After almost two decades in the real estate business, Sandhu Developments remains committed to developing in Ontario – but what the company builds and owns has been undergoing a change.
Brampton-based Sandhu has been diversifying its portfolio from its roots as a retail developer, owner and operator.
Part of that involves the recent acquisition of a 3.66-acre mid-rise multiresidential project on 121 Wellington St. W. in Barrie, a city of over 155,000 located 75 kilometres north of Toronto. It plans to build up to 804 residential units at the site.
“Twenty years ago when we started in real estate, it was just you invest here and it was (a) for-sure thing that over a period of time you will make money, but now it's changing," CEO Sukh Sandhu told RENX. "So one of the things we have just recently done is we have diversified.”
The property already contains a three-storey, 39,491-square-foot medical office building.
The transaction was brokered by Colliers.
Sandhu's plans include an eight- to 12-storey building of 200 units for Phase 1, then 6-, 12-, and 14-storey buildings in future phases. Also planned are 4,542 square feet of indoor amenity space and 4,349 square feet of outdoor space, as well as two levels of underground parking.
As planning continues for the development, both the timeline and future phases are still undetermined. Sandhu did say the existing office building could be torn down in later phases, depending on future market needs.
Sandhu Developments and its origins
The company is developing several other projects in Brampton, Orillia and Huntsville. They include retail/residential, office/residential, a hotel, a self-storage facility and an industrial park.
“We were getting into more into industrial, residential and that kind of business rather than where we started. We were really good and experienced with the retail originally, but who knows maybe down the road, the next couple of years will change to something else," Sandhu noted.
Today, the company has about 10 full-time employees.
Sandhu had arrived from India in 1996 with the intention of becoming a real estate developer.
He attended Centennial College where he earned a degree in engineering, then spent five years working for SKD Automotive Group to get a sense of how Canadian corporations operate.
During his time at SKD, Sandhu began investing in commercial real estate, starting with a retail plaza in Guelph in 2005. The following year, he left SKD and opened a car rental business.
By 2008, his company had 12 investments in Ontario and Sandhu sold the car rental business to focus full-time on real estate.
For the next decade, most of the work was in retail plazas, but in 2014 it also included the 27-acre Queen’s Manor Event Centre in Brampton.
Come 2019, Sandhu began to see cracks in the retail market thanks to the dominance of Amazon and e-commerce. The COVID-19 pandemic then widened those cracks.
“We got involved in building a hotel in Huntsville. When COVID happened, hospitality was one of the hardest-hit businesses and so is retail. We still have investments in retail as well," he said.
“So we started focusing more towards residential, industrial and those kinds of (investments). They were still doing well during COVID.”
Sandhu Developments’ development strategy
The company’s future will remain in Ontario, Sandhu explained.
That’s partly due to the uncertainties that arise in development when great distances are involved, and also simply because Ontario has been a great market for Sandhu Developments.
“We do get a lot of opportunities outside of Ontario, but they’re not even close comparing to the opportunities we get in here.”
Sandhu’s approach is to never get comfortable in terms of the projects it takes on. He singled out one goal for the company – to build a high-rise in downtown Toronto.
“We were very comfortable when we were doing retail plazas and all that. But then we always want to do bigger, better things,” he said.
“It's not about just making money at the end of the day, it's also about what you can achieve as a team.”
Aside from 121 Wellington St., the company is currently working on two developments in Huntsville, at properties located across the street from each other.
The two-storey 35,000-square-foot Highland Gate retail/residential plaza sits on two acres of land. It will feature six retail units and 15 lofts. Work started on the project four months ago and should complete by Q3 2023.
The 65,000-square-foot hotel across the street – a Home2 by Hilton – was started in 2019 and will be complete in January.
The five-storey building will feature 92 rooms plus an event space with a 100-person capacity. It will also be fully automated.
The plan is to have another company manage the hotel once it is complete.
The proximity of the two developments is not a coincidence.
“We bought this land from another developer for the hotel side because they didn't know how to do hotels and they were planning on doing this project (as) mixed-use development,” Sandhu explained.
“So they were working on design and planning of their next project. They realized during that process they cannot build it.”
Also in development is the Queen’s Manor Professional Centre in Brampton – a 110,000-square-foot office and retail space.
The company is working on a 110,000-square-foot self-storage facility and a 25-acre industrial park both in Orillia (just north of Barrie, in the same region north of the Greater Toronto Area).
The latter project is in the design and planning stage.
There’s no specific criteria the company looks to when deciding which projects to take on. However, Sandhu did point to a bit of wisdom his father imparted on him.
“ ’Don't lose your reputation. You can lose money, but don't lose reputation,’ ” Sandhu said. “I think that's something we strongly believe in any time we're making decisions.”