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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?
00:48:27.368 --> 00:48:32.648
Yeah, actually there's a lot i I am really excited about right now, I think in and broadly in the market.
00:48:32.708 --> 00:48:41.557
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.
00:48:55.688 --> 00:49:06.068
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?
00:49:06.068 --> 00:49:23.168
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?
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Take on a lot of risk, you know, articulate and underwrite very narrow margins, which you've gotta be perfect on.
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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.
00:50:13.088 --> 00:50:18.307
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.
00:50:23.693 --> 00:50:31.763
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.
00:51:06.743 --> 00:51:10.523
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.
00:51:32.018 --> 00:51:36.893
Um, and so we should emerge doing a lot of really exciting things I think in the future.
00:51:38.165 --> 00:51:38.945
That's good news.
00:51:39.005 --> 00:51:40.085
Thank you for sharing that.
00:51:40.115 --> 00:51:42.605
Uh, we have a closing tradition on the podcast.
00:51:42.845 --> 00:51:56.045
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.
00:51:56.825 --> 00:52:02.495
In terms of our housing crisis, affordability, and uh, it could be a change in regulation.
00:52:02.495 --> 00:52:08.255
It could be a policy, it could be a mind mindset shift, a paradigm shift, whatever you want it to be.
00:52:08.255 --> 00:52:09.635
What would that wish be?
00:52:12.443 --> 00:52:26.932
My wish would be that, uh, policy makers would recognize and prioritize housing rather than just say it.
00:52:27.353 --> 00:52:29.343
So there's all kinds of things that you can do, but.
00:52:29.993 --> 00:52:31.343
It's too much posturing.
00:52:32.513 --> 00:52:39.293
I would be ecstatic if people would just realize it was something they actually wanted to do and go do it.
00:52:39.923 --> 00:52:47.918
'cause the government can do amazing things when it wants to, and if it wanted to do something, it would've.
00:52:50.615 --> 00:52:51.095
Amen.
00:52:51.305 --> 00:52:51.695
Amen.
00:52:51.695 --> 00:52:52.745
Thank you for the wish.
00:52:52.895 --> 00:52:54.605
Thank you very much for being here, Jeff.
00:52:54.605 --> 00:53:00.125
I'm hoping that we can have a part two of this conversation in a couple years and have better news and
00:53:00.128 --> 00:53:00.428
good.
00:53:00.725 --> 00:53:01.865
conditions going on there.
00:53:02.195 --> 00:53:03.005
Thank you for your time.
00:53:03.368 --> 00:53:04.148
We'll get through it.
00:53:04.595 --> 00:53:06.995
We'll get together through it together.
00:53:07.025 --> 00:53:07.805
We're all in together.
00:53:07.925 --> 00:53:08.345
Thank you.
00:53:09.878 --> 00:53:10.268
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.
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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.
00:12:39.098 --> 00:12:42.788
You're trying to minimize some of them by picking the right party and having.
00:12:43.389 --> 00:12:48.938
Having the trust, like you mentioned, that that party is gonna take care of those risks or minimize them or mitigate them.
00:12:49.598 --> 00:12:50.798
Is that a fair way of putting it?
00:13:02.003 --> 00:13:02.493
Very true.
00:13:11.793 --> 00:13:11.913
Y.
00:13:12.218 --> 00:13:12.519
Yeah.
00:14:03.293 --> 00:14:04.823
Wow, Parkinson's.
00:15:07.823 --> 00:15:11.514
That's, that's, that's actually, that's a very rare thing that happens.
00:15:11.873 --> 00:15:16.208
And to your point, um, it was the transparency and the clear the.
00:15:17.048 --> 00:15:24.938
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.
00:15:24.938 --> 00:15:33.708
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.
00:15:34.238 --> 00:15:38.649
Think you want to hear, and because it's typically missing some context.
00:15:38.649 --> 00:15:47.708
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.
00:15:47.708 --> 00:15:59.438
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.
00:15:59.889 --> 00:16:01.628
With, with that, with that being said.
00:16:02.108 --> 00:16:10.389
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.
00:16:10.389 --> 00:16:13.718
It's a pr, it's a premium risk weighted return.
00:16:14.228 --> 00:16:14.889
What does that mean?
00:16:15.009 --> 00:16:28.838
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.
00:16:28.868 --> 00:16:29.318
What is that?
00:17:45.878 --> 00:18:10.599
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.
00:18:11.048 --> 00:18:12.249
Is that the favorite way of putting it?
00:18:15.068 --> 00:18:15.759
Fantastic.
00:18:16.089 --> 00:18:16.329
Okay.
00:18:16.329 --> 00:18:19.389
I want to dive into 50 Wilson Heights.
00:18:19.778 --> 00:18:25.749
This project is a massive project that you guys are doing and there are a whole bunch of different partnerships going on.
00:18:26.409 --> 00:18:28.209
Can you walk us through the project?
00:18:28.209 --> 00:18:29.109
It's a big project.
00:18:29.109 --> 00:18:39.489
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.
00:18:39.818 --> 00:18:41.264
Can you walk us through that project, what it is?
00:18:41.699 --> 00:18:44.459
Units, partnerships, structure where we are.
00:18:44.818 --> 00:18:45.334
I'm go from there.
00:23:34.759 --> 00:23:38.298
That's the, that's what I gathered from the 50 agreements before getting started.
00:23:38.298 --> 00:23:40.909
So can you, can you tell me what stage are you at right now?
00:23:41.568 --> 00:23:43.999
How long have you been involved in this deal and Woodward stage?
00:23:43.999 --> 00:23:54.874
Are you guys at Yeah, that's a surprise.
00:24:06.239 --> 00:24:07.824
Most, most fun exercise.
00:24:07.943 --> 00:24:08.484
Yes.
00:24:08.489 --> 00:24:08.649
Yes.
00:24:49.884 --> 00:24:50.364
Does this.
00:25:01.284 --> 00:25:03.443
That's pretty exciting to hear that that's moving.
00:25:03.443 --> 00:25:24.443
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.
00:25:24.814 --> 00:25:34.624
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.
00:25:35.074 --> 00:25:40.699
Uh, what are some of the lessons learned from this process and all the agreements and all the counterparts that you've dealt with?
00:27:06.288 --> 00:27:07.788
And I can, I can only imagine.
00:27:07.788 --> 00:27:52.009
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.
00:27:52.278 --> 00:27:53.148
So I guess.
00:27:53.403 --> 00:28:08.013
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.
00:28:08.433 --> 00:28:10.624
How are you seeing that changing?
00:28:10.624 --> 00:28:14.163
Like what is your take on it for the next two, three years on the market conditions?
00:28:14.163 --> 00:28:16.114
How are you guys underwriting projects?
00:28:16.473 --> 00:28:20.759
Obviously we know at this very moment in time, the condo market is.
00:28:21.624 --> 00:28:23.993
Not if entirely, that is very close to debt.
00:28:24.594 --> 00:28:27.203
And, um, what are, what is your take on that?
00:28:27.294 --> 00:28:30.023
What is King said thinking in terms of underwriting new projects?
00:31:48.203 --> 00:31:55.463
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.
00:31:55.854 --> 00:32:00.233
Still probably takes time to make its way to the actual ground and we.
00:32:00.413 --> 00:32:01.794
You what the actual implications are.
00:32:02.304 --> 00:32:10.403
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.
00:32:10.523 --> 00:32:11.693
Condos are not starting.
00:32:11.903 --> 00:32:16.523
The, the purpose-built rentals are pretty much the only thing that is happening.
00:32:16.554 --> 00:32:22.283
If that is happening, are you, or like if you're talking to, uh.
00:32:22.868 --> 00:32:23.798
Smaller developer.
00:32:23.919 --> 00:32:38.648
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.
00:32:39.068 --> 00:32:51.814
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.
00:36:01.674 --> 00:36:02.629
I, I love that answer.
00:36:02.629 --> 00:36:07.189
It actually reminds me of a quote from Airbnb founder, I think his name.
00:36:07.339 --> 00:36:12.439
Is Brian Jetski and he, she said, uh, focus on the unscalable.
00:36:12.829 --> 00:36:17.629
'cause to your point, the things that can be scaled bigger boys have already figured out a way to do it.
00:36:18.109 --> 00:36:29.989
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.
00:36:29.989 --> 00:36:35.389
That's not something that you could do at scale, but you could do it at a 30 to 60 unit range and is.
00:36:35.459 --> 00:36:36.659
Definitely possible.
00:36:36.659 --> 00:36:40.199
It's probably not, it's, it's not gonna be easy, but it's gonna be doable.
00:36:40.199 --> 00:36:41.249
It's definitely doable.
00:36:41.639 --> 00:36:44.549
So I think I, I take that as a great advice there.
00:36:44.939 --> 00:36:46.019
Can we talk about.
00:36:47.124 --> 00:36:48.653
You're focused on modular.
00:36:48.864 --> 00:36:52.644
When you and I were talking offline, you obviously, we touched on your project.
00:36:53.094 --> 00:36:54.294
I think it's in Valhalla.
00:36:54.384 --> 00:36:56.484
It's called Valhalla Village, if I'm not wrong.
00:36:56.964 --> 00:36:59.184
And uh, you guys are using modular.
00:36:59.184 --> 00:37:01.074
Can you talk us about that project?
00:37:01.134 --> 00:37:03.414
What are the parameters, why, why modular?
00:37:03.444 --> 00:37:04.584
How do you like it?
00:37:04.644 --> 00:37:05.604
What are the challenges?
00:37:18.774 --> 00:37:19.224
Gotcha.
00:40:05.544 --> 00:40:06.234
It, it.
00:41:03.579 --> 00:41:09.099
I think one of the things that happens, uh, has happened over the past 10, 15 years is that we kept.
00:41:09.609 --> 00:41:16.449
Adding and adding and adding and increasing the number of criteria to the pile of criteria for approving a new building.
00:41:16.899 --> 00:41:26.379
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.
00:41:26.889 --> 00:41:32.889
Is that like you're, you're trying to get everything under the sun to the perfect, uh, degree possible.
00:41:33.429 --> 00:41:34.749
But then you just can't build it.
00:41:34.749 --> 00:41:36.429
You can't get scale, you can't repeat it.
00:41:36.429 --> 00:41:39.129
Every other, every building is gonna be different than the next one.
00:41:39.639 --> 00:41:50.499
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.
00:41:50.504 --> 00:41:52.004
We can't do just, we just can't do that.
00:41:52.004 --> 00:41:52.964
So don't ask us to do that.
00:41:53.354 --> 00:41:57.284
If you're in the municipality, if you're asking us for curved corners, we just can't do that.
00:41:57.284 --> 00:42:04.349
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.
00:42:04.944 --> 00:42:06.984
Precast concrete, uh, walls and floors.
00:42:06.984 --> 00:42:16.284
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?
00:42:16.284 --> 00:42:17.724
These guys can't do it any other way.
00:42:17.724 --> 00:42:19.284
You have to stick to their criteria.
00:42:19.614 --> 00:42:25.044
And it reminds me of that old saying that no one got fired for buying from IBM because there was no other option.
00:42:25.284 --> 00:42:27.264
Like this is the option you, you buy from them.
00:42:27.264 --> 00:42:29.034
And yeah.
00:43:29.204 --> 00:43:29.564
Agreed.
00:44:24.569 --> 00:44:30.564
I, I, I think it's, it's not happening yet, and it's.
00:44:31.374 --> 00:44:32.364
It's not happening yet.
00:44:32.364 --> 00:44:34.764
It seems to be missing some political will.
00:44:34.824 --> 00:44:49.134
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.
00:44:49.134 --> 00:44:51.774
It's just when you add a thousand of them together and tried to make a.
00:44:52.494 --> 00:44:56.634
Project pencil, then that's where things go wrong because it just doesn't work.
00:44:56.634 --> 00:45:01.194
You don't have that much money to split between all those criteria that are eating it up.
00:45:01.464 --> 00:45:15.834
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.
00:45:16.519 --> 00:45:29.239
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.
00:45:29.869 --> 00:45:34.909
What would they need to have at that point in time to make them a good candidate?
00:45:34.909 --> 00:45:41.989
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.
00:45:42.209 --> 00:45:49.649
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?
00:48:00.410 --> 00:48:01.400
Let me ask you this question.
00:48:01.850 --> 00:48:12.320
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?
00:48:12.320 --> 00:48:13.100
You know what, yeah.
00:48:13.100 --> 00:48:14.300
We're in hard times right now.
00:48:14.300 --> 00:48:22.220
Markets are not, we need to be, but in 1, 2, 3, 5 years from now, this is gonna happen.
00:48:22.460 --> 00:48:24.975
Do you see any of those trends that make, that gets you going?
00:48:27.368 --> 00:48:32.648
Yeah, actually there's a lot i I am really excited about right now, I think in and broadly in the market.
00:48:32.708 --> 00:48:41.557
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.
00:48:41.557 --> 00:48:54.878
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.
00:48:55.688 --> 00:49:06.068
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?
00:49:06.068 --> 00:49:23.168
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?
00:49:23.588 --> 00:49:30.968
Take on a lot of risk, you know, articulate and underwrite very narrow margins, which you've gotta be perfect on.
00:49:31.688 --> 00:49:47.918
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.
00:49:48.518 --> 00:49:50.918
And so I think we're gonna emerge through this.
00:49:52.088 --> 00:50:08.438
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?
00:50:08.438 --> 00:50:12.548
And so I think, you know, the customer will return.
00:50:13.088 --> 00:50:18.307
Um, it's an inevitability like Canada will continue to grow at some pace.
00:50:19.793 --> 00:50:22.823
Toronto is likely to continue to grow at some pace.
00:50:23.693 --> 00:50:31.763
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.
00:50:31.763 --> 00:50:34.523
So there's going to be like a lot of work to do.
00:50:35.003 --> 00:50:39.023
Um, you know, and I think the industry will emerge more resilient and stronger.
00:50:39.503 --> 00:50:42.803
Um, you know, and hopefully also on the construction side.
00:50:44.003 --> 00:51:06.743
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.
00:51:06.743 --> 00:51:10.523
So like, I think the future fundamentals in the market in terms of supply demand.
00:51:11.198 --> 00:51:12.398
Super favorable.
00:51:12.398 --> 00:51:19.238
I think as an industry, you know, you always emerge stronger when you go, you, you emerge from a tougher period of time.
00:51:19.718 --> 00:51:26.228
Um, you know, and we're picking up a skillset that, you know, not too many people had before.
00:51:26.228 --> 00:51:31.748
So, you know, I think in that sets a table for different creativity to do different things.
00:51:32.018 --> 00:51:36.893
Um, and so we should emerge doing a lot of really exciting things I think in the future.
00:51:38.165 --> 00:51:38.945
That's good news.
00:51:39.005 --> 00:51:40.085
Thank you for sharing that.
00:51:40.115 --> 00:51:42.605
Uh, we have a closing tradition on the podcast.
00:51:42.845 --> 00:51:56.045
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.
00:51:56.825 --> 00:52:02.495
In terms of our housing crisis, affordability, and uh, it could be a change in regulation.
00:52:02.495 --> 00:52:08.255
It could be a policy, it could be a mind mindset shift, a paradigm shift, whatever you want it to be.
00:52:08.255 --> 00:52:09.635
What would that wish be?
00:52:12.443 --> 00:52:26.932
My wish would be that, uh, policy makers would recognize and prioritize housing rather than just say it.
00:52:27.353 --> 00:52:29.343
So there's all kinds of things that you can do, but.
00:52:29.993 --> 00:52:31.343
It's too much posturing.
00:52:32.513 --> 00:52:39.293
I would be ecstatic if people would just realize it was something they actually wanted to do and go do it.
00:52:39.923 --> 00:52:47.918
'cause the government can do amazing things when it wants to, and if it wanted to do something, it would've.
00:52:50.615 --> 00:52:51.095
Amen.
00:52:51.305 --> 00:52:51.695
Amen.
00:52:51.695 --> 00:52:52.745
Thank you for the wish.
00:52:52.895 --> 00:52:54.605
Thank you very much for being here, Jeff.
00:52:54.605 --> 00:53:00.125
I'm hoping that we can have a part two of this conversation in a couple years and have better news and
00:53:00.128 --> 00:53:00.428
good.
00:53:00.725 --> 00:53:01.865
conditions going on there.
00:53:02.195 --> 00:53:03.005
Thank you for your time.
00:53:03.368 --> 00:53:04.148
We'll get through it.
00:53:04.595 --> 00:53:06.995
We'll get together through it together.
00:53:07.025 --> 00:53:07.805
We're all in together.
00:53:07.925 --> 00:53:08.345
Thank you.
00:53:09.878 --> 00:53:10.268
Thanks.
