.
00:01:56.384 --> 00:01:57.254
Thank you for being here.
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I know you're a very busy guy.
00:01:59.144 --> 00:02:01.963
Uh, can you please introduce yourself to our audience?
00:02:01.963 --> 00:02:02.683
Who's Jeff?
00:02:02.683 --> 00:02:03.763
And we go from there.
00:02:10.484 --> 00:02:10.848
What does that mean?
00:02:42.614 --> 00:02:42.894
Gotcha.
00:02:43.514 --> 00:02:44.454
So you come.
00:02:45.193 --> 00:02:47.324
Your personal background is not development.
00:02:47.383 --> 00:02:49.843
You come from, uh, the world of brokerage.
00:02:49.843 --> 00:02:51.493
You've worked there quite a while.
00:02:51.913 --> 00:02:58.093
You sold, um, your brokerage, I believe, to Wickman, uh, the Cush field team there, if I'm not wrong.
00:02:58.723 --> 00:02:59.443
Walk us through that.
00:02:59.443 --> 00:03:00.373
How did that happen?
00:03:00.373 --> 00:03:01.484
How did that transition?
00:03:01.484 --> 00:03:02.713
Why the transition?
00:03:03.074 --> 00:03:04.963
What were, what does it, what was that like?
00:04:13.663 --> 00:04:17.413
What were some of Yes, yes.
00:05:03.778 --> 00:05:04.528
I'm sure they are.
00:05:04.738 --> 00:05:09.149
Just for context, I've, because I've, I've been involved on the development side, but not the other side.
00:05:09.598 --> 00:05:15.959
What would you say is the main difference in the types of relationship or the length of the relationship that you're having?
00:05:15.959 --> 00:05:17.668
Like at the end of the day, you're, you're right, like on the.
00:05:18.298 --> 00:05:19.978
It's definitely a team sport.
00:05:20.369 --> 00:05:26.309
You have dozens of people, if not hundreds of people involved in the development project from the, from beginning to finish.
00:05:26.548 --> 00:05:31.228
How is that different or maybe identical to the previous setup?
00:07:43.923 --> 00:07:45.244
I like that word, trust.
00:07:45.274 --> 00:07:46.098
Um, the, uh.
00:07:46.353 --> 00:07:47.874
I think John, John C.
00:07:47.874 --> 00:07:55.744
Maxwell has a great book on leadership and, um, he defines trust, breaks it down into, basically makes an acronym out of it.
00:07:56.163 --> 00:07:59.733
And a t the first team trust in his definition stands for time.
00:08:00.244 --> 00:08:01.713
And that's, that's what he just said.
00:08:01.713 --> 00:08:09.994
Like the more you spend time, the more length of time you spend time with people and do business together, obviously that helps to build the trust even more, uh, with.
00:08:14.788 --> 00:08:16.588
Business travels at the speed of trust.
00:08:16.588 --> 00:08:17.129
That is true.
00:08:17.129 --> 00:08:17.434
Very true.
00:08:18.658 --> 00:08:21.329
Yeah, that's, that's, that's good that, that's, that's very true.
00:08:21.329 --> 00:08:23.788
And like, you just got me thinking that's very true.
00:08:23.788 --> 00:08:30.238
Like I've, I've been fortunate enough to work with some of the clients for like fifth project or fourth project right now.
00:08:30.718 --> 00:08:33.028
And the, the first project was a little bit bumpy.
00:08:33.028 --> 00:08:40.078
The second project got better, and, but not by the time fourth or fifth, like, we kind of finished each other sentences in a professional way, if you may.
00:08:40.288 --> 00:08:42.149
And that really helps speed things up.
00:08:42.149 --> 00:08:42.714
Yes, you're right.
00:08:43.438 --> 00:08:54.869
With that being said, 55 projects all across Canada, a large team, a lot of risk, a lot of opportunity, a lot of, a lot of things that could go right or wrong.
00:08:55.558 --> 00:08:56.129
I guess.
00:08:56.129 --> 00:09:01.109
Lemme go zoom out and say, how do you, how do you decide which projects to go into?
00:09:01.168 --> 00:09:05.009
What does it, what does a good deal look like from your perspective?
00:09:10.739 --> 00:09:11.774
I'm not trying to do that.
00:11:33.808 --> 00:11:40.318
So is it fair if I wanted to summarize that answer, is that because you're, you're basically swimming in an ocean of risk factors.
00:12:12.269 --> 00:12:15.959
You're trying to minimize some of them by picking the right party and having.
00:12:16.559 --> 00:12:22.109
Having the trust, like you mentioned, that that party is gonna take care of those risks or minimize them or mitigate them.
00:12:22.769 --> 00:12:23.969
Is that a fair way of putting it?
00:12:35.173 --> 00:12:35.663
Very true.
00:12:44.964 --> 00:12:45.084
Y.
00:12:45.389 --> 00:12:45.689
Yeah.
00:13:36.464 --> 00:13:37.994
Wow, Parkinson's.
00:14:40.994 --> 00:14:44.684
That's, that's, that's actually, that's a very rare thing that happens.
00:14:45.043 --> 00:14:49.379
And to your point, um, it was the transparency and the clear the.
00:14:50.219 --> 00:14:58.109
The quality of the messages that are coming through and the fact that they, you don't want to hear the cleaned version of the reality that that really helps.
00:14:58.109 --> 00:15:06.879
That really helps with, even for us on the construction side and running from the construction side of the projects, you always want to get to the bottom of things, not the cleaned version that people.
00:15:07.408 --> 00:15:11.819
Think you want to hear, and because it's typically missing some context.
00:15:11.819 --> 00:15:20.879
Interestingly enough, I was listening to, uh, Uber's, uh, CEO not too long ago, had a episode on the podcast, and he basically said the same thing.
00:15:20.879 --> 00:15:32.609
That the, the one of the keys to success at Uber has been transparency from ground up and the fact that tried to communicate that non cleaned version of the mess so people can actually do something about it.
00:15:33.059 --> 00:15:34.798
With, with that, with that being said.
00:15:35.278 --> 00:15:43.559
There When you go through king set's, um, verbiage and website and the documents that you guys have out there, there's something that it keeps coming up.
00:15:43.559 --> 00:15:46.889
It's a pr, it's a premium risk weighted return.
00:15:47.399 --> 00:15:48.059
What does that mean?
00:15:48.179 --> 00:16:02.009
Like what, for, for layman terms for someone who's not necessarily in the financial world, what you guys are offering in our investment opportunities in terms of, and it's called like it's, it comes up as risk weighted returns.
00:16:02.038 --> 00:16:02.489
What is that?
00:17:19.048 --> 00:17:43.769
So you're, you're, I guess that means that translates into less surprises or fewer surprises down the road for investors and the returns and, and potentially the fact that you've analyzed risk enough and built it into a system enables you to, to be more proactive, like you said, and do make better decisions knowing what they are.
00:17:44.218 --> 00:17:45.418
Is that the favorite way of putting it?
00:17:48.238 --> 00:17:48.928
Fantastic.
00:17:49.259 --> 00:17:49.499
Okay.
00:17:49.499 --> 00:17:52.558
I want to dive into 50 Wilson Heights.
00:17:52.948 --> 00:17:58.918
This project is a massive project that you guys are doing and there are a whole bunch of different partnerships going on.
00:17:59.578 --> 00:18:01.378
Can you walk us through the project?
00:18:01.378 --> 00:18:02.278
It's a big project.
00:18:02.278 --> 00:18:12.658
I think it's an important project because it has lots of moving parts and it will set up some precedence for other people and other projects hopefully to come in the future.
00:18:12.988 --> 00:18:14.433
Can you walk us through that project, what it is?
00:18:14.868 --> 00:18:17.628
Units, partnerships, structure where we are.
00:18:17.988 --> 00:18:18.503
I'm go from there.
00:23:07.928 --> 00:23:11.468
That's the, that's what I gathered from the 50 agreements before getting started.
00:23:11.468 --> 00:23:14.078
So can you, can you tell me what stage are you at right now?
00:23:14.738 --> 00:23:17.168
How long have you been involved in this deal and Woodward stage?
00:23:17.168 --> 00:23:28.043
Are you guys at Yeah, that's a surprise.
00:23:39.408 --> 00:23:40.993
Most, most fun exercise.
00:23:41.113 --> 00:23:41.653
Yes.
00:23:41.658 --> 00:23:41.818
Yes.
00:24:23.053 --> 00:24:23.533
Does this.
00:24:34.453 --> 00:24:36.613
That's pretty exciting to hear that that's moving.
00:24:36.613 --> 00:24:57.613
So looking back at this, these 50 agreements and getting to this point, if you were to document some of the lessons learned for yourself, your team, or for other our listeners who might, and hopefully who will eventually enter into these types of partnerships, because I think as you mentioned, this is a great opportunity for Citi to basically utilize.
00:24:57.983 --> 00:25:07.793
Underutilized or properly utilize the, the, the parcels of land, which there were not few, there are quite a bit of them around the city and, and even further out in the region.
00:25:08.243 --> 00:25:13.868
Uh, what are some of the lessons learned from this process and all the agreements and all the counterparts that you've dealt with?
00:26:39.458 --> 00:26:40.958
And I can, I can only imagine.
00:26:40.958 --> 00:26:53.588
It's with the number of parties involved and the complexity of the situation it has, and everyone can get really creative in things in terms of things that needs to be allowed for, accounted for in the contract contracts and agreements.
00:26:53.858 --> 00:26:54.728
So I guess.
00:26:54.983 --> 00:27:09.593
Building on that, we, not too long ago, we had um, uh, someone from CMHC on the podcast and we went through their most recent report on housing for the 2026 to 2028 market and their forecast basically.
00:27:10.013 --> 00:27:12.203
How are you seeing that changing?
00:27:12.203 --> 00:27:15.743
Like what is your take on it for the next two, three years on the market conditions?
00:27:15.743 --> 00:27:17.693
How are you guys underwriting projects?
00:27:18.053 --> 00:27:22.338
Obviously we know at this very moment in time, the condo market is.
00:27:23.203 --> 00:27:25.573
Not if entirely, that is very close to debt.
00:27:26.173 --> 00:27:28.783
And, um, what are, what is your take on that?
00:27:28.874 --> 00:27:31.603
What is King said thinking in terms of underwriting new projects?
00:30:49.783 --> 00:30:57.043
To your point, the, the HST, just the, the good news I guess on the HST for the first time home buyer rebate was increased very recently.
00:30:57.433 --> 00:31:01.813
Still probably takes time to make its way to the actual ground and we.
00:31:01.993 --> 00:31:03.374
You what the actual implications are.
00:31:03.884 --> 00:31:11.983
Um, if I want to go and look at that, the look at the current environment and say, okay, this is what we just talked about.
00:31:12.103 --> 00:31:13.273
Condos are not starting.
00:31:13.483 --> 00:31:18.103
The, the purpose-built rentals are pretty much the only thing that is happening.
00:31:18.134 --> 00:31:23.863
If that is happening, are you, or like if you're talking to, uh.
00:31:24.448 --> 00:31:25.378
Smaller developer.
00:31:25.499 --> 00:31:40.228
If you're talking to someone who's, who's been trying to, or is trying to, um, get a smaller six story 60 unit building going, because that's what City of Toronto is these days focusing on, they're allowing it, the whole discussions about the major streets and everything else.
00:31:40.648 --> 00:31:53.394
Do you have any suggestions, red flags, or maybe just would you tell'em to stop and don't do anything for a while, or how would you, how would you advise them if someone wants to start a midrise project these days, regardless if it's condo or PBR.
00:35:03.254 --> 00:35:04.209
I, I love that answer.
00:35:04.209 --> 00:35:08.769
It actually reminds me of a quote from Airbnb founder, I think his name.
00:35:08.919 --> 00:35:14.019
Is Brian Jetski and he, she said, uh, focus on the unscalable.
00:35:14.409 --> 00:35:19.209
'cause to your point, the things that can be scaled bigger boys have already figured out a way to do it.
00:35:19.689 --> 00:35:31.568
The things that, that cannot be scaled, uh, such as the ones that you were just mentioning, going and meeting the local residents, getting to know the community that will potentially buy those units or rent you those units from, from you.
00:35:31.568 --> 00:35:36.969
That's not something that you could do at scale, but you could do it at a 30 to 60 unit range and is.
00:35:37.039 --> 00:35:38.239
Definitely possible.
00:35:38.239 --> 00:35:41.778
It's probably not, it's, it's not gonna be easy, but it's gonna be doable.
00:35:41.778 --> 00:35:42.829
It's definitely doable.
00:35:43.219 --> 00:35:46.129
So I think I, I take that as a great advice there.
00:35:46.519 --> 00:35:47.599
Can we talk about.
00:35:48.704 --> 00:35:50.233
You're focused on modular.
00:35:50.443 --> 00:35:54.224
When you and I were talking offline, you obviously, we touched on your project.
00:35:54.673 --> 00:35:55.874
I think it's in Valhalla.
00:35:55.963 --> 00:35:58.064
It's called Valhalla Village, if I'm not wrong.
00:35:58.544 --> 00:36:00.764
And uh, you guys are using modular.
00:36:00.764 --> 00:36:02.653
Can you talk us about that project?
00:36:02.713 --> 00:36:04.994
What are the parameters, why, why modular?
00:36:05.024 --> 00:36:06.164
How do you like it?
00:36:06.224 --> 00:36:07.184
What are the challenges?
00:36:20.354 --> 00:36:20.804
Gotcha.
00:39:07.124 --> 00:39:07.814
It, it.
00:40:05.159 --> 00:40:10.679
I think one of the things that happens, uh, has happened over the past 10, 15 years is that we kept.
00:40:11.189 --> 00:40:18.028
Adding and adding and adding and increasing the number of criteria to the pile of criteria for approving a new building.
00:40:18.479 --> 00:40:27.959
And we started, I think one of our pre previous guests, uh, put it very nicely that we started optimizing for a hundred different things and we forgot to optimize for the actual affordability of it.
00:40:28.469 --> 00:40:34.469
Is that like you're, you're trying to get everything under the sun to the perfect, uh, degree possible.
00:40:35.009 --> 00:40:36.329
But then you just can't build it.
00:40:36.329 --> 00:40:38.009
You can't get scale, you can't repeat it.
00:40:38.009 --> 00:40:40.709
Every other, every building is gonna be different than the next one.
00:40:41.219 --> 00:40:52.079
And, um, to your point, I, I can definitely see where you're coming from because the modular by definition is putting some constraints on, on some of those variables and say, listen.
00:40:52.084 --> 00:40:53.584
We can't do just, we just can't do that.
00:40:53.584 --> 00:40:54.544
So don't ask us to do that.
00:40:54.934 --> 00:40:58.864
If you're in the municipality, if you're asking us for curved corners, we just can't do that.
00:40:58.864 --> 00:41:05.929
If you want us to do that in like, past timber or CIP or cast in place concrete or, or sorry, not, um, cast in place the, yeah.
00:41:06.524 --> 00:41:08.564
Precast concrete, uh, walls and floors.
00:41:08.564 --> 00:41:17.864
So you kind of have to make a trade off and it gives them, I guess I'm just, sorry I'm ranting here, but it almost gives them an excuse to say, listen, what do you want me to do?
00:41:17.864 --> 00:41:19.304
These guys can't do it any other way.
00:41:19.304 --> 00:41:20.864
You have to stick to their criteria.
00:41:21.193 --> 00:41:26.624
And it reminds me of that old saying that no one got fired for buying from IBM because there was no other option.
00:41:26.864 --> 00:41:28.844
Like this is the option you, you buy from them.
00:41:28.844 --> 00:41:30.614
And yeah.
00:42:30.784 --> 00:42:31.144
Agreed.
00:43:26.149 --> 00:43:32.144
I, I, I think it's, it's not happening yet, and it's.
00:43:32.954 --> 00:43:33.943
It's not happening yet.
00:43:33.943 --> 00:43:36.344
It seems to be missing some political will.
00:43:36.403 --> 00:43:50.713
It will it, it will upset a number of stakeholders on the grander scheme of things because they're always pushing for changes and improvements, which I can definitely, like you said, no, no single policy is probably bad in itself.
00:43:50.713 --> 00:43:53.354
It's just when you add a thousand of them together and tried to make a.
00:43:54.074 --> 00:43:58.213
Project pencil, then that's where things go wrong because it just doesn't work.
00:43:58.213 --> 00:44:02.774
You don't have that much money to split between all those criteria that are eating it up.
00:44:03.044 --> 00:44:17.414
Um, going back to my avatar for, uh, a new developer who's doing a midrise project and who's trying to put together, if they want to come to you and for some sort of partnership, either financing, jv.
00:44:18.099 --> 00:44:30.818
You name it, whichever would be possible, and it might not be on that one project, which is, which might be too small for you guys, but at some point in the future, they want to aim to come and talk to Jeff and say, listen, we want to do something with King Set.
00:44:31.449 --> 00:44:36.489
What would they need to have at that point in time to make them a good candidate?
00:44:36.489 --> 00:44:43.568
From your perspective, and I'm, I'm mainly, I know we talked about trust and track record and reputation, but I'm mainly also asking about.
00:44:43.789 --> 00:44:51.229
Systems, infrastructures and stuff like that is, do you think about that stuff or like what do you think about when someone comes to you and asks that question?
00:47:01.990 --> 00:47:02.980
Let me ask you this question.
00:47:03.430 --> 00:47:13.900
When you look into the future and or the current situation in market, are there any industry trends that you feel excited about that you see?
00:47:13.900 --> 00:47:14.680
You know what, yeah.
00:47:14.680 --> 00:47:15.880
We're in hard times right now.
00:47:15.880 --> 00:47:23.800
Markets are not, we need to be, but in 1, 2, 3, 5 years from now, this is gonna happen.
00:47:24.039 --> 00:47:26.555
Do you see any of those trends that make, that gets you going?
00:47:28.948 --> 00:47:34.228
Yeah, actually there's a lot i I am really excited about right now, I think in and broadly in the market.
00:47:34.288 --> 00:47:43.137
I think what's what's really cool is just, you know, we, we had this lack of expertise in Canada for people who were building rental buildings.
00:47:43.137 --> 00:47:56.458
Like there's, you know, there a small handful who've continued to do it over the last 40 years, you know, but a lot of new businesses that have grown and grown relatively quickly around rental.
00:47:57.268 --> 00:48:07.648
And more people looking to do more rental, you know, and it, and it's a lot different than doing, you know, a high-rise condo versus high-rise rental and needs a different skillset, you know?
00:48:07.648 --> 00:48:24.748
And so I think from an industry perspective, like it's super cool that, you know, we've got all kinds of people and businesses who are like learning and obtaining these skills, which quite frankly, you know, make you a better developer because you have to compete, you know?
00:48:25.168 --> 00:48:32.548
Take on a lot of risk, you know, articulate and underwrite very narrow margins, which you've gotta be perfect on.
00:48:33.268 --> 00:48:49.498
You know, and frankly, probably over a period of time, you know, the industry grew so much and probably got a little lazy, you know, were we competing head to head really well on, you know, some of the condo product, like, I'm not so sure.
00:48:50.097 --> 00:48:52.498
And so I think we're gonna emerge through this.
00:48:53.668 --> 00:49:10.018
You know, at a point in time where there are low, uh, limited amount of supply coming online, some rentals coming online, and then a whole industry that knows how to do this extra product type a whole lot better, you know?
00:49:10.018 --> 00:49:14.128
And so I think, you know, the customer will return.
00:49:14.668 --> 00:49:19.887
Um, it's an inevitability like Canada will continue to grow at some pace.
00:49:21.373 --> 00:49:24.403
Toronto is likely to continue to grow at some pace.
00:49:25.273 --> 00:49:33.343
Um, we will continue to have lots of old and obsolescent things that will be replaced with newer things as well, just, just out of obsolescence.
00:49:33.343 --> 00:49:36.103
So there's going to be like a lot of work to do.
00:49:36.583 --> 00:49:40.603
Um, you know, and I think the industry will emerge more resilient and stronger.
00:49:41.083 --> 00:49:44.383
Um, you know, and hopefully also on the construction side.
00:49:45.583 --> 00:50:08.323
You know, we'll have an opportunity to, for teams to sort of retool and reset and, you know, get their, A teams are great and they're busy and they're working, you know, and their B teams have an opportunity to sort of reset and get, you know, tighter and better so that you come out of it with two A teams and you know, that allows for a lot more productivity as well.
00:50:08.323 --> 00:50:12.103
So like, I think the future fundamentals in the market in terms of supply demand.
00:50:12.778 --> 00:50:13.978
Super favorable.
00:50:13.978 --> 00:50:20.818
I think as an industry, you know, you always emerge stronger when you go, you, you emerge from a tougher period of time.
00:50:21.298 --> 00:50:27.807
Um, you know, and we're picking up a skillset that, you know, not too many people had before.
00:50:27.807 --> 00:50:33.327
So, you know, I think in that sets a table for different creativity to do different things.
00:50:33.597 --> 00:50:38.472
Um, and so we should emerge doing a lot of really exciting things I think in the future.
00:50:39.745 --> 00:50:40.525
That's good news.
00:50:40.585 --> 00:50:41.664
Thank you for sharing that.
00:50:41.695 --> 00:50:44.184
Uh, we have a closing tradition on the podcast.
00:50:44.425 --> 00:50:57.625
Uh, we you a magic wand for about five minutes and we asked you to make a wish that wish, just whatever you like in terms of getting us in a better position.
00:50:58.405 --> 00:51:04.075
In terms of our housing crisis, affordability, and uh, it could be a change in regulation.
00:51:04.075 --> 00:51:09.835
It could be a policy, it could be a mind mindset shift, a paradigm shift, whatever you want it to be.
00:51:09.835 --> 00:51:11.215
What would that wish be?
00:51:14.023 --> 00:51:28.512
My wish would be that, uh, policy makers would recognize and prioritize housing rather than just say it.
00:51:28.932 --> 00:51:30.923
So there's all kinds of things that you can do, but.
00:51:31.573 --> 00:51:32.923
It's too much posturing.
00:51:34.093 --> 00:51:40.873
I would be ecstatic if people would just realize it was something they actually wanted to do and go do it.
00:51:41.503 --> 00:51:49.498
'cause the government can do amazing things when it wants to, and if it wanted to do something, it would've.
00:51:52.195 --> 00:51:52.675
Amen.
00:51:52.885 --> 00:51:53.275
Amen.
00:51:53.275 --> 00:51:54.325
Thank you for the wish.
00:51:54.475 --> 00:51:56.184
Thank you very much for being here, Jeff.
00:51:56.184 --> 00:52:01.704
I'm hoping that we can have a part two of this conversation in a couple years and have better news and
00:52:01.708 --> 00:52:02.008
good.
00:52:02.305 --> 00:52:03.445
conditions going on there.
00:52:03.775 --> 00:52:04.585
Thank you for your time.
00:52:04.948 --> 00:52:05.728
We'll get through it.
00:52:06.175 --> 00:52:08.575
We'll get together through it together.
00:52:08.605 --> 00:52:09.385
We're all in together.
00:52:09.505 --> 00:52:09.925
Thank you.
00:52:11.458 --> 00:52:11.847
Thanks.
