Borrower Perspectives Revisited: Kevin Green, Greenwin
Kevin Green is President of Greenwin, one of Canada’s largest privately owned, residential property development and management companies. Greenwin’s expertise ranges from multi-family high and low-rise buildings to commercial real estate. The company professionally owns and manages more than 1,000,000 square feet of commercial space and 15,000 residential units throughout central Canada.
We first spoke with Kevin in 2017 about the Toronto market, Greenwin’s repositioning strategy and the experience of working with First National. Two years later, Kevin shares what has evolved in the Toronto market, Greenwin’s business and its relationship with First National.
Q: What has changed most in your industry and business since we last spoke in 2017?
KG: We’ve shifted our strategy from acquisition to new build/construction. Apartment buildings in Toronto have become so desirable that there is a feeding frenzy every time one becomes available. It has become pretty difficult to buy in Toronto and across the GTA.
In the past, we would buy and reposition by renovating corridors, lobbies, amenities, landscaping and suites. We would also spend a lot of time in the communities working to revitalize the neighbourhoods as well. Repositioning is a very dynamic, decision-intensive undertaking. Constructing a purpose-built apartment building requires an extensive planning and development timeline. It is a much slower process to get a building to permit.
Currently, our focus is split between property management (15,000 units), acquisition (10%) and development (90%). The demand for housing is growing exponentially, and Ontario is in desperate need of purpose-built apartment units. Our strategy has always focused on development in proximity to good public transportation.
Q: What are your business goals and what types of opportunities are you pursuing?
KG: Greenwin has always been a leader in affordable housing. We recently won a Development Lands Offering issued by Infrastructure Ontario at Yonge and College for a development that will include 30% affordable and 70% purpose-built, market housing. We also have a 100% affordable building being built in Scarborough. And there are four additional purpose-built projects going up at Wilson and Avenue Road, Sheppard and Dufferin, Wilson and Jane and in Barrie, Ontario.
Purpose-built is a different process than developing a condominium. Condominium buyers are focused on the amount of square footage to occupy or invest in. Purpose-built renters are looking for a lifestyle for a few years or are downsizing from their family homes. The quality of the purpose-built suite is essential, and services like fitness and concierge are important. You are trying to earn your keep every day and differentiate yourself with quality property management and the services that you are providing.
Q: What are your business goals for 2019 and into 2020?
KG: We are looking at ways to grow our third-party management business. Developing our own security business is a part of that. Currently, security is often an afterthought. It is a vital function, but it is usually subcontracted, poorly managed and lacks any real strategy. We are looking to change that by staying ahead of the industry and innovating without any cost impact to our clients.
Generally, we always focus on how we can create value every day for our residents. It could be landscaping, security, up keep of the building and quality management staffing. We invest a lot of time, effort and thought into making sure that our management force and trades are customer service oriented. They are front line with our clients, delivering on our management promise of constant respect and care.
Q: How is First National supporting you in your goals beyond financing?
KG: First National is a seamless part of our business. They are included right from the investigation phase on a new property. The First National team has done a great job in preparing our business to be one step ahead of what a lender requires.
I know, without a doubt, that First National is always there for us. To get the right type of loan to meet our specific requirements takes a lot of skill. First National is aware of every aspect of our business and helps us establish the value of an asset and determine whether an opportunity is right for us. We rely on First National’s expertise for all aspects of preparing an asset to be financed, from CMHC submissions to equity partner introductions. First National works hand-in-hand with our CFO and really functions as an extension of our team.
With development/construction, there are three major risks – rental rate, construction cost and interest rate. We work very closely with First National to ensure that our assumptions and metrics are aligned properly. We also leverage the industry and market knowledge of First National experts for critical elements including vacancy, saturation, soil conditions, ground conditions and construction costs.
Q: What do you value most about your relationship with First National and Peter and his team?
KG: Every person that we deal with is knowledgeable and timely. Ultimately, we really enjoy working together, which makes the whole process great. First National is extremely proactive. If we’re missing something, they inform us and then tell us what to look for and highlight things we may have missed.
Q: What value are you realizing from First National’s ability to provide smart risk solutions?
KG: In a leveraged and borrowing world, it is critical to have information and insights quickly about the viability of financing an asset. We may have a great idea or project, but it could be a non-starter right from the beginning for whatever reason. For us, we want to know right away if the lending matches up with our goal for the asset.
A large majority of our business focuses on completing due diligence for projects that may or may not come to fruition. Getting fast answers about financing saves us a lot of time and effort. It’s an important measure for Greenwin on whether a project is going to be successful.
First National is transparent about its risk appetite. Knowing that early in the game saves us a lot of time spinning our wheels. And our process is highly collaborative. First National recommends modifications that we can make in order to put us on a more productive path in terms of financing. When we receive opinions or suggestions from First National, we have full confidence in what is being communicated. We usually don’t think about challenging it, but if we do, we challenge it together. The process is enjoyable because we like and respect the expertise at First National. They are smart and they get it.
Q: What do you believe motivates First National within your relationship?
KG: First National is a quality team that is committed to industry leadership. Working together, we are often able to see value that other companies overlook and work collaboratively to develop those properties and realize that value.
We have confidence that First National wants our business to succeed. Our collaborative process is enjoyable and grounded in respect. We have a real ease of working together and don’t have to invest inordinate amounts of time to get things done. The speed and productivity is extremely important to us. First National has trained us to supply what is needed, so there are no obstacles to quick decisions. We have a mutual respect and truly enjoy working together.