The first of a two-part interview with Shelley Fenton of Reserve Properties. Part two follows next Thursday.
Shelley, we want to learn a little more about you and the company. How did you get your start in the development industry?
I've always been enamoured by real estate. It's something that's been in my blood. I'm a lawyer by profession and graduated with a law degree from Western. When I came back to Toronto I articled with one of the large firms that specializes in real estate and securities. I joined CIBC and did a combination of strategic financing and workouts, and many of those workouts were real estate related. I specialized at the beginning of my career in solving problems in the 1980s period during the recession. I started in tough times figuring out how you deal with those situations. I loved solving problems around real estate, and creating special events associated with an area I was extremely fond of. I started in the industry in 1981 and here I am 30 years later working on our 88th project.
How did the recession of '81 impact the way you do business now?
You learn from the experiences that you work through, and I've lived through three recessions. The long and short of it is that real estate has a tendancy to go up. Sometimes the ladder climbs more quickly, sometimes it levels off, and sometimes it goes up again and you have to be very sensitive to the possibility of a downturn and plan your involvement in the marketplace accordingly. If you have a long term perspective on the marketplace you will be very successful. If you have a short term perspective on the marketplace, if you're in an up market you'll be fine. In a sideways market you'll be fine, but you have to be sensitive to when things are possibly slow or when there's a downturn. It gives us the ability to look at life realistically and be sensitive to acquiring strategically well located properties. For the long haul, if you make strategies of investing in real estate with good property in mind and good locations in mind and the needs of a specific community, you will be successful.
Given the hot market right now, is it becoming more difficult to acquire properties than it was five or six years ago? What's your impression of the status of the market?
I think that more people are clamouring for more properties. The number of available sites to build on in the city are fewer than thay were 10 or 15 years ago. You have more people interested because of the strength of the real estate market in these properties. There is always the ability to take and redevelop one, two, or three properties in association with each other. Let's use Rise as an example. Here we are sitting at the corner of Bathurst and St. Clair. It's a great location for people to live. It's a great location for people to come and just hang out, so it becomes a popular place in this particular community, and as a result of that, Rise is in demand.
We went out and acquired three properties to combine. We bought a site from an entrepreneur developer, we bought another component from the City of Toronto's parking authority, and the third was from the church. As opposed to just picking up your pen and making an offer on something you see as being advertised for sale, we knock on doors. We seek out what we think is strategic and lovely and a great place to live, and with that in mind you're not competing with dozens of people to pursue those properties, because you are in pursuit of what you consider to be your desired property. We let people know how capable we are as an organization, and people wrap their arms around what we have been able to achieve. We have had a level of success with people who own those properties saying 'yes, we'll sell to you, we're prepared to make that decision'.
Before we discuss your projects individually, how does the Reserve Properties story begin? You said it has been 30 years and 88 projects?
I worked with a couple other folks focusing on solving the problems for institutions. Institutions had tracts of land, buildings that were partially finished that we came to look at and said 'here is what our vision is for this to create a winner'. We started by focusing on developing properties that were developed by institutions because we were in a recession. People had not made their payments, we were in challenging times, so we brought our vision to those problems.
Trying to restructure their properties?
We started by restructuring, and then the market became good in '83, '84 and '85 and Toronto was humming along. We became enamoured with other parts of the country that provided opportunity so we were actively involved in developing properties in Vancouver, in Montreal, and in peripheral cities outside Toronto like London, Belleville, Peterborough, areas that are within the Toronto corridor. We have actively been involved in developing property in Ajax, Whitby, Scarborough, North York, many of these locations and municipalities are part of the consolidated Toronto marketplace.
You said you started primarily in institutional, so by that do you mean commercial space?
No we were primarily invovled in doing mixed use properties that were residential, but we were talking about institutions having to take them back because of problems where they had a portfolio of loans that were outstanding and not in good health. We came in to solve those properties for them. We acquired many of those properties from them and developed them. I started building homes in small town Ontario through a company called Peterborough Lumber.
Single family homes and townhomes?
Single family homes and cottages, and that evolved to condominium projects. That evolved to mixed use projects, and along the way we have looked at some very fascinating properties that have been all retail. We were actively involved for coming up with a solution for Faubourg in Montreal which is this mixed use retail project right at Guy and Ste-Catherine right in downtown Montreal. We have actively been involved in several retail projects in Toronto and we specialize in infill sites, like buying the corner of Queen and Carlaw for example, where we built a Shoppers Drug Mart with a medical centre on top. We built another retail centre and created a retail nexus with a condominium in the Beach, so we took a church, converted the ground floor to retail, and there will be 29 lucky people who own condominiums in that building.
That's the Bellefair right?
Yes, and it's been a phenomenal project. I would say that it's been one of the more unique projects that I've worked on because you've had to keep the church structure in order to maintain ties to the community's history, but at the same time try to create something that's modern and new, and very special for the neighbourhood. You're trying to balance all those things, and we think that we've accomplished that with the Bellefair.
What have been some of the challenges in incorporating the church into the project?
I would say to you that if you had just a fresh canvas, it's very easy to design what you think should go into the location. On the other hand, when you're dealing with an existing building, every unit was different because you have to deal with the uniqueness of the existing structure, for example the windows that were placed in that particular building. Although we did open up the window areas to enlarge them, the majority of units were all unique. It's not just about having square footage, it's about having square footage utilized efficiently and effectively so that if you've got a window over here, though you would have said 'that's not the best place for a window', you still have to make it work. You're also dealing with a building that was built 90 years ago. You want to make sure that it's still strong. From a structural perspective in the Beach, you had to deal with the fact that the water runs underneath, so the soil conditions in the Beach area is very different than where you hit bedrock in a drier location. You're dealing with all those complications, you're dealing with building within the city which is also a complex situation because you want to maintain the integrity of working efficiently and moving your project along, but at the same time understanding that the community continues. People are walking by your door and cars drive by your door so you're balancing building in an area which is also populated. So we do that - it's part of the process in being an infill builder in the city - and you live with that.
Is the actual structure of the old church remaining in place while you construct behind it, or are you removing the facade piece by piece and putting it back later?
We're keeping the actual church in place, and what we're doing is changing the level of the floors. Essentially what we're doing is we're putting in a new ground floor, and the floor that might be three or four feet above it we're removing after we put in the new floor. Then we're putting in the second floor while removing that other second floor which is at a different level, so we're essentially building a building within a building.
So all four walls are being maintained?
We're keeping three walls, the front and the two sides. We've opened it up in the back, because we're enlarging it in the rear on the north side of the property to incorporate part of the new space of townhouses that we're going to build as part of the project itself.
You mentioned tricky soil and groundwater conditions. How difficult is it to excavate?
You can excavate, but we've had to use special support - helical piers - to ensure that we have integrity for the foundation. As a result of that it's not a situation where you dig down to bedrock and put in your conventional foundation. In soil conditions where you have issues in water and mushier soil than in normal situations, you really have to be sensitive to ensuring the integrity of your foundation. Then when you have to do that in tandem with keeping the structure of the existing building, it makes a more interesting challenge for you.
For Bellefair, Lakehouse and Motif, you went with the same architect and interior designer. Tell us about the choice to go with RAW deisgn and II by IV. What made you confident to go with them?
We are very sentitive to looking at every project as one onto its own. As a result of that you then determine who is your best team to work with. Having been in the industry for 30 years I've had the benefit of working with a number of tallented people. Roland Rom Colthoff at RAW is a very capable architect who focuses on downtown lifestyle, and he is very good at these midrise buildings. Funky, midrise, in an area that needs to have a recognition of the history and the architecture around it, is something that we pride ourselves on. Roland is also sensitive to that kind of thing. The interior designers that we're using – II by IV – are very tallented and have done work throughout North America. They really have a good handle with that's going on downtown. They have a feeling for the Toronto lifestyle. We're sitting in a beautiful model suite they designed, geared to the lifestyle here at St Clair and Bathurst. The model we designed on Ossington or in the Beach is a reflection of the lifestyle that we're focusing on and who we're catering the building to, so we've brought in capable people to focus on that. So while Roland has been working with the midrise projects that we specialize in in the dontown Toronto marketplace, the folks that we've used here at Rise are a fascinating company, and they're doing a lot of the major downtown projects. Enzo Corazza [of Graziani + Corazza] has done a great job for us designing this project with a contemporary, hip statement, but we've been very actively involved too. My son Shane and I in particular have been very hands-on in dealing with our architects and our professionals on a day-to-day basis. We say 'here's what we want', they create that concept. Then we look at it again and say what about this what about that, these are the changes that we consider are important for us to do, and that's what we do. It's really a design in process, and we then say 'yeah, we've got it.'
How long might it take you to go through this design process from the moment that you decide to hire an architect, to when you're comfortable releasing the plans to the public?
We start with looking at something and taking it from our perspective saying 'this is our concept, we love this', and then say 'this is what we think'. We then give it to the architects, and it's a process of several months. It may be from start to finish a six month process, and then you also have to be sensitive to the input of the planning department. Now all of a sudden you may think we've got it perfectly, but planning comes in and says 'what about this, what about that, what about these setbacks', all sorts of issues that may crop up that may change your thinking for that particular project. Then you have to deal with community, so we sit down and talk to the community and say 'here's what weve designed' and they may say 'could you consider doing this', and we'll take a look at that to be sensitive to their input. Sometimes you can, and sometimes you can't and sometimes it doesn't make sense and sometimes it does, but you're always continuing to work it along. Then you come up and say 'bang, we've got it', and we think that's what we've been able to do with all the projects we've worked on, but it takes time and it takes being respectful and considerate of a variety of people who have different interests.
Right now you're working on three midrises and one highrise. Is any one of them more difficult than another? Is it more difficult to work on the midrise infill, or is something like this more difficult because of its height and its implications?
I would say that every project has its own level of interest and its own level of involvement with the community. If I had a blank slate with no one telling us what to do, we know exactly what we would create for that location, but it's a matter of working with whose other interests are being considered. It's not whether it's a highrise or midrise. It's about what you're doing for that particular area and whether it's synergistic to that particular area. So the more creative you want to be and the more out there you want to be, you're going to have to be more sensitive to the feedback of others. If you're taking a corner like St Clair and Bathurst where there's 25 storeys approved across the street [St Michael's land/gas station], 23 storeys on the other corner, if we were asking for a 60-storey tower then we could be challenged, but if we're asking for something that's 25 storeys on the south east corner, that's very reasonable, so that's how you have to look at it. How realistic are your expectations and we're trying to be realistic.
What stage of the process are you at now for the request of 25 storeys at Rise?
We've gone through a process where we've met with Planning 7 or 8 times before we filed our application. Then a number of months ago we filed our application to build the project. We have taken into account their comments. With that we are now getting involved with some community meetings to get their input, and we've been in touch with the councillor. Collectively with the councillor we will go to the community meetings and we'll go back and forth and hopefully we'll create something that everyone wraps their arms around and says 'we're in'. Quite often projects require a process of rezoning or committee of adjustment or an official plan amendment depending on what you're dealing with in a particular location.
Do you think that this process will have any effect on the design of the building? Might they require design changes?
We'd like to think that the design will stay status quo. The issue of height - will you be 21, 25 or 27 storeys - that will be determined. From a practical perspective you look at the model, you'll see that the building whether it's 23, 25 or 27 storeys will have a similar feel regardless so that we think that at the end of the day we'll have a project that was conceived which will be pretty close to what we have right now.
For your three infill projects, the mix of suites are all trending towards larger square footage. At Lakehouse they range from about 550 to 1800 sq ft. For Motif from about 680 to 2400 sq ft. Tell us about your decision to go to that market, and what kind of demographic or buyer would you like to attract there that may or may not be different from what you're looking to attract here.
I can tell you this, that every area is unique unto itself. So when we're catering to the Beach - which is an area that I just love - what you have is a community that's been there for a long period of time. There has not been a lot of change, and there is a lack of condominiums in that area of the city. Then you say to yourself, 'who are the people that are wanting to live in a condominium' and you have a lot of people who have had real estate that is very valuable, and those people who own that real estate are now saying 'where do I need to live'. A lot of these people are 70+ year old people who are downsizing and need a condominium lifestyle. These are not first time buyers. They're people who have a lot of stuff that they've accumulated over the years and they're fortunate enough to be able to afford to pay a reasonable price for their condominium because they're going from a house to a condo. It's a price driven issue, and it's who are you catering too. Also, we found that in the Beach there are up-and-coming young urban professionals who want to live in the area, close to family, and buy their first home there and start a life. We went for good quality that reflected that people could afford to pay a reasonable price for what they're getting, and we catered a significant number of the units in the form of six townhouses. We also created about 60% of the units as single bedrooms to cater to the young urban processional, and the person who wanted a smaller place to live. They might have a cottage that they're going to spend five days a week at or three weeks out of every four, so if they're doing that they don't need a large condo in the city. Our demand was focused on the needs of the people in the area, so we catered to a combination of downsizers and young urban professionals in that particular market.
When you go over to Ossington you've got Motif. Motif has 29 units; 5 townhouses, and 24 condo units. Behind that we're building another 4 townhouses on Givins Street and that's a great little project. With that we've recognized that families live in that area so we've created the townhouses for families. The young yuppie who wants to live and enjoy the lifestyle of what's going on in the Ossington area - the new restaurants, the new bars - we have a lot of young people who want to live there - they're typically looking for a 1 bedroom or a 1+ den, so that's what we're focusing our attention on there.
Join us next week as we continue our conversation with Shelley Fenton on infill projects, amenities, as well as the design and neighbourhood of Rise Condos.
|Related Companies:||Baker Real Estate Inc., GCB interior architecture inc., Graziani + Corazza Architects, Live Patrol Inc., PMA Brethour Realty Group, RAW Design, Reserve Properties|