W ith a new year comes the chance to review the year that has passed, but to also think back to a time before the pandemic, to the early days at TCS. I think of the many long work weeks and countless meetings that led to TCS’ initial investments. In the course of those weeks, John and I delivered our early investment offers to a small but robust roster of initial clients that now forms the core of our present-day 300+ high-net-worth sophisticated clientele consortium.
In the early days, TCS’ strong positions in numerous Toronto real estate developments made for significant gains in what was a new asset class for many investors. Everyone who participated in the journey with us realized new wealth. Many of the positions and projects that we took a stake in were up-and-coming by nature. And for some investors, these projects required a leap of faith.
In the early 2000s, the downtown Toronto real estate sector was tiny compared to the scale that we are familiar with today’s condo developments. We chose not to primarily invest in established neighbourhoods such as Yorkville, and other historic neighbourhoods which rely on name recognition and cache for property sales. Our maverick strategy contributed to the success of our earliest development projects.
Our clients may recall the initial master-planned community, Concord CityPlace, which we invested into with a heavy conviction. With over 25 towers standing today and five more under development, we always knew that such a project would reshape the skyline of downtown Toronto. But it was the central location and mega-high density of the project that would shape and create the downtown condo boom of today.
Once we had mastered the investment model for the initial 14+ phases, we felt it crucial to find a new development. Looking for somewhere we could replicate the same double-digit annual cash-on-cash returns, we found our new focus: Liberty Village. The excitement of finding yet another master-planned community where we could invest in over 10 towers over time was galvanizing. Liberty Village became our focus to the extent that we moved our office there from Bay Street, in order to have ‘boots on the ground’ and run the most efficient bulk investing program that Toronto had ever seen.
At the time of our planning, Liberty Village was a massive city block consisting of derelict warehouses and vacant lots. It has been amazing to see in less than 15 years, this desolate wasteland becoming one of the hottest areas for the younger generation to live, work and play. With over 20 residential towers, heritage-inspired authentic lofts, commercial and retail buildings, scores of restaurants, banks and an incredible array of infrastructure, Liberty Village has everything it needs to remain one of Toronto’s landmark neighborhoods for decades to come.
The same can be said of the King Street West and Distillery District neighbourhoods. In these areas, we worked on an investment strategy with the city’s leading developers to purchase large blocks of inventory amounting to billions of dollars of investments. All of these investments have produced ROI’s in the 43% range for ourselves and more importantly, for our loyal client base.
By finding new and often hidden pockets of land in downtown Toronto, we have been able to hedge and negotiate some very valuable positions with developers and form the investment fabric that is a distinct feature of TCS’ DNA. In the early stages, many naysayers felt that Toronto’s real estate space was speculative; a risky bet in a city that didn’t have sustainable value. How wrong they were! And how vindicated we were to defy the pessimism of media pundits in the real-estate space, who prey on our attention just for clicks.
