A pandemic hasn’t stopped Gatineau’s Groupe Heafey from forging ahead with $400 million in new development in the Ottawa market alone.
The company recently filed a development application with the city for 11-storey and 12-storey towers at 1420 Richmond Rd., 365 Forest St. and 2583-2589 Bond St. in Britannia Village – a prime location for the continued expansion of Ottawa’s light rail transit system.
VP of operations Carmine Zayoun confirmed Groupe Heafey will also be breaking ground in spring 2021 on 300 rental units on St. Laurent Boulevard. A separate plan is in the works with the city for another mixed-use development at 1740-1750 St. Laurent for 700-800 rental units with commercial space.
Latitude Homes, a partnership between Zayoun and Groupe Heafey, is developing about 400 low-rise townhome and condo products, primarily in the Stittsville area. Meanwhile, several hundred new rental units are also under development in Gatineau.
In short, the pandemic hasn’t derailed development opportunities along the city’s new LRT line, nor a persistent demand for housing in Ottawa. It has, however, led forward-looking developers to reconsider the kind of products they bring to market. How people live, work and play has changed and their housing options should reflect that trend.
Lifestyle vs. finish
For Groupe Heafey, the focus now is on providing customers with a “choice of lifestyle rather than finish,” Zayoun said. “We don’t want finish to be the choice, we want lifestyle to be.”
For example, islands in condo and apartment units will easily convert into a professional workspace. With townhome products, buyers can choose between having a basement fitted up as either a home office, a kids’ playroom or a home gym.
These options impact flooring choice, sound proofing, the need for structural reinforcement and how the room is wired.
“There are a lot of unknowns right now, but as a builder you have to go with the market and go with the times,” Zayoun said.
“The world is changing, we recognize that and we have to reflect it in the product we offer . . . people are going to be spending more time in their homes, it will be their safety net, not just a place they go to at the end of the workday.”
Keeping a vigilant eye on which way the wind is blowing has long been Groupe Heafey’s modus operandi.
Groupe Heafey’s strategic growth
Founded in the late 1970s by notary-turned-real-estate-investor Pierre Heafey, the company today has just over $1 billion in assets. That growth has been a combination of rehabilitating distressed assets with potential and also engaging in new development.
The company has invested in the hospitality sector (five hotels to date); the multires rental, condo and townhome markets; and the commercial/retail sector.
This strategy has taken Groupe Heafey as far west as Alberta, east to New Brunswick, and south to Florida.
In the Sunshine State, the majority of Heafey’s assets were distressed properties which it acquired to turn around, though it does also pursue new development (400 units in Jacksonville, for example, and two new waterfront restaurants underway in Miami).
The company’s investments in Florida include five hotels: four operated in partnership with Hilton Worldwide and one with Choice Hotels.
The team is very hands-on, preferring to directly manage its assets, and sticks to the fundamentals. Groupe Heafey’s decision to invest in any distressed property rests with an objective risk-versus-reward assessment of the costs involved and the local market outlook.
“It’s not complicated,” Zayoun said.
Sticking with the fundamentals
For example, Groupe Heafey recently acquired, with partner Hilton, a property in Fort Lauderdale which has already failed to prosper with two other owners.
However, considering that 80 per cent of the property’s units have ocean views, and Hilton’s brand power can be brought to bear, the Heafey team is confident about a successful outcome.
In those markets where Heafey has the “infrastructure” in place, the company will apply that same risk-versus-reward methodology to pursue new development.
By infrastructure, Zayoun refers to partnerships such as the one with Hilton, depth of local market knowledge, relationships with local contractors and a solid team on the ground to analyze costs.
Which brings us back to Ottawa, and the need to balance the opportunities of a robust housing market and an expanding LRT system with the new realities of the pandemic.
“The world is evolving and this was a wakeup call for a lot of people,” Zayoun said. “People’s habits have changed and they’re not going to change back for a while, even with a vaccine.
“People are going to be more cautious and developers like us have to be conscious of that.”