In this third instalment of UrbanToronto's The Interview series, we sit down with Lanterra Developments's Chairman Mark Mandelbaum, and President & CEO Barry Fenton. At the company's Treviso condos sales centre at Lawrence and Dufferin we talked about projects past and present, including Treviso, Burano, One BedfordÏce Condos, Riverhouse3018 Yonge at Lawrence, and their upcoming project at 501 Yonge

Barry Fenton and Mark Mandelbaum at the Treviso sales centre. Image by Craig White.

Lanterra is a relatively young company - 10 years - and in that time you have become one of Toronto's premier condominium developers. Tell us about your backgrounds and how you came to form Lanterra.

Mark: We were kicking around the real estate industry for many years. I was in the 905 area. We crossed paths about 12 or 15 years ago, and we found that we had complementary skill sets which become more evident every day. More than that, we both shared a vision that the demographics and the market were changing dramatically. We looked at downtown Toronto and saw that that's where things were going to start happening. It struck us that people were very scared of condominiums - a lot of home builders - and even the typical Canadian Dream was a house with a backyard. I grew up on that model, but the world changed dramatically in many respects. First of all the condominium legislation became a lot better. That's an important thing, the consumer protectionism. People started to realize that it wasn't so risky to buy a condo on paper and get it 3 or 4 years later. The developers in the business were by and large reputable, and there were very few cases in the last 10 years where people had nightmares with developers. That was unlike the case in the late 80's. As it turned out, houses in the 905 became more expensive, and people started realizing that you could buy a condo downtown. You're maybe not getting your own front lawn, but you get tons of amenities around, and you don't have to travel an hour each way every day. There was a very distinct and enduring demographic shift of people's perceptions. There are still a lot of people who want to buy houses, but I think that it's a paradigm shift that's here to stay. If you were lucky when we started, maybe 20% of new homes that were sold in the GTA were condos, and today it's well over 50%. We don't see that changing.

Barry: I must also say that we are cutting edge, and a perfect example is the lands between the Skydome and Air Canada Centre. I remember Mark and I went down there and said how it looked like a cow pasture. We were able to assemble and deliver it, and now there's probably 4000-5000 people living in that area because of what we created. If you look at Dufferin and Lawrence, at the time the site was really an empty parking lot with some retail on it. We took the vision and experience of our talents, and we've been able to create this [Treviso]. We've done close to 700 sales now between the first two phases in about 9 months. That's pretty spectacular.

Looking back over Lanterra's work, what are some of the challenges that you've faced in the 416 vs developing in the 905?

Mark: It's more sophisticated to sell and build a condominium than a single family home. Aside from the fact that the time frames are a lot longer, code issues are more sophisticated. We find the consumers are more savy. You'll never find a sales office like this for a project in the 905. The other thing which is very important is that you can create a lot more value in a high-rise development than you can in single family home development. Take a 100 acre site, go to the top five urban planners and say 'design it for me'. I bet you that between them, you'd be lucky if there will be a difference between a few lots or road patterns. Arterials have to go in a certain way, collectors have to go in a certain way, schools have to be here, and parks have to be there, and a house has to be this wide and this long and has to have a garage here. If you get a little cute about it you can have wide or shallow lots, and you can have a little different architecture, but you can go for unending miles of subdivision homes and they will not be materially different. Condominiums are different because you can create more value with architecture and good design. You can have two developers take exactly the same site and create totally different projects. The biggest example of that is Ïce. Ïce is adjacent to another project, and we are selling easily $200/sq ft more than it. How do you do that, and why would someone do that – buy a condo for $200/sq foot more than one could there?

What's the difference in your opinion?

Mark: It's marketing, it's architecture, suite design, it's amenities, it's all of that. A guy has 40 houses in a subdivision and he builds it as he sells it so it's a whole different marketing scheme. If you have a 500 unit condo, you have to build it in one shot. Before you can stick a shovel in the ground, banks make it so that you sell 60, 70 or 80 percent. If there isn't perceived value, you're not going to be able to sell it. They're very sophisticated purchasers. So that's what's been fuelling the market. There is a perceived value, and it's been the case the last several years. By the time someone gets the key to their condo 3 or 4 years later, they've already built a respectable amount of equity in it. You put down a deposit of 20% - say a condo costs you $500,000 - you put down $100,000, and if 4 years later the condo goes up 6% per year, which is not crazy, you've made your deposit back in theory.

Barry Fenton, Mark Mandelbaum, and interviewer Dumitru Onceanu at the Treviso sales centre. Image by Craig White.

Most of your projects have been in central Toronto up to this point, but recently with Treviso and Riverhouse you're moving into the older suburbs. What is different in building a condo in these areas versus Downtown?

Mark: Well first of all there is consistency with all projects, and that is proximity to transit. That also applies to Treviso – the subway is just down the street – and with the Riverhouse at the Old Mill it's even closer. We believe that transit is a huge attribute in choosing locations. Very different than in the 905. What we really like to do is look for niches in the market, where we're selling something that no one else is selling.

Barry: Another thing to add is that all of the projects that we build have great rental ability, and that's really important. The rental market likes being close to subways and major transportation.

You have a new project in the Yonge and Lawrence area, 3018 Yonge in Lawrence Park. Tell us about it, and the kind of buyer are you looking to attract there.

Mark: It's not like Treviso because it's going to be more expensive. It's a couple feet away from a subway stop, but it's right in the middle of a really established neighbourhood. There really isn't very much competition around there. We studied Lawrence Park. People living there love it, their kids love it, but the houses are much more traditional. It struck us that younger professionals would like to go back to their roots in Lawrence Park. Their personal lifestyles would demand a much higher quality of architecture and design. Even though early on we started with a very traditional Lawrence Park type of architecture, we scrapped that. David Pontarini introduced a very contemporary architectural design, and Alessandro Munge is doing the interior there as well. We spent a lot of time and effort on amenities and suite finishes, and we'll bring it to the market in the Fall, but I should say that there is a lot of interest so far so we're hopeful.

Barry: We've had something like 600 registrations in about two weeks.  

What kind of mix of suites are we expecting to see in the building?

Mark: There is a mixture of one and two bedrooms, but they're not quite as small as you typically find downtown. Over here you're probably looking at 650 to 700 sq ft. It's a more affluent buyer looking for a bit more elbow room, and the ratio of two bedrooms to one bedrooms is also a bit higher than you would typically find. There is a higher ratio for parking. We expect that there will still be more people who would buy parking here, even though it's very close to the subway. Because of the kind of buyer that we expect, we're investing very heavily in amenities. It's a relatively small size building, about 179 suites. We think the building will have a much higher percentage of local buyers than downtown, and those who would like the idea of fresh architecture and design.

Heritage Toronto plaque on the side of the John Lyle studio façade. Image by Dumitru Onceanu.

Let's talk about One Bedford. We'd like to know more about the retention of the John Lyle façade and the architectural integration. There have been comments on the forum from those who like it and those who don't. How do you view the façade preservation, and what was the process that led to that?

Mark: Actually, most of our buildings are touched with heritage components. Quite frankly we embrace it, and we think it's a really good idea. The city works a lot better when you don't just throw out everything from your past. The Toy Factory was a real study in that. At the Burano project where the Addison building is being retained, the architecture and theming were focused on the marrying of the two buildings. In the case of One Bedford, the fact of the matter was that the John Lyle house had a simple facade, and it wasn't really known as a famous house before the development started. It was hidden, no one really knew that it was there.

When you say heritage, there are different levels: something that is clearly very important you can't mess with; some are situations where it's not like you're trying to preserve an entire house because it was never there in terms of Toronto heritage. What you're trying to do in those cases is to pick a piece, and display it like you have a painting in your living room which shows some image that you would like to incorporate into your daily living experience. That's almost what it is.

A real heritage purist would probably complain that the only way to preserve heritage is to forget all the other developments, and just leave the house exactly how it was in its original context. I seriously disagree with that. I could tell you just as an example, we have a house in the 905 which is a provincially significant heritage house, and we had lots of discussions with Brampton. The only way to make that house become part of modern life is to make it work for modern life. In that case, we fixed it up, put a lot of money into it, and we're selling it as a totally renovated house. If you were to take a heritage house which serves no purpose in the middle of a project, and thereby totally doing screwy development around it where the tail wags the dog, you're going to end up with crappy development and you're not going to do anything for heritage. So it depends on the situation.

In the Addison case with Burano, the façade is sitting exactly where it was and it's very authentic. In the John Lyle house, even the preservation board didn't think that we were going to have a house that looked exactly like it was at the time. The way we resolved that situation - I believe successfully to most people - was to take the façade and incorporate it into the building which I think Bruce Corban did a great job of, and there is now a cafe with a patio in front of it. Inside will be the original fireplace, which is really representative of John Lyle. What was important was that for a period of time, the Group of Seven and a lot of Toronto intelligentsia met in his living room and sat around that fireplace, so we rebuilt that fireplace, and people will be able to sit around there and it will be an experience that people will say 'You know what, a long time ago there was a person John Lyle, a famous Torontonian - very artistic and creative - and he would hang around with his buddies', and it's kinda what it looked like. So it's going to become part of the vibrant Annex life. Anyone who would like to argue the point can sit around the John Lyle fireplace and argue it now like they would have 100 years ago.

Some commented that it was when trees arrived in the courtyard that it all came together: the façade needed something at human scale to incorporate it.

Mark: That project was actually the first time where we did a tender proposal call for landscape architects because it was a challenge to figure out how to do that side exactly right. We ended up with a guy named Bruce Corban [of Corban & Goode] whom we had never used before. He had done a lot of heritage kind of landscaping work in Toronto, and particularly in the University of Toronto area. We think that he did an amazing job.

John Lyle's original fireplace, reinstalled in the new Starbucks Coffee shop. Image by Dumitru Onceanu.

Images of some of John Lyle's work above the mantlepiece. Image by Dumitru Onceanu.

How is the courtyard going to be used? Will there be a usable front door on the heritage facade?

Mark: No, they're not going to go through that door. Technically they could - the door opens and closes - but because of the way it's designed, you have to go up a few steps and then go down a few steps. Starbucks will actually be putting a boardroom table behind the door on the inside, and will be keeping that door closed. The courtyard will be for both Starbucks clients and the public.

Let's talk about Ïce. Tell us about your plan for the street realm, courtyard, entrances and retail. What will pedestrians experience when they walk to and through the complex?

Mark: Well it struck us that for almost all of our projects, the public realm component is very important. I guess Ïce is really the largest example. It came up in a number of ways, the initial discussions we had with people in the area, and their own understanding of the area and how it functioned. A typical condo downtown is 500-600 sq ft. This goes back to the European model. People don't hang around their apartments more than they have too. They are living on the street. That's what makes the city of Toronto terrific downtown. You go to any European city, generally speaking, a person will come home, put down their hat and jacket, put on a polo shirt, and will go to the pub downstairs to have dinner. People don't have cars, will take transit, and can walk everywhere. Toronto is never going to be like Munich, or Zurich, or Paris, because we still live in North America, but there are spots where you can emulate that, and those spots are going to be very attractive places to live. We like to do that. One Bedford is like that. It's got a small public space. You go out of your house and there's a Shoppers downstairs, as well as a Starbucks. You walk down the street and there's a couple restaurants and bars, a couple places along Prince Arthur where you go hang around and see everyone. It's absolutely incredible. In Ïce, we hope that's what's going to happen as well. It's a very large spot, an acre. It's open to the public. There will be a major public art installation. We're currently choosing it through a jury process. It's going to have a water feature. It's going to have trees and will have Canada's largest green roof on top of it. It's going to have stores at the base. Then it's connected to the PATH. Across is the Longo's downstairs. We created a community within a community. This was the proverbial hole in the donut, the space between the ACC and the Rogers Centre.

Barry: We did the same thing at Fleet and Bathurst. We bought all of that land from Molson's at the time. Same thing, we were able to create synergy and that whole area was transformed.

Tell us about 501 Yonge. Is there anything you'd like to share with us at this time?

Barry: We have the application in the city for it, and we're very excited about it. We really love that whole area, and again it's an area that needs improvement. We kickstarted development in that area by building a project at Wellesley and Yonge and it was successful next to the transit. This site is literally going to be sitting on top of the subway, so we'll be doing above-grade parking instead. It's going to be similar to our Murano project where it's two towers on a large city block.

Barry Fenton with interviewer Dumitru Onceanu at the Treviso sales centre. Image by Craig White.

There has been some debate on the forum about the elevation drawings that were posted on the site. Are we expecting that to change as the project unfolds?

Barry: Well we're going to work with the community and with the councillor in the area to make sure that people are satisfied and I think that's an important point because we just don't come in and put in an application and say 'If we're not successful we're going to the OMB', that's not our style. We want to get reaction and comments back from the community. Truth of if is, when people see change they're not crazy about it, but that changes hopefully, and usually, for the better. We've been doing this long enough to know that we have to be respectful of our neighbours, and we'll do what we can.

Are you very hands on with the design as well?

Mark: We have a team that work together very well, but for every one of our projects we like to come up with a central marketing theme, and have that theme be infused in every feature of the building for it to work. You don't just give it a name like Treviso and throw some Italian stuff in the sales office. You have to make sure that the project carries forward the theme as well. Whatever you choose, whether it's Ïce – a Scandinavian theme – or Maple Leaf Square which is a sports theme, that it permeates everything: the design, the amenities, even the architecture of the building. A purchaser comes in and sees that they are not just buying a home, but it's a home with character, personality, it has identity and resale value because the market knows that it's a special building.

Will there be Italian inspired retail as well to match the theme of the Treviso complex?

Mark: We haven't yet started renting out the stores, but we designed the area for it to very much function as an Italian town. Particularly the second phase where there is a piazza in the middle. We do this quite often, that we actually go as a team – our marketing and design teams – to wherever it is that we're trying to emulate. For Treviso, you can see pictures all over the place of what we saw. If we were to see a cafe over there with a beautiful patio and how it functions with the street, or colonnades, when we came back we incorporate a lot of those features into the design of the building, and you can see that in the model suites and sales centre. At the end of the day, we hope that once it gets built and people start to live in it, that it will actually behave with that type of lifestyle.

About themed buildings. What was the difference from projects that are clearly themed like Ïce, Maple Leaf Square, and Treviso, versus your earlier projects which aren't as overtly themed?

Mark: Well actually all of our projects in some way or the other are themed. Some are based on a geographical premise. One Bedford was themed with the fact that it was located at the tip of the Annex. Just as an example, when we opened for sales, there was another project in Yorkville that was selling against us, and it struck us correctly that the kind of people who live in the Annex are a bit different than the kind of people who live in Yorkville. For a large part, there is a lot of intelligentsia, they are more into books and arts and theatre, and when we designed the sales office our marketing theme really addressed the fact that the building was in the Annex. There was a certain flavour in that building that was markedly different than for a building that you would find two blocks away in Yorkville. So in that case the theme was geographical. Ïce didn't have any geographical connotation when we designed it. It struck us that because of the site geometrics, it had a Scandinavian type of feel to it - the shape of the buildings - and then we built on that. Although it is very noted and established around the world, there was no building in the City of Toronto that celebrated and showcased Scandinavian design, so we embraced it. We added more touches to the building. So for that we went to Copenhaggen and Stockholm. We got a lot of ideas and we brought it into the building and then we sold it and it's been successful.

Do you foresee new challenges coming for Lanterra, and the development industry as whole in Toronto, going into the future?

Barry: The whole philosophy of owning a house versus a condominium has completely changed. In the old days, you'd have 10% of people buying condominiums and 90% of them buying houses in places like Brampton and Milton and Cambridge. That whole philosophy has changed whereby today you have about 70% of people purchasing condominiums and 30% buying homes. Even from a price standpoint, it makes better sense to buy condos as opposed to houses in most cases. What I believe is that this business is here for the long haul. You still have to be respectful of the price, you have to be able to provide great product in great locations, and that's what we do.

UrbanToronto thanks Mark Mandelbaum and Barry Fenton for sitting down with us in August!

UrbanToronto has dataBase entries for all Lanterra projects now, several published for the first time, and yet blasts from the past, like Toy Factory Lofts, Waterparkcity, and more, while others like Ïce and Burano are amongst our most visited. We have two to recommend in particular: Treviso, which currently features several views of Treviso II, currently being readied for its upcoming public opening, and 3018 Yonge with a long list of new views to drink in. Peruse the extensive list below to view any or all of them, or choose the various associated forum links if you would like to get in on the discussion. And – let us know your thoughts regarding this interview by commenting below!

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