First National Financial LP

Borrower Perspectives: Junic

  • First National Financial LP

Founded in 1985 by Charles Tremblay, Junic originally focused on building town houses and low-rise condos in the Quebec region. By 2010, Junic had built approximately 3,000 units in Gatineau on The Plateau. In 2015, Charles’ son Nicolas took over the business as General Manager and shifted Junic’s vision. His goal focused on building higher-density rental properties and growing the portfolio by using existing land and pursuing ongoing development. In 2017, Alain Grandmaison joined Junic as Executive Vice President. He manages all operations including financing, real estate management, rentals and administration.

We spoke to Alain about his view of the industry impacts resulting from COVID-19, whether or not Junic has altered its vision for growth and why First National is a great fit for the new generation of developers.

Q: As we settle into the new normal resulting from the COVID-19 crisis, what do you feel are the biggest industry impacts?
AG: In the short term, it is hard to get workers. With fewer workers wanting to be on site, our costs to attract and retain them are going up. We are also experiencing production delays. Some materials are hard to come by. For example, we had a situation where we had to send someone with a pick up truck to get doors for our 18-unit building. Those combined challenges have been extending completion schedules. We can only have a limited number of workers in a unit at any given time, so construction is taking three to four months longer than usual. For us, there are so many opportunities in the market right now. It’s frustrating because we can’t go as fast as we want or are able to go to match the pace of the market. With the slow down, both our production and opportunity costs have increased.

Q: What changes have you seen in your business and market, and how are you adapting?
AG: We are in a changing market, where many people prefer to rent rather than own. And renters, especially the younger generation, have high demands in terms of service and amenities. We have made it our business to deliver both. Innovating, complying with new health regulations and pushing the envelope on amenities have associated costs. We are also seeing costs coming from more intensive management. With more people at home now, there is more garbage, more damage to units and more assistance required. We’ve had to hire additional concierge staff, trades people and building managers.

Q: What is your vision for growth? Have you modified it given what has happened so far in 2020? How so?
AG: We pivoted our vision in 2017 and set a goal to build more than 3,000 units in 10 years. In 2018, we began construction on an urban village, with mixed use and public space. That project will be opening in 2020. We are also planning a higher density project, which includes two 10-story towers. That project will break ground in January 2021. Within those projects, we are trying to innovate in different ways. With Agora, our urban village, we are looking to be the first in Canada to become certified as a well community. Well communities account for the health and wellbeing of tenants within development and operation. The certification requires specific protocols, but we feel it’s an important investment because it matters to our new generation of tenants. Speed to market is the only thing we’ve had to modify, and that’s been beyond our control. There is a shortage of units in the region, and we are the sole land owner. So we are trying to expedite projects by finding innovative and aggressive financial partners that understand and support our vision and ambition.

Q: How is First National supporting you in your vision for growth beyond financing?
AG: I speak with my originator Yohan Kadoch every week. We talk about financing, but Yohan is also a great source of information. We operate in a different market, away from Montreal. There aren’t many projects similar to ours. I consult with Yohan about what he’s seen with other clients – products, challenges and solutions. He’s very interested in our projects and how he can best support us with precedents and innovation.

Q: Can you describe your first deal with First National? What stood out to you about the experience?
AG: I met Yohan before we did our first deal. Another company we know referred us. Our first meeting wasn’t a typical sales meeting. He was really knowledgeable, and we were able to discuss financing on another level. He came to site to talk directly, which was so refreshing. He just said to me, “try us out, you’ll see, we’ll deliver.” So we sent him a deal – our 149-unit Central Apartment building. We were being a bit aggressive, but he worked the numbers and secured CMHC financing. That was the start of our relationship, and Yohan proved that he knows what he’s talking about and delivers on what he promises.

Q: How does your First National advisor empower you in achieving your goals?
AG: Yohan supports everything we do. His turnaround is quick. Every project is seamless. He always works to find a way that fits for First National and for us. We are able to have intelligent discussions, and he is unafraid to challenge me. We can discuss, agree or disagree, and I find value in all of our conversations, interactions and engagements. His ability to recognize what we’re going through goes beyond empathy. He bases his perspectives on experience and precedents. Yohan and I learn from each other. And I find that refreshing. It hasn’t happened in a long time.

Q: What do you value about your relationship with First National?
AG: Adaptability. First National’s solutions don’t interfere with our success. We have CMHC files and conventional files, covering every stage of the evolution of our projects. First National is willing to go out of its comfort zone to be a financial partner for us, which is rare in the industry. Yohan and Michael Williams, Regional Vice President for Eastern Canada at First National, go the distance to support us. I have actually found a financial partner that is interested in my business and dedicated to growing with me. There is a lot of comfort in that endurance and longevity. As Junic evolves, First National will be beside us, evolving with us.

Q: Any final thoughts?
AG: We are a part of the new generation of developers and builders trying to create product for the next generation of tenants. I think that is really interesting for First National. We’re listening to where the market is going and want to develop more. We also want to innovate with environmental initiatives, tenant wellness and adapting to different lifestyles. So the potential of partnering with us is appealing. We own a lot of land, we’re the biggest builder in Gatineau and we have the potential to make a significant impact. Overall, Junic and First National are a great fit. We are in a really dynamic point in our evolution, and First National is helping us move our vision forward. First National adjusts to us rather than making us adjust to rigid templates or check box lending. It’s just so much easier to do business that way.