Capital Developments co-founders and managing partners Todd Cowan and Jordan Dermer’s experience in Canada and Europe has served them well since they launched their company in 2007.
“We wanted to capitalize on the relationships that we had created throughout our careers,” Cowan said in an interview in the boardroom of Capital Developments’ midtown Toronto office. “Our goal was to create one of the leading real estate development companies in Canada over time, starting slowly and growing organically.”
If being involved in several of the largest ongoing mixed-use and residential tower developments in Toronto is any measure, the strategy would have to be considered a success. In addition to several thousand residential units in a half-dozen projects, Capital Developments has approximately 500,000 square feet of commercial space under development.
Cowan and Dermer were executives with Trizec Properties responsible for asset management, acquisition and leasing across Canada before Trizec chief executive officer Peter Munk asked them to move to Hungary and oversee TriGranit Development Corporation.
TriGranit developed more than 10 million square feet of mixed-use properties in the largest cities of Central and Eastern Europe from 1996 to 2006, before a controlling interest was sold to an Austrian company. That opened the door for a return to Canada and the chance to start a new business.
Dermer said the decade in Europe spent dealing with hurdles involving zoning, financing, different asset classes, languages and culture barriers was a great learning experience. It provided them a unique set of skills that few other Canadian developers can bring to the table.
Capital Developments’ strategy
“We build buildings, but it’s really relationships that we build,” said Dermer of Capital Developments’ penchant for working with partners on its larger projects. “Typically we find that one plus one can equal three when trying to win a bid, or putting all the best minds in a room together to think through the issues and solve the problems.”
When asked what they consider the key strength Capital Developments brings to a project, Dermer replied: “We’re deep critical thinkers on the strategic approach to a deal and the underwriting of the deal, which involves scheduling, revenue assumptions and cost assumptions.
“We try to leave no stone unturned so that when we’re presenting a deal to a partner, an equity partner or a bank, it’s as accurate a reflection of current market costs and revenues and schedules as it can be. Typically we’ve outperformed those underwritings almost every time.”
While Capital Developments and Construction Garbarino built the eight-storey, 156-unit Ma Condos project in Dermer’s hometown of Montreal, the company is primarily focused on the Greater Toronto Area. Its specialty is building condominiums and purpose-built rental apartments with mixed-use components.
“We’re big believers in the growth of the City of Toronto for the foreseeable future, so we think that focusing on residential is a great space to be in,” said Cowan, “(though) we’re very comfortable in office and retail development because that’s where we came from.”
Bloor & Dufferin
The development the two men are most eager to talk about is Toronto’s Bloor & Dufferin, a partnership with Metropia. The plan includes more than 2,000 residential units, with more than 60 per cent geared to families, on the site of the former Kent School and Bloor Collegiate.
Bloor & Dufferin will also include almost 170,000 square feet of retail space, more than 50,000 square feet of office space, about 70,000 square feet of amenity space, almost 40,000 square feet of green space, and a 30,000-square-foot community hub.
The developers are working with stakeholders and city representatives on rezoning plans, which they hope to complete this year before moving on to sales, marketing and construction.
“We believe it’s a much-needed step in the continued gentrification of that area,” said Dermer.
Yonge and Eglinton towers
Capital Developments is also involved with the development of four residential towers in the area around Yonge Street and Eglinton Avenue in Toronto.
The 35-storey, 452-unit 155 Redpath Condominiums is completed and occupied at the corner of Redpath and Roehampton avenues. Across the street, the 39-storey, 571-unit 150 Redpath Condominiums is topped off and will be occupied by the end of the year.
The sold-out, 652-unit Art Shoppe Lofts + Condos at Yonge and Soudan Avenue is about to be topped off and should be occupied in the latter part of this year.
Just a handful of units remain unsold at E2 Condos, a Capital Developments, Metropia and RioCan Living project on Roehampton just east of Yonge. The 46-storey tower will feature 617 units when completed in 2022.
Other GTA developments
Capital Developments, Metropia and RioCan Living are partnering on Toronto’s 11 Yorkville Condos, which also has an estimated completion date of 2022. The property will include a 62-storey, 716-unit residential tower, two floors of retail and a park.
Dermer said Capital Developments and Metropia make good partners because they have similar approaches to doing business and how they think through developments. He also appreciates the privately owned company’s track record in community-building.
“On an opportunistic basis, we went after a few projects together and so far it has worked out great,” said Dermer.
Capital Developments is going alone on Azura Condominiums, a 32-storey, 358-unit project that’s in the pre-construction phase and should launch later this year just off Yonge Street near the Finch subway station in north Toronto.
Dermer said Capital Developments is always seeking new opportunities, but might do only one deal for every 30 or 40 it looks at.
“We’re very cautious, but we’re also opportunistic,” he said.