First National Financial LP

Borrower Perspectives: Ed Geric, President & Kevin Norman, Vice President, Finance, Mike Geric Construction

  • First National Financial LP

Since 1968, the Mike Geric Construction brand has been synonymous with quality and community. The company began as a single-family homebuilder in Victoria, with a focus on Royal Oak and the surrounding neighbourhoods. When Ed Geric joined the company 20 years ago, he initiated the transition to multi-family development, focused on condominiums. For Ed, it was vital to maintain the same level of quality in its condo buildings that Mike Geric Construction had become known for in its single-family homes. He recognizes that buying a home is a significant financial investment, and he wants to ensure that buyers always get their money’s worth from a Mike Geric Construction property.

Growing up, Ed’s father Mike taught him to work hard, deliver a good product and never scrimp. When Ed joined the business after working as a C.A., it was important to him to “get out there” and learn the business. In his early years, he spent the majority of his time on site, with a tool belt, learning what it really meant to bring Mike Geric Construction’s vision of quality to life. He tries to instill that same value in all of his employees, encouraging them to tour development sites, understand the business and see what goes into Mike Geric Construction quality.

Kevin Norman is a C.A. by training. He joined Mike Geric Construction in 2016, after spending three and a half years at another local developer and five years at a mortgage investment corporation.

Ed and Kevin share their unique perspectives on the Victoria market, Mike Geric Construction’s vision for growth and why they value First National’s flexibility and commitment to dialogue, idea sharing and concept refinement.


Ed Geric, President

What are your perspectives on the Victoria market and where do you see it going?
EG: It’s been quite a ride in the West during the past four or five years. Recently, buyers seem to have a little less urgency than maybe a year and a half ago, but the market is stable. People are looking at product, but they are just taking more time.

Victoria is different. We don’t have the inventory or mass building that you may see in Vancouver. In my opinion though, Victoria is an undiscovered jewel. We are starting to see an upswing of people moving from Vancouver. And Vancouver developers are starting to take a more active interest in the island. Competition for land and properties is mounting. For example, I bid $6 million on a property in Sydney, and I wasn’t even close. A developer from Vancouver bought it for $10 million.

What is your vision for growth?
EG: We are focusing on three key areas to drive growth: purpose-built rentals, affordable housing and modernized development approaches.

From our experience in the condo market, we understand the retiree and downsizer demographics really well. We have buyers in their 60’s and 70’s who are buying $1 million condos from us. But many others don’t want to invest in a condo – they don’t want the responsibilities of home ownership but they want the luxuries of a high-end property. They can absolutely afford three or four thousand dollars per month on rent. However, they are challenged with finding product that offers the size and amenities that they want. We want to create buildings that are far better than what’s currently available in the rental market.

The municipalities are making a big push toward affordable housing, and are constantly questioning whether we are integrating affordable housing into new developments. We are currently evaluating a few properties based on affordable housing feasibility, but I think that municipalities and the province will have to take a longer-term view and play a greater role in the growth of affordable housing in Victoria.

Young people are challenging us to think differently about development, sustainability, materials and design. We are making a concerted effort to modernize our development approaches, moving away from a status quo mindset. Recently, we partnered with a company called Arise Developments. The team there has a crystal clear vision of what young people want. That collaboration energizes me. We’re starting to consider what units will look like 10 years from now based on lifestyles patterns of young people and technological/environmental developments like electric cars.

How does First National support your vision with its more than a lender approach?
EG: My conversations with First National are continually focused on, “how can we help you? What projects do you have on the go?” Paul Steckler, our originator, wants to be involved with us during the planning stages to provide ideas and alternatives. That collaboration and ideation at the planning stage is very valuable.

In a traditional deal, you usually have the rezoning, building permit and development permit in place -- and you may have even pre-sold units -- before you reach out to a lender. At that point, you don’t have much flexibility, which may affect the value of the financing package.

Having these ideation conversations early on gives me fresh perspectives about planning, development and conversations with the real estate team. It’s also when I have the most flexibility to make changes or adjustments that can optimize the project.

That type of involvement makes First National feel like a part of my team. We’re talking about more than rates and fees. There is a genuine interest in our project, its progress, solutions we may need and our future plans.

In reflecting on your relationship with First National, what stands out most in your mind?
EG: We’ve collaborated with First National on one project so far. The relationship has been wonderful. The market was favourable, but we did encounter a fairly significant challenge. First National was flexible. When we were working through the issue with Paul, he never talked about this department or that department. The solution was one overall concept and one approach.

As the market begins to change, I anticipate that we will have to work harder and smarter to make deals happen. But I feel confident that our deals with First National will be collaborative and tailored to our needs, rather than trying to fit into rigid structures like other lenders. Even though the collaboration may get a bit tougher, I actually welcome that because I think great ideas flow out of cooperative thinking.

I also appreciate that First National has a great deal of local knowledge. As a developer with a 50-year history in Victoria, I really understand this market and have hands-on knowledge here. Many national lenders have standard policies, regardless of region or locality. It’s critical to me to work with a lender that has local presence and can tailor things locally.


Kevin Norman, Vice President, Finance

What are your perspectives on the Victoria market and where do you see it going?
KN: With a strong economy, the overall population in Victoria continues to grow. We’re seeing people coming from Vancouver as a result of affordability and retirees from Alberta and Ontario. Demand definitely outstrips supply, especially in terms of new product. The current vacancy rate is at approximately 0.5%.

Obviously, Victoria is on an island, so land isn’t abundant. We are starting to see prices rise and more serious conversations about affordability. There is a growing trend toward infill, building density where there may have been single-family homes or other types of properties. 

Where do you see the opportunities?
KN: With demand continuing to outstrip supply, development presents a significant opportunity in Victoria. We are focusing on town centres within the municipalities, close to shopping and transportation hubs. Those locations are ideal for density, especially for millennials and downsizers.

What is your vision for growth?
KN: We want to acquire land in municipal town centres so we can build communities that integrate public transport, shopping and basic necessities. The land market is becoming more competitive as Vancouver developers start to branch out here. While there is increased pressure on local developers like us, our local track record is becoming more of a differentiator. Mike Geric Construction has a solid reputation for building strong communities and vibrant neighbourhoods.

How does First National support your vision with its more than a lender approach?
KN: Paul Steckler, our originator, has sat in my seat before. When I talk with him, it’s like talking to a colleague. He is a great sounding board for my ideas, and introduces new concepts that I may not have considered. Working with someone that has walked in my shoes is really refreshing. I’m not constantly trying to sell projects to him. We dialogue about how we can make projects work, find improvements and refine concepts, which ultimately helps to shape and simplify the financing structure. Paul has a unique perspective with his ability to see things from both the client and lending sides. Having that type of voice at the table is incredibly beneficial to what we are trying to accomplish.

How has First National worked with you to find opportunities in the alternatives?
KN: First National absolutely did just that on the fourth phase of our Travino project. We found ourselves in a challenging situation, and First National provided a workable solution.

We had worked with the same lender for phase two and three. And it was our plan to proceed with that organization for phase four. We had a pre-sales campaign for the previous phases that required only a $25,000 deposit. We went to market with that same deposit scenario for phase four.

However, that deposit scenario proved problematic for our existing lender as a result of risk exposure. So at the 11th hour, we had to seek an alternative.

Paul had been reaching out to me. I called him and explained our situation. We had an excellent dialogue and shared a lot of ideas. I explained to him that we already had 30 units sold within this deposit scenario.

Right away, Paul wanted us to work collaboratively on building our story – where we were in terms of pre-sales, the rationale behind our pre-sales deposit amount and a profile of our purchasers. The last thing we wanted to do was to have to go back to our purchasers asking for greater deposit amounts because of financing issues.

In the end, we secured the financing that we needed. In fact, our minimum financing requirement was $31 million. However, Paul helped us secure $34 million by recognizing equity in prior phases, which proved beneficial to the final phase of the project. We were able to honour all of the initial pre-sales deposits and devise a different campaign for our remaining pre-sales to meet our needs and First National’s credit requirements.

Currently the project is more than 80% sold. We avoided having to go back to buyers to ask for more deposit money, which would have raised purchasers’ concerns and potentially tarnished our reputation.

What stands out most to you about your relationship with First National?
KN: My relationship with Paul is a true partnership, based on continual idea sharing. I always feel that he genuinely wants to do whatever possible to make our projects work. And it’s not that he always says yes either. If Paul doesn’t feel that a project is a fit for First National, he tells me early on. I’m ok with a no. I just don’t want to invest too much time to arrive at that conclusion.

When we discuss our projects, Paul never closes the door. He offers advice about what we could do or how we could formulate a more attractive package. I find his insight incredibly valuable in helping us improve our existing concepts. And as I’ve mentioned before, Paul has walked in my shoes, which is a distinct advantage. His understanding of my requirements, deliverables, expectations and challenges is a significant benefit for the process.