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Borrower Perspectives: JD Development

  • First National Financial LP

Founded in 2010, JD Development Group focuses on purpose-built student residences, residential development, condos, low-rise houses and town homes. The company’s strategy focuses on developing and building high-quality residential product with competitive cost to provide a different way of living. For the past decade, JD Development has built its management team and concept to deliver on that strategic plan. Jason Qi is the Director of Business Development and Strategy at JD Development. In his role, he focuses on the company’s growth, equity strategy, financing, partnerships and high-level management of building projects.

We spoke to Jason about his view of the industry impacts resulting from COVID-19, whether or not JD Development has altered its vision for growth and how the company’s relationship with First National has propelled the growth of the business.

Q: As we settle into the new normal resulting from the COVID-19 crisis, what do you feel are the biggest industry impacts?
JQ: We are seeing impacts in certain products. We knew retail was challenged, but COVID accelerated that trend. There is also a rethinking of office and how to effectively use that space. The multi-residential sector has really shined through. For us, we have made changes in how we run the business, incorporating virtual capabilities in how we lease and sell. I don’t think we’ve seen the full financial impact to the industry yet. The way people borrow and banking relationships may still change and adapt.

Q: What changes have you seen in your business and market, and how are you adapting?
JQ: We do a lot of student housing and multi-residential rentals. Much of our rental process is now virtual, including suite tours and document signing. Our maintenance levels were already very high, but we’ve taken cleaning, disinfecting and sanitizing to a new level. We have also been opportunistic in finding good acquisitions and partnerships, as some owners have struggled to adapt to the new normal.

Q: What is your vision for growth? Have you modified it given what has happened so far in 2020? How so?
JQ: We have a significant market presence in student housing. We build buildings, but more importantly, we also create communities. Our goal is to deliver a real home away from home for students, ensuring they have a safe, secure and convenient environment so they can focus on their studies. Besides the suites, we offer amazing amenities including a movie theatre, VR room, games room, and award-winning restaurants. Our intention is to continue growing in our home base in Waterloo, while scouting other land for purchase for additional development.

On the low-rise side of our business, we have a good platform of detached and town houses. Construction will begin on two more properties soon. In 2019, we won a builder’s award for the most creative single home over $1 million in London, Ontario. So we want to keeping growing that momentum in the sector.

Our overall strategy has remained consistent. There is definitely more planning and foresight happening on the construction side as a result of COVID. We are preparing for any eventuality including a possible second wave. With schools going virtual in September, we are anticipating and adapting to the new trends in tenancy.

Q: How is First National supporting you in your vision for growth beyond financing?
JQ: First National is an extension of our team and a vital part of our strategic counsel. Our advisors support us across the stages of the development process, including acquisition, planning and finding partners/consultants. First National always goes the extra mile to ensure a smooth and successful development.

Q: Can you describe your first deal with First National? What stood out to you about the experience?
JQ: Our first deal was the financing of Blair House, one of the towers in Philip Square. CMHC had not done a student housing deal of that magnitude in the private sector in some time. There were also some aspects of the building, which fell outside of CMHC’s policies at that time. Henry and the First National team navigated all of those different hurdles and still secured the financing in an efficient time period. I was impressed with how they stuck with the deal, were unafraid to push boundaries and knew how to negotiate with CMHC. We were somewhat reticent, but Henry was confident that we could get the deal done. With CMHC becoming a reality for us, we have adapted our strategic plan to deliver more high quality rental product.

Q: How does your First National advisor empower you in achieving your goals?
JQ: Henry is incredibly knowledgeable. If he doesn’t know the answer, he can reach out to someone at CMHC or First National that does. We collaborate as if he is part of our team. He knows what our whole portfolio looks like, and how we want to grow. I really appreciate how Henry always lays out several options, explains the pros and cons and helps us understand the whole picture. Then we can pick and choose the solution that is right for us. Henry always provides timely insights on how First National and CMHC would perceive our plans.

Q: What do you value about your relationship with First National?
JQ: First National is one of the last handshake institutions. With the team’s superior product knowledge and simpler reporting system, we can shake hands on a deal and know that Henry can deliver on exactly what we talked about. There are no hurdles or hierarchy. Henry also really cares about our business. He genuinely wants to see us grow and succeed. Collectively, both of our companies want to address the multi-residential gap in Canada, so we are motivated to bring quality rentals to the market.

Q: Any final thoughts?
JQ: I can’t stress enough how valuable the First National partnership has been to our company. Working with our team there has always been a completely different experience that transcends the typical lender/borrower relationship. In the past two years, we’ve done several financings including construction and long-term financing for student housing, land loans for properties in Mississauga and Richmond Hill and loans in the multi-residential sector. We deliver on our end, and First National always stands by its commitment. The relationship has propelled the growth of our business, both in terms of financing and strategic counsel. It is part of our process now to consult with First National at the early stages of every project.