Originally posted on Livabl
The Toronto new construction industry has grown rapidly over the years. Now one of the most competitive and sought-after cities for real estate in the world, Toronto is home to influential projects that have shaped the urban landscape as we know it today.
Amidst all of the changes the industry has seen, one local real estate investment company has been evolving alongside it. For almost 20 years, The Condo Store Group of Companies (TCS) has played an instrumental role in shaping Toronto’s new construction space, participating in some of the biggest residential projects to rise in the city and transforming how such condo developments are bought and sold.
Livabl reached out to Simon S. Mass, CEO of TCS, to learn more about how the company has grown over time and its plans for the future.
Livabl: TCS has been in the Toronto condo industry for over 16 years. Throughout that time, the city has grown immensely, and Toronto has become one of the most desirable and competitive places to buy real estate in the world. Looking back on this time, what were the biggest moments for the company, and how have they had an influence on the real estate industry as a whole?
Simon S. Mass: It’s incredible how some of the more monumental deals for our firm came from seemingly innocent situations or chance meetings. It is an important lesson for all aspiring entrepreneurs and executives — take all the meetings, ask questions and talk to different people, and always remember to be a true professional.
We started to boom just as Toronto and the downtown condo sector was moving as well. The one deal that cemented our leadership position initially, and truly provided the blueprint for what we still do today and what we are known for, relates back to the late 1990s when Concord CityPlace opened up its master-planned community at Spadina Avenue and Lake Shore Boulevard West. At that time, developing in that area was unheard of, and even more so when it came to an out-of-province developer from British Columbia that wanted to have over 25 towers on the site.
Several meetings later, we established a relationship that still flourishes today. I often speak with Dennis Au-Yeung, who heads Concord’s operations. As is the case with many of my relationships, they stand the test of time due to a desire to always create a win-win relationship for every single party involved in a deal.
Following the success with Concord CityPlace, I had the great fortune of being introduced to Walter Jensen, who was working on his own master-planned community in Liberty Village. Same concept, just a five-minute drive west, and so came another decade-long adventure for us packaging deals together over eight buildings which now form part of the high-rise landscape of the Toronto skyline. I’m still in constant touch with Walter, and this relationship has also led to others where we have had the good fortune of working on billions of dollars worth of pre-construction inventory across downtown Toronto.
These introductions and meetings with development leaders in Toronto subsequently led to many other deals and set the groundwork for our core bulk business. From our success and high-profile clients who, in-turn, touted our talents to others, many real estate brokers and small firms started to try and copy our business model. We generally look at this as flattery, unless of course there was malice, direct stealing or false claims being made by unscrupulous individuals. But we do know when there is success, there will be mimics, but we just keep pushing forward. We changed the game with every entry into new neighborhoods, and we’ll keep changing it in different ways as we move forward.
L: As the Toronto condo market has grown, so has the number of sales, marketing and development companies who want a stake in the industry. How does TCS set itself apart from other competitors in Toronto, and how do you think TCS is changing the space?
SM: The three T’s — trust, tact and tenacious service — have led to our success. Frankly speaking, to conduct oneself with a strict code of ethics and integrity in a sector that has far too many ‘consultants’ looking to make a fast buck, is a means to manage and maintain a leadership position.
The companies and brokers that claim to do what we do, they try to match our volume by attempting a sale or two in every development that launches in the Greater Toronto Area, and their client email programs will reflect that. Continued success comes from having infrastructure that consists of talented professionals who pride themselves on doing the right thing for long-term growth. We spend millions of dollars each year managing our firm’s analytical approach to picking winning projects by researching and negotiating relentlessly on behalf of our clients, and notwithstanding, our own investment portfolios that are part and parcel of every deal that we present to our clients.
As a truly investment-first firm, with ROI as the main criteria in deciding what we will endorse, we select the best opportunities by assessing the location and quality of developer. We then buy thousands of units in bulk each and every year. Nobody else can do that unless we generally look at changing the definition of bulk to five-plus transactions. There is nothing wrong with advertising to gain traction in any sector, but many continue to use our brand and a variation of our company name to falsely claim they are us, and to confuse the public into thinking they are working with us. It’s frustrating and often a costly process, as these individuals and firms just don’t care and often avoid the normal, professional ways of doing business.
For years, many developer clients have referred to us as the Costco of the sector, which I find to be a huge compliment, as it is a brand synonymous with giving its members a great deal at every level. We don’t have the vast range of goods that Costco does, but we bring our private clients three to five deals per year. We want all of them to purchase or have a chance to purchase in all of the deals we present. If we have only five units in a building that a developer allocates to us, we can’t bring that to the group of 300-plus as we won’t have enough to satisfy those who would want to invest. Therefore, that is not a good deal for us, and we leave that type of pre-construction sales program to others. Instead, we will take a minimum of 25 percent to a maximum of 75 percent of the units in a development project to ensure that all of our clients who want to invest at that time can do just that on an extremely easy-to-manage platform.
As the space gets more crowded with other contenders, we will continue to set ourselves apart by not acting like a standard real estate broker or firm. We don’t bombard inboxes with emails every week claiming that ‘this is the best deal ever,’ and then repeat it every week with yet another deal to try to harvest a sale from nothing more than spamming everyone out there with an email account.
When we send our offers to clients, they are truly special opportunities that are vetted and derived from a trusted source, where the principals of the firm are also invested side-by-side and with the same pricing model and program. Our clients know that all our offerings bring about solid double-digit ROIs because we have that track record and trust, built not from a few months or a few years, but for almost two decades.
L: COVID-19 forced many companies to quickly pivot their business, whether it was moving everything 100 percent online or navigating a sales launch when there was a lot of market uncertainty. What do you think were the biggest challenges for TCS in the early stages of COVID-19 and how did you overcome them?
SM: Other than the worry and the stress that we faced for our own families, friends and team members at the onset of COVID-19, we are fortunate and blessed to have continued to grow during the 2020-2021 pandemic. Our Q3 and Q4 were among the strongest on record, and our investors saw ROIs on exits during the past year of 60.9 percent on average.
We did face the challenge of managing our large workforce and navigating the ever-changing rules, direction and advice from our government on what we were allowed to do and how we could work from our offices or homes. With hard times comes challenges, and we strived to make the most of the downturn by looking for opportunities that others were too scared of embracing.
I still recall the long days and nights of calls with clients, generally medical practitioners who had their own challenges to work with, and having myself and my partner ask them to think outside of the box and join us in buying an entire subdivision in south Whitby from one of the leading low-rise developers in the country, Fieldgate Homes. It was an uphill battle, but true to our foundation of finding investment opportunities that are hidden gems, I now have the privilege of informing my clients that their $60,000 investment has grown to more than $200,000 in value in a year and it’s still growing.
L: When it comes to cultivating new ideas, as the CEO, what is your approach to TCS’s innovation? How do you go about building new directions, establishing new relationships and fostering new plans that lead to success?
SM: I think the ability to innovate is crucial in any business, but I think the concept gets skewed and executives and leaders think that innovating always means massive shifts or the best new idea of the year. Innovation can be small and still lead to a change in your business that will spur an increase in sales or reduced expenses, whatever your goal.
So, that is what we focus on — consistent analysis of all our business practices .Is something not working? Let’s find a new way. Is something working, but there is an opportunity for improvement? Let’s look at what that change will result in for the business. There is motivation and inspiration all around you. Rich Kuypers, my CMO, and I study other industries extensively when looking at our path forward, as we value how others succeed. We look to learn from individuals and firms that are much bigger and successful than ours by far. Learning has no limits.
L: Toronto real estate may have international attention, but the urban development industry is a small world. Why do you believe some businesses are motivated to take inspiration from competing brands? What advice would you give to growing companies to protect themselves from copycatters?
SM: My personal opinion is that the legal route should be the last resort, but use it if you feel someone has crossed the line and it is hurting your business substantially. We have several matters open in the courts currently, but only because they were malicious and didn’t respond to our professional courtesy outreach.
The best thing to do to protect yourself is continuing to offer a strong product and deliver the best service possible. For example, I know that I can offer my clients what no other investment company in Canada can, so I am going to focus on that, and our clients will get that benefit and support us going forward.
Copycats will only affect your business if you let them. If they are focused on what you are doing, they are not focused on what they are doing, and their offering will suffer accordingly.
Lastly, I always try to speak up and talk to these people. Ask them questions about their business and challenge what they are claiming in a professional manner. You might be surprised by the results of those conversations, and the fact is that there will always be some bad apples out there who are open to cheating.