One of Saskatchewan's most prominent real estate brokers has let the proverbial cat out of the bag – sort of.
Phill Elenko has played a role in many major developments over the past 20 years: the 16 storey downtown office tower Saskatoon Square; the multi-phase River Centre featuring office and retail towers; and Matrix Business Park, to name a few.
But the founding partner with ICR Commercial Real Estate is most excited about a project still in the planning – a 200,000 sq. ft. downtown office tower in Saskatoon.
“There are several large mining and engineering companies unable to fill their office requirements”, says Elenko. “We anticipate within six months, announcements for a major A office building will be made.”
Elenko says $50-billion in resource-based spending committed over the next 15 years in Saskatchewan is triggering unheralded development in all sectors including residential, infrastructure and commercial.
He says the province has not seen that kind of investment in the previous 50 years, adding “We are going crazy here in every different direction.”
In its latest monthly snapshot, ICR pegs the vacancy rate for downtown Saskatoon office space at less than 3%.
The world's largest mining company, BHP Billiton, relocated its Canadian corporate office from Vancouver to Saskatoon with a population of about 223,000 as development began east of the city on the Jansen project.
The US $12-billion operation is expected to be the biggest potash mine in the world.
Elenko says BHP currently occupies 100,000 sq ft of office space in Saskatoon, scattered through various office buildings. “They may be one of the drivers to this new office complex.”
Earlier this month, BHP reaffirmed that work will continue at the Jansen site through this year, despite shelving new developments for 2013 including another mega-project in Australia.
ICR – Better Every Year
ICR began in 1986 when Elenko joined forces with top producers Ron Ritchie and wife Sandi Elenko to form Ashford Realty Commercial Division, rebranding a few years later as ICR.
In 1996, ICR established Saskatchewan' s first – and to this the day, only – dedicated industrial real estate office. By 2008, ICR managed more than $1-billion in commercial property.
Elenko says one important philosophy separates ICR from competitors; ICR will not buy commercial real estate in its primary market.
“We are 100% brokers,” says Elenko. “You don't have to worry about us trying to put tenants into our buildings and competing with you. From an ethics point of view, it removes all the conflicts.”
Today, ICR is Saskatchewan's largest commercial real estate brokerage, employing 21 full-time commercial agents at offices in Saskatoon and Regina including personnel fluent in several European and Asian languages.
“Our year-over-year growth has been 10 to 20% since we started this company. We are very happy. Now everybody in the world has heard about Saskatchewan, so we have people coming in everyday saying we are going to build this and build that.”
In the past three years, Elenko and ICR have handled marketing for three new downtown office buildings – two were completely leased before completion and the third is nearing completion with one floor left to lease.
He applauds the current provincial government for creating an environment “where the people running the province leave it up to business to build and develop the province. That has been the single biggest change for the province. That was the start. Then, investment started coming in.”
Soft Spot for Heritage
Elenko's office is located in a 100 year old heritage building, one of many including former CP stations in Moosejaw and Saskatoon which ICR has redeveloped.
“We don't have many heritage buildings in Saskatoon,” notes Elenko. “Many of them were torn down indiscriminately. We have so few buildings to give us a content of our history here, so we work hard to preserve them.”
“In our office building, there are spruce beams 2-feet across. I don't even know if trees like that exist anymore, and if they do you certainly wouldn't be able to harvest them. So they are very unique and they need to be preserved.”
“It's a lot easier to build a new building,” he says. “But you have to appreciate some of these old buildings are magnificent, the way they are built, the architecture, the materials used.”
ICR also helps to build community through an annual golf tournament, which has contributed more than $250-thousand to charity in the last ten years.
Enormous spending in the Saskatchewan resources sector has brought enormous rewards and new challenges.
Elenko says construction costs are high because of a shortage of skilled workers, despite private and government recruitment efforts.
“We are, I believe, one of the most expensive in Canada. It's a big challenge,” he says.
Elenko says ICR is working hard at managing the supply of available space to prevent a boom and bust cycle in the future.
“We don't want to over-build, and we don't want to under-build.” Elenko adds, “To encourage developers when to build and when not build, that's a big challenge for us.”