BlackTusk Group is just seven months old, but its ambitions are as high as the peak in British Columbia’s Garibaldi Mountain range from which the real estate asset management firm took its name.
Toronto-based BlackTusk was formed by Thaine Carter and Aaron Yick in January after they left executive positions in the real estate investment banking group at TD Securities.
Yick holds a bachelor of commerce degree from McGill University and a masters of business administration degree from the Rotman School of Management at the University of Toronto. He’s also a chartered financial analyst charterholder. Yick joined TD Securities after earning his MBA in 2015.
Those were major changes from his original vocation. Carter was drafted by the Winnipeg Blue Bombers of the Canadian Football League after winning the President’s Trophy as the best defensive player in U Sports football as a linebacker for the Golden Gaels at Queen’s University, where he received an economics degree, in 2008.
“It’s not a very sustainable lifestyle,” Carter told RENX. “There are a lot of injuries and my body told me it was time to stop.”
The two men worked closely together at TD Securities, became friends and realized they were at similar stages in their lives and had similar real estate industry experience, goals and interests.
“It was the right time to take that risk and make that leap,” Yick told RENX of the decision to launch BlackTusk.
BlackTusk’s investment strategy
BlackTusk’s principals believe more people will return to work in Toronto’s downtown core as COVID-19 concerns ease.
So the firm is seeking sites within a 45-minute public transit commute of the core, where they can lay the groundwork for smaller mid-rise, mixed-use developments — generally with ground-floor retail and rental residential units above.
“We’re looking for sites in and around existing transit and planned transit in which we can go in, take an underutilized piece of dirt, re-entitle it, and then monetize that to a developer or a joint venture with a developer and build a really cool, curated and highly designed urban infill type of development,” said Carter.
“We’re not looking to do ground-up development ourselves,” Yick added. “Our strategy is to acquire, rezone and flip out or joint venture with a developer.
“BlackTusk is just Thaine and myself right now. We don’t have the development expertise to do large mid-rise developments or tall towers.”
Yick said BlackTusk is particularly interested in “areas on the periphery of gentrifying areas. We’re not looking for core downtown sites at Yonge and Bloor or on King West. We’re looking more at the Junction, Weston and even out into Scarborough.
“When we think of transit, it’s not just subway. It’s the Eglinton LRT line that’s going in. It’s the SmartTrack stations that are going in. It’s the Hurontario LRT line that’s going up in Mississauga.”
BlackTusk is also looking for value-add, income-producing properties in those same areas where they can breathe new life into existing under-utilized and under-managed properties through adding new elements that will appeal to people in the 27- to 45-year-old age range.
BlackTusk’s portfolio and pipeline
BlackTusk’s sole property at this point is at 128 Lakeshore Rd. E. in the Port Credit area of Mississauga. Yick said they’re in preliminary conversations with the City of Mississauga regarding plans for the site, currently occupied by Skinner & Middlebrook Funeral Home, and can’t provide many details at this point.
The property is just west of Hurontario Street and offers easy access to the Port Credit GO Transit station and a future stop on the Hurontario LRT. The Brightwater development and projects from Edenshaw and Fram Building Group are located nearby, as are Lake Ontario and a number of amenities.
BlackTusk has two other properties under contract that will involve taking existing structures and adding value through changing their use. One would convert a retail and office building to residential while the other would involve adding a tenant Carter said can add social infrastructure to its neighbourhood.
“We’re not just looking at this from an economic standpoint. We’re also looking at adding things that will contribute to the culture and life experience of the node itself.”
Financing and Dream Impact Trust partnership
Carter and Yick said they’ve established trusted relationships with people they’ve worked with both within, and outside of, the real estate industry and have access to capital through high-net-worth individuals and institutions.
“We raise capital on an acquisition-by-acquisition basis,” said Carter. “At some point in time in our careers, should the moons align, we may look to raise a fund. But at this point we’re still building things out from a track record perspective.”
BlackTusk has also formed a partnership with Dream Impact Trust that will involve co-investments on a project-specific basis and provide the firm with access to Dream Impact’s platform of resources. The agreement preserves the founders’ 100 per cent ownership of BlackTusk.
“If we find projects that fit the bill for Dream Impact’s criteria for its investment platform, they will be a capital partner,” said Yick. “That’s really going to help us scale up faster than we typically would.
“Having the name and financial backing of Dream will help us scale up and give us certainty of capital when we’re pursuing certain things.”
Carter noted he and Yick have worked with people from Dream for several years and said “they’re quite excited about the opportunity to have us out finding deals which may typically not come across their desks given their scale and typical scope.”
The partners expect to acquire their first property within the partnership in this quarter.
Yick said impact investing isn’t BlackTusk’s major focus, as it is with Dream Impact, but it’s something it takes into consideration. BlackTusk is interested in green and sustainable development, being carbon-neutral and providing an affordable housing element where it’s financially viable.
BlackTusk’s future growth
While just a two-man operation for now, BlackTusk plans to add team members with specific areas of expertise as it grows.
At the moment, the firm has three advisers who are well-known within the real estate industry: Knightstone Capital founder and chief executive officer David Lehberg; TD Securities managing director and head of commercial brokerage Jamie Ziegel; and Starlight Investments executive director of development Howie Paskowitz.
Both Carter and Yick have been working from their homes to this point and securing office space hasn’t been an immediate priority, although they’ll open one when they feel the time is right.
“It’s very much a marathon and not a sprint,” said Carter. “The real estate industry is small and close-knit, so it’s better to move with precision rather than running amok. We intend to be here for many years into the future.”