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December 8th, 2010
 
This week’s Buzz Talk is with Graham Chalmers, VP of Construction and Partner at Davies Smith Developments, the company behind such projects as Eleven Superior [map] , ONYX [map] and Ironstone Condominiums [map].
 
We find out Graham’s thoughts on what the future has in store for the condo scene in Etobicoke as well as Downtown, and even get a little lesson on geothermal technology in the process!
 
Let the Buzz Talk commence!
 
BuzzBuzzHome: How did you get your start in the business?
 
Graham Chalmers: I worked for 20 years as a construction server and project manager for quite a few different developers in the ’80s and ’90s.
 
Davies Smith came together in 1999. It was Ian Smith and Walter Davies who had a partnership down at the distillery district and we were managing the whole complex down there.
 
We were asked to build several condominiums in the project, and we built 3 fairly large buildings. I joined in 2000 and we worked on that site for 4 years or so before we moved on to our own development. We found it was more sensible to go out and buy land and do everything ourselves instead of doing it for other people because we had everything we needed to build projects.
 
From 2003, Walter started pulling out little by little as he wanted to retire so I took over the other half of the company.
 
BBH: Davies Smith aims to bring downtown living to the suburbs – how to you go about doing this?
 
GC: We like to offer a slightly higher level of finishing and try to build relatively modern buildings, more like downtown buildings but in the ‘burbs. We built a really nice modern building in Whitby and Etobicoke and are about to do the same thing in Burlington.
 
We like to stay within the GTA but don’t mind going a little beyond the boundaries. It’s sort of modern building, not over the top, but something new in whatever neighbourhood we move in to.
 
BBH: Eleven Superior is part of a huge amount of building in Etobicoke – how do you envision the area looking in 10 years time?
 
GC: I certainly think that the people that live in Etobicoke, in homes, are made up of quite a few demographics.
 
There are a lot of 50+ people who live in detached homes and we feel that will be a good market for condos for a long time to come, as well as for people who like proximity to downtown but don’t want to live right down there.
 
We feel Etobicoke is key because it has great shopping with Sherway Gardens, lots of access to the lake and good transit to downtown. Our office happens to be in Etobicoke so maybe we’re a little biased!
 
We built two condos right on the water and now we have a new one West of Park Lawn and we really feel that this is going to be the next hot area.
 
BBH: Any tips for keeping warm this winter?
 
GC: (laughs) Buy one of our condos – they’re really well insulated!
 
BBH: Ironstone Condominiums will run on geothermal technology once it’s completed – can you tell us a bit about this – where did the idea come from? What benefits does it have?
 
GC: We’re always being approached by people that have new ideas and technologies and many of them we can’t do because they’re somewhat self-serving for the individual that brings them to our attention.
 
About 4 or 5 years ago we had a few people suggest that we switch over to geothermal and we looked into it and decided that although it’s a new idea for condominiums, it really is a great idea because with gas or any fossil fuels, the prices never stop going up.
 
The beauty about geothermal is the heat of the earth can never go up in cost – it’s going to be constant for ever, so it beats the heck out any other system!
 
We drill about 500 feet into the ground with a couple of hundred drill holes and fill it with water and re-circulate it. It’s constantly warm because the heat of the earth is around 68 degrees F I think, so we constantly have this renewal of heating that we can give to a whole building. It’s just the greatest thing!
 
It’s certainly an expenditure that we have to put up at the beginning but eventually for the condominium it’s a win-win situation and I think it’ll be the way of the future. I think developers realise that there’s such a demand by the public for green initiatives.
 
Most builders don’t do it because it’s an enormous financial output in the beginning so the only way it can ever work is a ‘payment plan’ of sorts – if we had to pay all of the money up front then the cost of the condos would go up. This way it doesn’t impact the cost – the mechanical system that supports it are already part of the cost if we had done a conventional system.
 
Mostly these geothermal buildings are done by the government because they have a never-ending supply of money. Usually the private sector just doesn’t do this, so we’d like to consider ourselves as pioneers somewhat!
 
BBH: What’s your favourite vacation destination?
 
GC: I’ve done Las Vegas a few times which probably isn’t a great idea, but I do like it there!
 
BBH: With your background in construction, what’s the biggest change you’ve seen in your 20 years in the actual construction of a building?
 
GC: Some things never change – bricklaying and what not. I would say the design – allowing to have a much more efficient building is probably number one.
 
The thing about modern condos from say 10 years ago, the building code has been revamped and the insulated value and the exterior of the buildings have to be air-tight, so they’re head and shoulders above anything we used to build decades ago. The exterior cladding and insulation for instance help make the buildings be much quieter.
 
Buildings I built in the 80’s for example had a massive heat loss. We would do things that were perfectly legitimate in those days and were reasonable when fuels didn’t cost so much but nowadays it costs so much that the buildings have to be so much better.
 
The exterior of the buildings have really come a long way.
 
BBH: What’s the best part of your job?
 
GC: You know, I love it all, I swear I do. There’s no parts I don’t……..well there’s some parts I don’t like I suppose!
 
Doing the project from the very beginning to end, because at Davies Smith we buy the land, we develop it and then we put it for sale, do the re-zoning, get the permits, build, finish and then customer service – we do all of that ourselves and I’m involved in it all.
 
We’re probably one of those rare entities that we have staff that do everything. As a team within the company, bringing it from the very beginning until the final people move in and we register the building, it’s quite an amazing thing.
 
BBH: What do you see happening to the GTA real estate scene in the next 10 years?
 
GC: Condos have now overtaken detached homes in numbers of sales and I don’t think that will slow down, partly because of our immigration policies – we have 100,000 people coming into Toronto every single year and I don’t see that changing.
 
Because of the shortage of rental space, now condos in many ways become a new investment in rental for people so I can’t see the market slowing down at all!
 
Maybe the cost of buying a condo will not go up that much more. It’s hard to believe that a very average condominium is $400 a square foot these days. To us in the industry it’s like, when is it going to end?!
 
It’s not an easy thing for us because when we begin a project and put it for sale we’re still not going to be building it for at least a year so getting the construction budget in line to match what will be coming up in a year is challenging.
 
I do definitely think we’re going to continue with condominium growth.
 
BBH: What part of the city do you call home?
 
GC: I’m in Northwest Mississauga, I’ve been there for 11 years.
 
BBH: What do you look for when investigating a potential site?
 
GC: I really believe in having a feature of some sort. Whether it be proximity to downtown, good transit or what not.
 
Our Mimico site (Eleven Superior) for example – it’s close to downtown, has good transit and has good exposure to the lake. If you have something that makes people want to live in that location, that’s the key.
 
If we were to tell somebody that we were going to build a condo at I don’t know, say…..Highway 400 at Finch, they might just go ‘OK, thank you, but I’m not interested’.
 
You tell them they’re going to be a block away from the lake, with a good view of downtown on a good transit route – and the thing about the Eleven Superior site is that there’s a massive revitalization that is being put up by the city and they’re putting money into that neighbourhood – it’s going to be gorgeous within 5 years.
 
We try to get a neighbourhood that is definitely on the way up.
 
BBH: What’s up next for Davies Smith?
 
GC: There’s a problem in the industry that it’s difficult to get lenders on board, particularly for large projects. We would like to keep our condos to around 150 suites.
 
We’d like to shy away from the giant buildings and concentrate a little more on boutique condos. For us, that would be the most practical way to do it, and obviously try and get a location that is desirable to the public.
 
The numbers work well too – for 150 suites you have a fairly good economy of scale and at the same time it just makes more sense for those types of projects instead of the mega mega projects.
 
BBH: Anything you can give us a hint on!?
 
GC: The only thing I’ll say is that we’re constantly looking up and down the lakefront because we feel it’s where we’re going to get the most desirable locations. So Etobicoke and West.
 
If we can find something there then we’ll definitely look at it!
 
Many thanks to Graham for taking the time to talk to us. For information on Davies Smith projects please click here.

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