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Welcome to this Exclusive "Build the Missing Middle" Podcast Mini-Series
Hosted by Dave, Kartik, and Jimmy, this series introduces our power team, provides up-to-date resources, and assists our community of Missing Middle developers by navigating today's ever changing landscape, and dedicated to creating a positive impact through contribution. We also aim to help educate and ensure transparency for our current and future passive investors.
Let's get.
Welcome to this private
and exclusive Build the Missing Middle
podcast mini series.
I'm Dave.
Joined by my co-host
Jimmy and Carter in this series.
We're excited to introduce you
not only to our powerhouse team,
but share up to date resources
and insights
and connect with our community of missing
middle developers and consultants,
all while providing transparency
for our houses investors.
With the current housing crisis
impacting us all.
There's never been a more opportunistic
time for us investors and developers
to step up and make a real difference
in our own communities.
So let's get started.
All right, everyone,
welcome to the pregame.
We got all three of us
here, Jimmy Carter and I.
And we're going to share some insight
where we think is really important
before we get into our interview
with Adam.
So Adam is one of our key team members,
and I'm super excited
to share it with all of you.
And, really kind of dive into the details
of how he
explains his process and his experience,
which is a huge thing for me.
And obviously, coming from a Rick, risk.
Management
standpoint is just as vast experience.
He's got over a billion
in construction experience.
And he's also a second generation.
And what one thing that I noticed
when we first talked,
when you guys were introducing me to him,
was that he has, a different skill
set of actually taking on large projects
and small projects that have maybe gone
sideways or struggling.
So that is a huge asset
and skill set to bring to the table
as opposed to, you know, traditional
starting from scratch.
So it takes a a different perspective
and knowledge base in my opinion.
And actually that was a sense of security
and almost hedging the risk for
seeing things.
Or maybe some flags
before they even happened.
That's one of his big things, is talking
through the project
from start at the beginning,
well before even, you know,
you know, after we talked to the planner,
talk to him and see what,
what he foresees as issues.
So that was a big one.
And that's the reason why I call him
the Wolf.
But, we'll we'll go the next one.
What do you think?
Yeah.
So from an engineering standpoint,
you know, the value of Adam and his team.
You know, Adam, has a development company
and does a lot of development himself.
You know, the main
aspect of the businesses
is construction management
and, you know, having a strong
construction manager
on your team, like Adam is,
it's such a blessing, you know?
So from,
you know, managing our consultants
and making sure that our drawings
are progressing the right way,
you know, to making engineering decisions
that we may not be aware of.
Right?
So at one point,
you know, we thought that we wanted
to build our building with ICF and,
you know, with concrete and, and,
you know, with steel and all that stuff.
And, and, you know,
we value engineered that down to a wood
construction, and,
you know, no steel in the building.
Right.
So having somebody like Adam, who's gone
through the process and understands
how much things cost was valuable
because these are decisions
you need to make at the very beginning
of your design, right?
You can't you can't design a building
with concrete and steel
and then submitted for a building permit
and then go,
oh, shoot,
this building is way too expensive, right?
So having Adam guide us and coaches
through the process from the very
beginning allowed us to ultimately
get to a point where we're building,
probably the most cost effective,
values,
you know, in, in the province, you know,
so I think our buildings are,
are probably the best
and the cheapest as they can be.
Yep. Great points.
Kartik and Dave and
and from an operational standpoint,
this is, this is my bread and butter.
And I love how geo focused does it.
The mike Mike's our, our manager on file
and, and,
you know, in terms of operations, they get
they get all the, consultants on board.
They review all of our, contracts
before they go out.
So they, they, they have experience,
you know, basically what everybody said
already navigating and foreseeing
all the risks before they happen.
They have a bird's eye view,
from of of what's going to happen
before it actually happens.
So that's big in terms of a decision
making, risk mitigation and,
hitting all of our,
our targets on time under budget.
All the,
all the calls always have action items
and we follow up on them and things
get done on time and under budget.
So, so the value of having Adam and Joe
focus is,
is definitely invaluable right now.
Yeah.
No doubt.
And you know, Geo focus
has been, a key player in our process.
And just,
you know, one of the biggest things too,
I should have mentioned is just
literally reverse engineering
our whole scope of work from day one.
And I think,
you know, walking us
through every single detail and line
item has been a huge, huge eye opener
for me in a sense of construction,
because, you know, there's nothing better
than to leverage and rely on people
with with decades of experience.
So, that's exactly what we've done.
And, they're on point,
and we're excited to share with you,
Adam, from Geo Focus.
Gives.
All right, guys, welcome to Build
the Missing Middle podcast.
We're here I got Jimmy,
I got Kartik, and we got Adam.
So we're excited to have this episode here
because Adam's a
a key part of our team here.
We're excited.
We're
excited to have you part of our team.
But also we know the importance
of having a solid construction
process and management system in place.
So first off,
why don't you just introduce yourself
or your background
and we can get rolling from there.
Yeah, I'm
Adam Altobelli from the Geo focus group.
Current acting
president of the Geo Focus group.
I've been with the company since 2000.
First decade or so of my career was taking
over projects that had gone sideways.
So it's given me a very unique,
ability to foresee some of the red flags
that come up here and in here
with development and construction.
I became president in 2009.
And a lot of what we have done since
has been in that multifamily Issi sector.
And as they say, that is it.
That's that's history since, since I took
over, became part of the geo focus group.
It was funny when, when Cardigan
Jimmy were telling telling me as I came on
a little later, who was taking control
of our, construction.
My my nickname for it was The Wolf.
Have you ever seen the, Pulp Fiction,
where
basically the wolf comes in
and kind of takes care of all the scenes?
I feel like that's your background
in the construction world, which
which is a huge asset, as you could,
you know, I can only imagine and do know,
you know, when you can come in
and take care of situations
or construction projects
that are having issues.
And it's I think that's a huge asset.
Can you kind of like
talk about that side of the construction?
Yeah.
Whether it's fortunate or unfortunate,
depending on what side of that coin
you're on, it does give us or myself that
unique insight into what can go wrong.
So from,
you know, with that said,
and from that perspective,
I've been engaged at various cycles
or stages of the construction
and development lifecycle
from its earliest site selection
all the way through to post construction.
You know, construction
and development can go wrong everywhere.
And it's not just at the beginning.
It's not just at the end, it's
not just in the middle,
but the majority of of our retainers and,
and my participation in projects
that have gone sideways
have typically been at that 50% stage.
It's it's a nice number for owners
and developers to realize they've paid,
you know, 75% of the project
that they've only received 25% of it.
So from that perspective,
and our involvement, it's quite varied.
And it's given us that ability
to kind of work things backwards
and for our clients and even for ourselves
in our own multifamily projects.
We'll always go backwards,
the root cause of those problems and,
you know, try and avoid them
for ourselves and for others.
Well.
And you
guys have done a lot of large projects,
can you kind of touch on some of
the big ones or maybe not even big ones,
but just the type of projects
that you guys work on?
Yeah.
So a lot of it,
like I said, has been in that multifamily
and Eisai, one of the flagship projects
we've been a part of
has been the Randall Residences.
And Oakville was an ultra luxury,
condominium development, mixed use.
We've been involved in flagship hotels
such as the Novotel Toronto,
Vaughan, community centers.
So what have you.
And in, in the various sectors
of the construction lifecycle, typically
when projects go wrong,
they're not always in that same specific
kind of criteria of single family
or multifamily.
Luckily for us, we have that varied
expertise and personnel
in-house that can jump
on those various types of projects.
But from a size and scale perspective,
it's been everything from single family
homes up into projects
that are in excess of $100 million.
Nice. Nice.
Did you guys end up seeing some of those?
Jimmy Carter, did you guys go to those
or are you just more familiar with what?
Yeah, actually, Joe drove by.
And the Oakville project.
The Randall project?
My wife used to work around there, and,
she said, hey,
I actually know that building.
I walk by that building every lunch time,
and I see how beautiful it is.
And when I when we first met Adam Park
ticket I in the office in the background.
It was it was that project
on our screen in the back.
And that's where it's just, a key,
key piece of artwork
in Oakville that we drive by
and we look up in the.
Now that we know you
and what you've been able to do there,
it's like you just admire that building.
So I've seen it. Yes. It's beautiful.
And to add to that,
I would say that Adam and his team
have developed an expertise
on the missing middle
side of things. Right.
So they've really been I would say that
they're probably the leaders,
you know, definitely in Ontario,
but probably in the whole country.
Given how new this whole phenomenon is,
you know, Adam and his team
has developed a unique expertise.
And so they've got a lot of these 10
to 50 unit projects, on their belt.
So for for front, for runners.
And in this missing middle movement that
we've got going on, I appreciate that.
Yeah. Know for sure.
So let I kind of want to focus on now
we'll just kind of pivot a little bit
just more.
So the importance
of having good construction management.
And I think that was one of the key pieces
that we discussed about with cardigan,
Jimmy and I, about having key people
on our team to be successful
and what it is that we're doing
and why we're actually kind of sharing it
with the world now is sharing our team,
because I think we went through a lot of,
you know,
trials and conversations
with many people to figure out who
we were going to have on our team.
And so what should investors
and developers
look for when building their construction
and team in general, in your experience?
I, I always kind of read it back to you
when we look to build our own team.
So it's kind of the ABCs
of, of team building.
So number one for us is availability.
Availability is the best ability
if you're chasing your consultants,
if you're chasing your,
you know, legal experts,
financial experts, you're not going to be
in a great position.
Everything in development is time
sensitive.
There's not much that you can wait for.
And sometimes those decisions,
you know, the difference between
making a decision yesterday and today
can have quite the impact on a project.
So the availability is number one.
When we're looking to build a team,
we need somebody that's responsive,
and available to answer and address
those concerns or issues as they arise.
The next
one is build the best team that you can.
So, you know, the B of the ABCs
is the best personnel that you can.
You know, money can buy.
You want to put together a strong team
that's able to fill
the gaps that you don't have.
If you've never built a multifamily,
purpose built rental apartment before.
You want to build the team that has been
there, that's built it from the ground up.
And that's an important part
of the process.
You know, a lot of clients come to us
and we go through that process
of going through an RFP
and putting that team together.
And sometimes it's cost.
So they want to go with the low bid.
But we tend to look at everything
holistically,
you know, if they're not available,
but they're the lowest bid.
And we may want to revisit how important
that low cost is versus
how much it's going to cost you.
So I'm not having the ability, to make
those decisions
as kind of as you go forward.
And I think the last important part for us
is communication.
We have to have strong communicators, no
misunderstandings and construction there.
Inherent there are systems and processes
that are put in place
to avoid those types of things
and lack of communication.
I find, especially in projects
that we've taken over,
has been has been an issue for sure.
Man, that's got to be 100.
Could go ahead.
Sorry about that.
I, I was going to say that.
Adam, could you describe the process
of when a construction manager
typically gets involved,
what the roles and responsibilities are,
and just explain how you know what
how your expertise fits
into the entire development
equation for sure.
So I think from that perspective,
especially in the last few years,
we've been retained
as early as we want to build something.
We don't know what to build.
Can you help us?
So a lot of what we get,
especially lately, has been people coming
to us, developers,
investors bringing us projects
that unfortunately just don't make sense.
You know,
they acquired it at the wrong price.
It's not the right zoning.
The timelines aren't there.
You know, everything has to be looked
at holistically.
So more often than not, especially lately,
we've been brought on as early
as putting together
the criteria of what you should look for
in a parcel of
land to execute your vision.
And from there, it's building that team
on making
sure that we can find those opportunities,
that those parcels of land,
we can perform the due diligence required
to make sure that that parcel of land
is going to fit
what's required to execute your vision,
and then make sure we have the team
in place that can design it,
get your approvals, entitlements in place,
and then flow
right through on to construction.
And then I think with our development
experience,
aside from the geo focus group
and just myself as a developer
is understanding
the impact of every decision
that's involved in building a purpose
built
rental multifamily development.
Every decision has an impact,
whether that decision is a day, a week,
a month, 10,000 hundred thousand dollars,
you have to consider the the impact
that every decision makes,
or even the lack thereof.
If you don't make that decision
today, what's that impact?
And I think that's where we come in
and are able to
hopefully open our client's eyes,
and bring in the team that can help
put forth the importance
of some of these decisions
to make sure that they're made
at the appropriate times.
Keep going.
Kartik, you got some good
follow up questions on that one.
Yeah, I do, I do.
So I do have a lot of follow up
questions. So,
you know, you mentioned the importance
of assembling a team.
Where do you think developers often
go wrong?
You know, I've,
I've heard you kind of talk about
building a good consulting team.
So these are, you know,
people that are involved very early on
in the planning stages of your projects.
You know,
what types of stuff do you look for
when you're trying to assemble a team?
And can you speak to
the importance of that team?
That's a tough question.
And it is.
I know we've talked about a number of
times, especially in some of the projects
that we're involved with,
that are were takeovers.
Sometimes developers build a great team.
They're all reputable consultants.
But I think kind of going back to my ABCs,
you know, were they as available
as they needed to be?
For a lot of them,
did they communicate some of the issues,
whether it was early or late?
That would have had that developer
kind of take a step back and reposition
themselves, hopefully not gotten into
some of the problems that they got into.
So at the end of the day,
what I always look
for is putting together
teams that have built.
If I'm working with an architect,
I want one that's built something similar
and not just for their clients,
but hopefully for themselves.
There's a big difference
between spending someone else's money
and understanding the impact and the pain
of what it feels like for that
wasted dollar to go out of your pocket
and into a garbage can.
And I think that's
a big component
of putting together that right team.
You need to find team players
that understand the importance
of, of those decisions and the costs
that are associated with them.
Yeah. Yeah. Exactly.
I mean, you know, as you know, Adam,
you know, good consultants are are,
you know, generally more expensive than
some of your typical residential guys.
So, you know,
justifying the additional cost up front.
Right.
Sometimes, you know, sometimes
you have to make those hard decisions.
But and, you know,
I think in your words, you know,
spending those costs upfront saves you
a lot of dollars at the back end.
It does.
And like I said, it's not your dollars
and cents is true.
Like some
some of the lower cost consultants
not to say that they're lower cost
or to demean them,
they're just in a different category
of project that they deliver.
They may not have,
you know, a team of 15 or 20 behind them.
They may not have the overhead expenses
that a larger consulting firm may have.
But on the flip side,
that doesn't mean one that does
is going to be able
to solve all your problems either.
And in one recent example,
we had one where a developer
put together
a great team from top to bottom.
They were all the right consultants.
I just don't think they fit well.
Communication issues, availability issues.
And at the end of the day,
we had to scrap an entire design
that was about a year in the making,
and in about six weeks,
we were able to come up with a design
that was about 30 that yielded about 30%
more value for the developer.
So, you know,
while they were able to make that up
and we were able to get involved,
I guess sooner rather than later.
Yeah, expensive.
And it's not going to be the cheapest.
It just has to be the right team.
Absolutely.
I want to take this up for you, Dave,
to kind of talk
about the construction process. Yeah.
One of the big questions, and I know
this is maybe a more in-depth question
for you, Adam, so you can kind of
walk us through some, some,
you know, stages
or steps that maybe you visualize
or you take us as a construction manager,
but essentially walk us through the steps
you take from first sitting down
to investors who are developers like us
all the way to completing the project.
If you can summarize as best as possible
so people understand
who are listening to this. For sure.
If we're getting involved
at those earliest stages,
we're sitting down trying to come up
with what your vision is.
You know, are you trying to build
a 400 unit apartment building
or a 40 unit or a or for you?
So that understanding what you're
trying to achieve is, is important.
So that's our number one step.
And from there we
we build on that to put together
the right team to execute that vision.
So that initial consultation,
we're trying to come up with a criteria.
We're putting together the,
systems in place to go out there
and find those opportunities.
And once we get those opportunities, then
we start drilling down into what I think
is one of the most important parts
of the entire process to just do diligence
and in due diligence, you need that team
leader to try and identify
and fill the gaps of where
the rest of the team may be lacking.
You know, if you put together the right
geotechnical team, the right structural
structural team,
the right architectural team,
they're all
experts in their individual disciplines,
but they may not be able to see the issues
that are maybe
in an environmental scenario.
So you have to have the right
environmental consultants on board.
And sometimes it's going
a little bit further than what
the municipality may require.
And really drilling down into
what is going to have an impact
on construction at the end of the day,
once we get through due diligence,
where we've gone through zoning,
we have our approvals, entitlements,
we get into the permit process.
You know,
we've coordinated those drawings, we've
mitigated the risk through various levels
of construction cost estimates,
and we're ready to break ground.
The systems and processes
that we've kind of built up
until groundbreaking
are some of the most crucial
that are going to ensure
the success fulness of the development.
And as we're getting into construction,
it's putting the right teams
in place, from site supervision
to quality control
and quality assurance, to making sure
that that project is going to be executed.
And the investment protected.
As most lenders, most investors find,
the biggest risk in
development is construction.
And we need to put together the,
the, the plan to take that risk out of it,
from breaking ground
through to stabilization operation,
Royal Guard.
I was, with regards to the,
the construction process.
What are you seeing?
You know, what are what are some of
the trends that you're seeing right now?
Where I'm coming to with this question
is, you know,
in Ontario right now, there's a big shift
where the condos are not being sold
as quickly as they were in the past.
And that's putting a lot of pressure
on the market.
In terms of, you know, it's basically
resetting the whole standard
of how condo sales happen
in the Ontario marketplace,
how is that changing
the landscape of construction?
Is that impacting costs?
Is that impacting supply chain?
Do you foresee
any challenges on condo construction?
Do you see any new opportunities?
With regards to some of the rental
developments that are taking place,
I guess, could you describe
in your experience in the last two years
what shifts have you seen in the
multifamily construction side of things?
Yeah. Great question.
So I think from, from the perspective
of maybe going back a little bit to Covid,
you saw a huge drive up in prices,
lead times and things of that nature.
And then it kind of plateaued.
And then I'd say in the last six months,
maybe even a year, it was, a slow decline.
Trades are getting much more competitive.
In the
last six months, we've had more trades
knock on our door asking to price work
or what's available than I think
I've ever seen in my entire career.
It's just a very different market
out there right now.
You know, 60 plus condos
being canceled in Toronto in one year.
It's a huge number.
It's a huge number for any market.
And the trades that had that work
in their pipeline are now scrambling
to find other work which is creating
definitely a number of opportunities.
And I'm always asked, you know, when's
the right time to jump into construction?
From a development perspective,
if we're seeing that downward
decline, there's no crystal ball.
If there's another few rate cuts
and a lot of those condos go back online
and start building, then you're going to
see that incline again. So,
it's a double edged sword.
Sometimes you wait too long, you're going
to get hit, then whacked in the back end.
You go too early.
It's, you know, vice versa.
But right now we have trades,
multiple trades,
offering various discounts
and incentives to secure work,
which you didn't see a year
ago, a year and a half ago.
Are you seeing more?
I don't want to say institutional,
because I know we were at a conference
not too long ago, and that and large,
large developers were now
looking at more for purpose rentals
because obviously the market we're
in, are you seeing just from your aspect
and what you deal with,
because you've dealt with a whole wide
range of type of builds,
more people
getting into the missing middle space
or more people getting to
for purpose rental, and if so, why?
Why do you feel that is so?
I think CMHC, MLA, select program
made that a little bit easier,
I think, whereas
it may have been prohibitive to secure
construction financing in the past, it's
maybe a little bit easier now.
They're also
manageable if you can keep them under
that ten units and avoid S.p.A.
But the timelines become a little bit
more manageable.
The size of projects.
So the net worth requirements that CMHC
requires is a little bit more manageable.
So we've definitely seen an uptick
in the last couple of years of developers
specific looking to target
that kind of tenant below,
unit mix or unit count.
But that's also created a lot of
challenges for us and for the industry.
So there's a lot of unreasonable
expectations into how long things should
take, how design process should work, how
the approval process should work
just because it's a ten unit building
doesn't
mean that, you know,
you're going to throw in a concept
and you're going to have your
approvals in three months.
You know, designing a ten unit building
isn't that much different
than designing a 40 unit, 50 unit
plus building.
It has the same challenges
that a larger build has.
But I think just that number,
the process with CMHC has made it
a lot more conducive
for smaller developers to to tackle,
you know, a little bit larger build size.
And does that change
from your perspective of trades
that are available for you to maybe,
maybe a trades is used to a very larger,
larger developments or larger jobs.
And then now we're kind of squeezing them
into something like we're doing.
Oh for sure.
So they're these projects are too small
to be big and too big to be small.
So it creates a problem of,
you know, your typical residential trade.
There's lots of challenges
in these ten units
that they may not have encountered before.
And from a trade that does, you know,
25 storey high rises, that creates
some logistical challenges for them.
Their overhead expenses are a little bit
different than the smaller trades,
but that's more than likely
the right trade.
So it becomes, you know, the spread and
pricing that we see on these ten units,
there's just as much challenge
in explaining the spread
to our clients and our teams,
as vetting this spread through the trades
to make sure that,
you know,
the low price is right in the high prices.
Right. Yeah.
You you mentioned earlier regarding
ten units in under
not going through site plan approval
for the listeners out there.
What what does that mean.
What do what do they save.
What does that mean.
Timelines and and size of the project.
So can you talk a little bit about that.
Yeah. So the bill that was introduced
recently,
has allows developers
to forego the site plan approval process.
So essentially with the site plan
approval or site plan control process is
is really tying developers
into certain things
that they have to agree to
with the municipality
to get approval to take their project
into the building permit stage.
So typically it would include things
as doing stormwater
management
assessments and traffic studies,
and different types of
investigations
that would satisfy the municipalities
concern for maybe that type or style
or scale of development.
And it also tied developers
into esthetic decisions.
How are you going to clad your building?
And, if they didn't like the type of color
or the type of material,
you know, they had a say in that for going
that process now allows developers
to to kind of hop over that step,
make their applications.
But it's still not as easy is just
going in and making the application.
And as you guys know,
the zoning has to be right.
You need
sometimes you may need a variance.
And I think a lot of what's happening
in some of these municipalities
now is they're using the minor variance,
process to kind of pick
up on some of what the Spa,
used to control.
So you need to have, a very delicate
process of that submission,
trying to address or anticipate
a lot of the questions
that they're going to come up with to
make sure that you can take advantage of
not having to go through that SBA process,
but the timelines associated with Spa,
I think the most recent study is you're
seeing as much as 24 months in the GTA
and in some of the smaller municipalities,
there are as little as 6 to 8 months.
So a huge timeline difference.
And as investors and developers
understanding what your entrance in
and or entry points and exit points
are, are very important.
And it's been very difficult,
especially in Toronto,
to pinpoint when your site plan
approval process is going to be complete.
I think that's a massive one,
and that's a good call.
Jimmy, kind of clarifying that because,
I mean, we even know
friends and developers who just before
that came out, were about a year, a year
and a half into the site plan approval
process, over 100 K in non budget.
And then they came out with the rules
so they weren't able to backtrack
and you know, refund any of that money.
So that is a huge time timeline
time saver.
But then also like you said you're
kind of navigating through with the city
and sometimes of requiring
some of that stuff.
But I mean, even with the municipality
that we're working with,
it seems to be fairly,
you know, receptive there.
But I know municipalities are different.
Seems.
But absolutely cool.
Go ahead. Correct. Yeah.
In terms of,
in terms of the construction process,
how do you evaluate,
you know,
how do you evaluate, a good design?
You know, a lot of a lot of developers,
you know, including ourselves,
came in with the vision of, you know,
we're going to build the most energy
efficient building
ICF four stories, basement.
And then quickly, you know,
you looked at our design and,
and value, engineered our dreams
at the onset.
Could you could you explain to me
or to to our audience,
what you look for
when you are looking at a good design
and what's going to be a,
you know, a good a good building for sure.
So from, from the construction manager's
perspective,
very selfishly,
I want the easiest building to build.
That's going to take a lot of risk
out of the process.
Now, from the developer's perspective,
of course, you want things to look great.
You want to have, various speaking points
to talk up your building in terms
of energy efficiency and, and design
and all those types of things.
So it's it's really a compromise
of trying to marry the two.
A good
architect can come up with a great design
that's still simple.
And they can find different techniques
from cladding to,
you know, placement of windows
to come up with something that's unique.
You know, just because you're building
a rectangle doesn't mean
it has to look like, you know. Yeah.
A typical plain box.
They can come up with ways to articulate
and all those types of things.
So it's I always look at number one
efficiency.
You know, every body that comes to
our office wants to know what the cost
per square foot is
before they even entertain a design.
And my question, oh, my answer to that
question is always it depends.
And it really depends on what you're
willing to compromise on.
If you're not willing to compromise,
how much you're going to drive that
cost per square foot up.
If you're willing to compromise and work
with your team to get an efficient
design and build process in place,
you're going to drive that cost down.
So the two primary
things we're looking at extremely early,
even before you've
got the rest of your design team on board,
is architectural and structural.
We want to make sure
from an architectural perspective,
they're designing something
that's fairly easy to put together.
A structural plan
that's not going to involve cast in place
concrete and structural steel
on your above grade components.
If you can avoid that
and stick to something like wood or,
you know, even ICF is a great option.
But it depends on what you're
building and what you need your cost
to square foot to be.
And you have to be cognizant of those when
you're going through the design process.
But generally,
you know, in the missing middle,
you're talking about anywhere
between 6 to 40 units.
Could you speak to
I know it's a little bit of a difficult
to thing to do, but could you speak
to the magic formula of things you want?
Like, you know, you generally want to go
with wood construction, right?
Are there other parameters that you know
that you have that, that are,
you know, that are useful to integrate?
I think so
when we sit down with our our clients
and our teams, we're also looking
at how you're financing this project.
So we have to keep that into the mix.
If you're in with,
a very high cost of money,
we need to make sure that we're
putting together a process that,
you know, may shrink your construction
timeline down by three months.
It may be more cost
per square foot upfront,
but those carrying costs at the back end,
you're going to save more
than if you had a lower cost
per square foot.
But six months more construction
time would.
So we try and marry up holistically.
Everything that's involved
in the development process,
from your design and your systems,
all the way through to your financing
and what your exit strategy is.
So putting together the the land is more
of a an individual process.
Sitting down with our team and our clients
and really understanding what
the major drivers are.
If you're going through
and you're getting everything you want to
the CMA, CMA, select, and you're able
to get the highest loan to cost possible,
more often than not,
we're recommending total precast,
especially if it's a long term haul.
It's going to be extremely fast
to get in and out of that site.
If it's a short term hold and an exit
and you're looking to maximize profits,
you know you may be looking at something
like wood construction.
But that said, there's always a medium
in between where you can
put together the right structure
at the right cost for a long term hold.
That's not total precast or wood,
but potentially a hybrid of the two.
So it's it's really looking at every site
independently,
understanding what the investment
timeline and horizon is
and making sure that the system
that's in place for your build
really meshes with what you're trying
to achieve, both short term and long term.
Yeah, yeah, well I was hey, Adam.
Beautiful answer.
What I was hoping to lead you to is build
three stories.
Do what? Construction. Right?
I mean, you know, you do
have you do have a basic formula
that you generally use, right.
There is so again, you yourself, Kartik,
they've been fortunate to find sites
that are conducive to that.
You may not always have the room
to do three stories.
You're you're
bread and butter, three stories.
You know, no elevator wood frame
construction,
getting it clouded with something
efficient.
That's going to be the
the recipe for success all day long.
Every site is a little bit different,
you know,
can you fit your parking or can't you,
you know, surface parking is usually
a deal breaker on projects that size.
But a lot of rules are changing in
many municipalities
where they're offering reduced counts
or you're able to creatively fit
those parking in those parking counts in.
So if you have to go below grade on a
building this size typically doesn't work.
So yeah, you're right.
Car like that three story,
no elevator wood frame construction
is your your bread and butter equation
all day long.
Yeah.
With a simple mechanical system like,
you know, splits, split heat pumps.
If you're going for energy efficiency
seems to be the right formula right now.
Yeah.
Decentralizing everything to make sure
that it can be independently metered.
So from an operation perspective, that's
definitely going to can I help you out?
But even from a construction perspective,
everything self-contained within each unit
from a maintenance perspective,
if your hot water goes down
and everything's decentralized
in one unit, it's
only affecting that one tenant.
You have a centralized boiler system
and that goes down the middle of winter.
You've got ten angry
tenants to contend with,
so it's not just construction
that you need to think about.
You know, as investors, especially
if there's a long term hold included.
You also have to think about stabilization
operations.
Yeah.
Can you speak to some of the opportunities
that, you know, investors and people
that are looking to get into this
market could take advantage of.
Right.
Obviously, you know, with our
you know, our expertise has been to find
single family homes and turn them into 8
to 12 unit apartment buildings.
Are there other interesting opportunities
that you've kind of seen or markets
that you've seen, you know, maybe
speak to certain municipalities, give us,
you know, give our listeners
a nuggets of, of information
that they can go to acquire us for sure.
I think the the best opportunities
that we're seeing across our desk lately
are the ones that we're never intended
for multifamily.
So if you can find a grouping of
of single family homes,
if you can find a grouping
of highly commercial properties,
you know, properties
that are conducive to multifamily
but were never intended to be utilized
as multifamily, those are some of the best
opportunities we're seeing right now
that are allowing for,
I guess, for lack of a better term,
instant profits right off the bat.
You know, your profits, in my opinion,
are made in real estate on acquisition
and they're protected and due diligence
and then they're secured during
and through construction.
So I think that's what we're seeing.
A lot of the best opportunities here.
I'll just take over
just one second here as you're doing that.
I think the one thing you touched on to
was was speed.
I think one thing
that we've been fortunate
as we've really been focusing on an area
where it's already zoned,
because I've even personally
been looking in other markets
is, you know,
I've been sharing with cardigan, Jimmy
where you think it's a good area
or potential.
However, just the, the inability
to even get that zoning change
in a great area, even at a great price,
there's so much pushback
and and even more importantly,
unknown where it might,
might be potentially or might look good.
But you have that that risk that you
unfortunately can't hedge where you do
have that hedge of risk where you
can find a property that's already zoned
in the path of least resistance.
So I just want to add
to how important that that is for us.
Anyway.
And I
you know, there's definitely a
is in the small I mean we've seen a zoning
bylaw amendment
minor various or minor variance
while concurrently preparing building
permit has been eight months.
You just don't see those timelines in
and around the bigger cities.
So and that was all the municipalities,
the Saint Thomas's of the world,
where you're seeing lots of employment,
kind of the Gray County area
where you're seeing lots of,
new construction with Bruce Power Plant.
Those are all areas that, you know,
you're seeing that uptick in employment,
and you're also seeing those very fast,
development approval timelines.
So, so for some hot takes, what are some
good municipalities to work with?
Don't give hours away too quickly.
I would just say from the
the municipalities
that are crossing our desk
and that we're actively looking into right
now, you know Saint Thomas is is a hot
one right now, just in terms
of the amount of new employment.
There's an announcement that came out
yesterday, 200
more jobs are going into that market.
So very heavy employment area,
Gray County,
Bruce County, those are strong areas
in Saint Catharines, Barrie,
Niagara Falls,
again, those smaller I say they're small
municipalities, but these are big cities.
Yeah.
But they're not Toronto.
So the cost of acquisition is a little bit
cheaper,
the municipalities
a little bit easier to work with.
I would say those are some of the harder
ones that we're seeing right now
and consistently
see across our desk, daily basis.
Yeah.
And I've heard, you know, places
like Oakville and,
and Burlington are a bit more challenging,
to kind of deal with.
So, you know, if anybody's
looking to invest in those areas,
kind of has to proceed
with the appropriate caution, right.
Because timelines are just timelines
to understand your timelines.
And to your point, Kartik,
where some people can,
you know,
find opportunities for investment,
you know, CMHC, MLA, select program
hasn't been the easiest for everybody
and financing right now
for land and acquisitions.
And then transitioning into construction
also isn't the easiest for everyone
right now.
So those are great areas of opportunity
where investors can either come in
and get some equity, become part
of the team and help take projects
through to completion or even offer,
you know, various types of incentives or,
or financing programs to help developers
get from point A to point B?
Yeah, absolutely.
Yeah.
Just, kind of to wrap up here, Adam,
for you too, like, what are you seeing?
And this is a selfish plug for you
and ask and genuinely asking,
what do you what excites you
about the stuff that we're doing with you?
I, I it's it's the whole missing
middle thing
now, you know, it's,
it's, it's not a fabricated issue.
It's, it's a real issue.
You've got people
that want to transition from,
you know, A to B,
but there's a big gap in that transition.
And a lot of the the kickback
we get from municipalities at times,
whether especially
when we're going through with,
the program
that maybe is asking for reduced parking
or, you know, we're asking for
some other concessions from municipality
to make the, the project work,
you know, especially from,
the NIMBYism perspective
and not in our backyard.
And we don't want this here.
Every unit is creating a space
for somebody to move into,
whether that's somebody moving
up, somebody that needs to move down.
Whoever's moving into
that unit is creating another space
in wherever they just came from.
So one unit is creating
essentially two spaces,
and I think that's the missing middle
that a lot of municipalities
aren't considering,
or at least taking into account
when they're making these decisions.
One unit isn't just one unit.
It's creating a chain of events
for multiple end users
to move into a space
that's going to be better for them,
both financially and economically,
financially, economically and socially.
Yeah.
And having that communication with them
with the municipality too and I'll,
I'll give a shout outs
to Kartik and Jamie.
You know you guys have been really great
communicating with the municipality
that we're focusing on.
And I think there's sometimes a disconnect
of maybe what their goals are
or what their policies are versus
maybe what an investor
developer thinks they can do there.
So, you know,
I think that communication is key.
The other thing that really excites me,
you guys care about the end user.
You know, this isn't just let's
put up a box, we'll get people in there
or we'll make some money out of it
and move on.
You guys are thinking about
how is the user going to interact
with this space
and, you know, where are they going
to spend their time outside?
How are they going
to spend their time inside?
And what can we do to make this beneficial
from a health perspective?
Not a lot of developers
are going into that type of review
and detail to make sure that the end user
is going to be comfortable.
You guys are trying to
build a brand for yourself.
And that excites us as well.
There's it there's a much different
perspective on space planning, on design
and all those types of things which we see
that you guys are very passionate about.
Yeah.
And to add to that, to add to that
what you were saying,
Adam, is one one unit creates
two spaces, two new spaces.
And we we do really care about the end
user people moving in and, and
the families that we want to accommodate,
because we're adding units to the market.
Right?
We're not just refurbishing
or renovating our current buildings
and putting out the same amount of units.
We're adding units to the market,
and we're really proud
and and happy to do that.
So just wanted to add to that because,
that's really why we're also doing this.
And having and having a team
like yours backing us up, Adam,
you know, gives us a lot of confidence
to make these kinds of bold decisions
and bold moves.
You've been with us
every step of the way, right?
You know, from sending us text messages
during the minor variance meetings, right?
When we're getting grilled
by the committee,
you know, to just, you know,
getting us in line when we're kind of
wearing off course, right?
When we're taking too long
to make decisions and all that stuff.
So, you know, what I,
what I'm trying to get to is like having
somebody like yourself can give investors
and developers a lot of confidence,
because this whole missing
middle space is so new.
And like you said right there, you know,
they're big enough to not be small,
but they're not small enough.
You know, there's, you know,
and they're small enough or big enough
to not be small and small enough
to use your words, small enough to be big.
You know, that
people can get tripped up in that,
in that situation.
So I think it's absolutely critical
that anybody that's trying to get into
this space has yourself or somebody
like yourself kind of backing them up.
Otherwise they're going to trip
and make very expensive and very,
you know, time,
expensive decisions as well.
Now you use the perfect word there, trip.
You know,
we've had a lot of discussions about that.
We don't.
We want to be there before you trip.
We want to identify the tripping hazard.
And if you guys want to fall,
you get to make that decision yourselves.
But we're identify
that tripping hazard for you.
We help you circumvent
that tripping hazard.
At the end of the day,
if you want to make the decision
to try and go at that tripping hazard,
you know that's something that,
ultimately as as developers,
you're going to make that final decision.
But that's what we're trying to assist
with,
is making sure that at the end of the day,
you understand the risks.
We point them out to you,
we you, we point out what the various
repercussions of those decisions are.
But having that team in place that cares,
it's all about like mindedness.
And you guys are so caring about your end
user.
We're so caring about our clients,
but at the end of the day,
we also care about that end user as well.
No matter how much we're involved
in a construction project,
we're always thinking about that end user.
If you guys decide to sell this building
the day after it's finished,
we need to make sure
that there's a product out there
that's going to be useful and beneficial
for years
to come for whoever purchase it from.
And a lot of our decision
making and recommendations and opinions
comes from just that perspective.
Adam,
you've got a little bit of something here.
You may just want to clean that off.
Well thank you.
Yeah. No problem. Edit that out.
Yeah. Not exactly.
You know, and, you know, to that point,
Adam, I do want to talk about how there's,
you know, it's not just we're not just
trying to toot each other's horn here.
You know, there's a tangible benefit
from a CMHC perspective to work
with a experienced construction management
like yourself.
Right.
It makes your applications
go through a lot faster.
It makes the, you know,
it gives comfort to the lender
that the team that we're working
with has experience and all that stuff.
I mean, in some cases,
if you're not working with somebody
that has experience like yours, you
your application might not even get
picked up by CMHC. Absolutely.
Absolutely.
That's a big point right there.
Absolutely. Yeah.
We've never filled out
so many waiver of bonding forms
as we did
before the last deadline there last week.
And it's just to that point,
you know, that there's
there's increased costs
associated with the CMHC process.
If you don't have an experienced team
with you,
you're going to
pay for one way or another.
And the advice that you get hopefully
any good construction managers
should be able to make up their fee
and the advice that they're given,
the problems that they keep you out of.
No doubt. Yeah, absolutely.
And you know what, Adam?
I know that you guys are very selective
in the clients that you choose.
You know, you might have a situation
where somebody has good intentions,
but they kind of approach
you the wrong way.
And then, you know, and then,
you know, then and unfortunately for them,
you know, the doors get closed off.
What can people do
and what are the things that you look for
to onboard the right kind of people,
to bring on as clients?
It's a good question.
I, I've, I have,
especially inside the office
of making two quick,
judgments every now and then.
I just look for, like, mindedness.
Cutting corners isn't something
we want to do or we want to see.
Not putting the right product out there,
not taking the time to
to put the right team together.
You know, those are things
we just won't compromise on.
And I think those are the biggest
things that we look at
and try and make that snap judgment on.
In those first few meetings that we have
with our prospective clients.
There's got to be a like mindedness there.
And I think that's one of the keys
to building the right team.
If you're putting a bunch of people
in a room that aren't
like minded, it's never going to work
and it's not going to be efficient.
That doesn't mean that,
that project's not going to be successful,
just means we may not be the right leader
for your team.
And there's lots of other leaders
out there that may fall in line
with those types of mindsets.
That'll be much more successful
than if we were to go at it
and butting heads from beginning to end.
Absolutely.
I have one more question
that I want to bring up,
that I think is actually very useful.
So, you know, there's
lots of different contracts
in construction management, right?
What how what are some what can you speak,
that, that you use, and,
you know, kind of going to what,
what they mean and why they're different.
So the two most prevalent,
especially from a construction
management
basis, are a Ccdc five A and a Ccdc five.
From a general contracting perspective,
it's a ccdc two.
So the difference between the three
a Ccdc two is your typical general
contracting arrangement.
You go out as the developer,
you hire a general contractor,
or they give you a lump
sum to build that project.
You enter into that agreement.
Essentially, they hand you the
keys. At the end of the day.
The construction management perspective
a Ccdc
five A
it's an open and transparent process
where the construction manager is being
retained early.
They're assisting you through that design
process.
They're giving you the advice,
that you may not get with the GC.
And you're essentially you're essentially
seeing all the,
discussions with trade contractors,
the pricing submissions,
and you have an input
into putting together that construction
team, that's able to execute your vision.
The difference between a Ccdc five A
and A5B,
the five B can essentially be flipped
into a general contracting agreement.
At the end of the day,
it really depends on the risk
tolerance of the investment group.
A5B is Lrrk2 and the same thing
the general contractor
is taking on the most risk.
So he's going to have the highest fee
or any of those three bulletproof.
No, I've seen them all go wrong.
I've taken over all three.
I've taken over projects
that had all three
contract structures in place,
and it always goes back to team
for some didn't have the right
construction managers,
some didn't have the right consultant,
some had a combination of the two.
Sometimes it's the developers issue
where the developer can't
get out of their own way and is are making
decisions and are becoming too involved
that create the inefficiencies
that caused the project to fail.
So from a contract perspective,
it all goes down to that holistic approach
of knowing a deck of cards
you can't pull one card
and hope that the house
is going to stand up.
So it has to be that holistic approach to
making sure you've built the right team.
The contract flows with the team
that's going to be in place.
And everything really
works with what your vision is
and how you intend to get there.
Perfect.
Couldn't explain that one myself,
so I'm glad you did.
But the,
now I first of all,
I just want to say thanks for coming on.
And I just want to wrap this up
here, guys,
unless you have anything else
that you want to tap into.
But I'm just really grateful
that you're on our team.
I think, we talk about experience a lot.
I think finding someone who we're
all comfortable with to kind of come
along on our journey to with,
the multiple projects that we're doing.
And it's a learning curve for,
for a lot of us.
And we all come with different strengths.
So to have someone,
you know, as strong as you,
you are on your construction
side of things
and the management side of things,
we're really excited to grow what it is
that we're growing here.
And I think it'll impact a lot of people,
too, down the road. But thank you.
Anything else, guys?
Anything else?
Guys, before we we take off here now.
Okay.
Awesome.
Well, behalf on all of us,
thanks a lot for for coming out, Adam.
And we're coming.
Where can people get Ahold here?
Just maybe
give them their email or website?
Yeah, you can get Ahold of me.
Of Adam at the Geo Focus group.com.
Our website is WW
dot the geo focus group.com.
You can also find me at Adam Alter
belly.com.
All right. Awesome.
Well thanks all.
Thanks for everyone for listening.
And we'll see you on the next one
with another team member.
Thank you. Take care.
Great day. Thanks, guys. But.
Let's get.
All right guys.
So that was it for those of you
who are listening obviously that was Adam.
That's our construction manager,
and I can't say enough about him.
I'm super excited and honored
to have actually him on our team.
He gives me a real peace of mind
knowing that we have such experience
on the table, and we're just leveraging
and leaning on that all the time.
What are some major takeaways
you guys had during that conversation?
Yeah,
I mean, he's very precise to the point.
It's just about precision with them.
Every minute counts.
It's not every day
every minute with Adam counts.
And he holds us accountable
and holds his clients accountable.
And he talks about building the right
teams.
The ABC's communication
building the right team and availability.
And and that's what we felt working with
Adam so far.
Right.
And again, I said that at the beginning
and I felt it during this podcast.
He gives us that level of confidence
because of the amount of experience
he brings to the table everything he's
seen over the last 24, 25 years.
You can feel that from him
every time he speaks, right?
So again,
we really appreciate working with him.
And now you guys understand why.
And just also in terms of the trends he's
noticing from Covid too, right?
Covid till now in terms of the trade's
availability, a timing has changed.
And, he's just as excited
about the missing middle as we are.
And we are doing real work.
We're adding units to the market. Right.
So we're all aligned.
And those are the key takeaways
that I took from him.
Just that precision
communication, availability,
having that right team and the experience.
Everything takes care of itself
after that.
Yeah Jimmy
you've hit the nail on the head.
Not much more else that I can add.
You know, these are the strongest
qualities of Adam and the geo focus group.
You know,
what are the things that, you know,
I feel so grateful for for having him on
the team is also the influence
he has within the construction industry.
Right.
The doors that he's opened up for us,
you know, there's been a couple times
when we've had, you know, lenders
that we're working with kind of call him,
and he's been able to basically provide
feedback to the lenders on our behalf,
and it gives the lenders
a lot of confidence in who he is.
And and all the big names that he's worked
with. Right.
That the Randolph Project
is a masterpiece of a building
in Oakville and over $1
billion in projects.
I just appreciate that
he picks up our calls and and, you know,
it gives us the time of day
every single time.
Hats off to him and the team.
I'm excited to share everyone on our team,
but I just I know I keep going back
experience, experience.
But like I feel like
I'm constantly learning from him.
I mean, I'm learning from everyone
during all these processes,
but especially just, you know, the depth
and whatnot that he brings
is pretty awesome.
So yeah, I know
we're pumping out his tires here,
but I think we're all summarizing
the same here.
Just we're we're really grateful
to have him on our team.
We're excited to share them with you guys.
So if there's any, you know, developers
or investors out there who are interested
in doing what we're doing or interested
in getting into development
and have or have a project
or want to bounce something off them,
he's a great asset to have.
So we highly encourage you to reach out
and do your diligence, obviously.
But he's definitely one of a kind.
So excited to share our process
and our progress with him on our side.
All right guys, anything else to add up
before we take off here I'm good.
All right thumbs up.
Let's get moving.
Hope you guys enjoyed that one.
And we'll see you
with our next team member.
Thanks for tuning into
this episode of Build the Missing Middle.
We hope you gained some valuable insights
at the very least a fresh perspective.
If you have any questions
or are interested
in exploring potential partnerships
on any of our future projects,
feel free to reach out to us at Build
the Missing Middle at gmail.com.
We'd love to connect.