Money they earned from The Commencement Group – the largest college, university and high school commencement flower and apparel retailer in North America – led to real estate investment, management and development for Darryl Firsten and Adam Sheffer.

The two men are now also the partners in Originate Partners, a Toronto-based platform company that oversees IN8 Developments, Originate Developments and the Sage Living property management firm.  

“We always joke that people end up in real estate because they either know how to build things or because their family has been in that world for a long time,” Sheffer, who serves as Originate’s chief executive officer, told RENX. “And we were neither. 

“We came from a pretty complex operating business and had both invested in real estate with our spare capital, and then found ourselves in a position where that was taking up more and more of our time. And that's kind of how both IN8 and then later Originate were founded. 

“It wasn't intentional that we wanted to become real estate developers. It was a passive investment that eventually became a very active full-time business.”

Sheffer’s focus is on Originate Developments while Firsten founded IN8.

Investing capital in new but related areas

After building a land bank but finding that the market for developing new buildings has slowed, they've decided to put Originate’s capital to work acquiring specialized service and light manufacturing businesses that deliver essential, recurring and value-added solutions critical to the functionality and longevity of the assets they serve.

“Our goal, long-term, is to build, hold and buy these businesses to have a significant portfolio and continue to develop at the same time,” Sheffer explained.

The first company to come under the Originate Partners umbrella as part of this acquisition strategy is Hydrastone. It specializes in the inspection, maintenance, repair, relining and preventative maintenance of hot water storage tanks and related potable water infrastructure.

“Hydrastone was an incredible fit because it hit all of the criteria,” Sheffer explained. “Jamie Russell, who was the owner, had a GM (Paul Duell) who'd been running the business for a while and Jamie had another business he was running and wanted to give that some attention.

“That was his motivation to sell and we were able to elevate that general manager and bring him in as a partner with us, which was a benefit to him and an incredible resource to us because we need that flexibility of having a great management team so that we can focus on more than one thing at the same time.”

Hydrastone has offices in Ontario, Alberta and British Columbia.

More acquisitions to come

While declining to disclose the financial terms of the Hydrastone deal, Sheffer said Originate Partners purchased the majority of the business while Russell and Duell also have stakes.

The deal was financed by TD and Sheffer said future acquisitions will also be financed by Schedule I banks. 

“Now that we've made that first acquisition, we're starting to look quite aggressively at how we can offer more services to property managers, both organically and inorganically, by acquisition,” Sheffer said. “We've got a few that we're working on now.”

One of the investment principles is finding businesses Sheffer said have “amazing assets of skilled and specialized technicians and intellectual property.”

Development projects

While the development part of the business has slowed and some projects have been put on hold due to unfavourable market conditions, IN8, Westdale Properties and Harlo Capital’s 44-storey, 530-unit TEK Tower condominium at 30 Francis St. S. in Kitchener, Ont. is scheduled to be complete later this year.

The SRM Architects-designed building will include a rooftop park with landscaping, a bar area, barbecue grills, a private dining space, a lounge area, a party room and a walking track. Other amenities will include co-working spaces, underground parking with electric vehicle charging and facilities, a KitchenMate kiosk in the lobby, a concierge, a fitness centre, bicycle storage and parcel delivery lockers.  

IN8 and Westdale’s 1107 Main St. condo in Hamilton is under construction and scheduled for completion in May 2027.

The SRM Architects-designed 15-storey building will also include seven townhouses. There will be 264 units in bachelor, one-bedroom, one-bedroom-plus-den, two-bedroom, two-bedroom-plus-den and three-bedroom layouts. There will be commercial and retail space at grade.

It will include an 8,500-square-foot rooftop terrace with landscaping, barbecue grills and dining spaces. It will also feature co-working spaces, an indoor/outdoor gym and yoga studio, a party room, a concierge, parcel delivery lockers and bike storage.

“On the Originate side, as regulations change, we retool,” Sheffer said. “We're trying to see if we can make the purpose-built rental model work. We're not quite there yet, but we're working on it.”