BBH: And just going back a bit to your roots, how did you first get involved in the\u00a0building industry?<\/strong><\/p>\nSS: My father joined his brothers in 1964 in the building industry where they built\u00a0apartment buildings, triplexes and duplexes in different areas [of Montreal]. His brothers,\u00a0they actually started in 1956 so he was a banker before that and he joined them when he\u00a0was 27-years old in 1964.<\/p>\n
Even at a very young age, I remember I had a project at school when I was eight-years old and they said, ‘How do you see yourself in the future at 35-years old?’ and I drew myself as a builder.\u00a0So at eight-years old, I wanted to be a builder. I knew that\u2019s what I wanted to\u00a0do.<\/p>\n
I got involved, officially in 1991. Because before that, I worked for a couple years as a\u00a0foreman for my father. But in 1991 I saw a small piece of land where I wanted to do it\u00a0myself and I started a project under Samcon as the first Samcon project.<\/p>\n
BBH: You saw yourself going down the building career path from 8-years old. Did you\u00a0ever consider going a different route?<\/strong><\/p>\nSS: The majority of my life, I\u2019ve always felt strongly pulled toward the building industry.\u00a0I know that at one point when I was in high school, this is back in the early 80s, there\u00a0was a big boom in software development so I had just looked a little bit at that\u00a0saying, \u2018Hmm. Should I get into this new field?\u2019<\/p>\n
But it was very short-lived. I had thought about it, but in the end I just stayed with\u00a0business.\u00a0And I think part of me said, \u2018You have your family tradition in it, my uncles did it all\u00a0their lives, my father, they worked hard all their lives and were known in the city for it.’<\/p>\n
Even though it was on a smaller scale in those days, I think I realized that there was a\u00a0value in pursuing that field because the work that my parents and uncles had done all\u00a0their lives so I had felt that I was better off to continue that tradition. And I\u2019m very happy\u00a0that I did.<\/p>\n
BBH: Your work has focused on urban redevelopment. What does that involve?<\/strong><\/p>\nSS: To me, that’s really what gave me the most satisfaction and still today it does. Cities keep\u00a0getting older and areas of the city, sometimes they\u2019ve changed due to demographic\u00a0changes. For instance, the suburban sprawl caused a lot of ideal locations of the city to\u00a0deteriorate where originally families lived there. Then the families left and it became a\u00a0rental area that went down, lower and lower and the apartment buildings became\u00a0dilapidated and the values dropped.<\/p>\n
But today\u2019s what happened is a lot of these areas are transforming themselves because\u00a0they\u2019re so close to the downtown core. And I can give you examples: all of the\u00a0southwest, which is St-Henri, Point St-Charles and now its even Griffintown, all of that\u00a0sector for the longest time was not considered very valuable \u00a0\u2013 like places like Point St-Charles were not considered very valuable.\u00a0Today it’s completely re-transforming itself because it\u2019s so close to downtown. Even\u00a0places like the Centre-Sud, which is the gay village, being so close to the downtown,\u00a0has had a new life.<\/p>\n
Hochelaga-Maisonneuve, which most of the time we would have never have touched, we\u00a0started building there in 2001. It has been going through some fantastic growth because of\u00a0its proximity to public transportation, it brings you straight downtown. And its\u00a0affordability of course because it\u2019s a lot less expensive than other sectors.<\/p>\n
Plateau Montreal in the early or mid-90s, oh my gosh, it just took off. Mile End \u2013 I bought a few dilapidated\u00a0buildings and everything around was kind of run down and now has become\u00a0tremendously popular, very expensive.<\/p>\n
Also it is the areas that do become more and more interesting for buyers. First of all, they\u2019re\u00a0highly, highly renter-based. There\u2019s about 70 per cent of them paying rent [in these downtown areas].\u00a0And today, people want to build up their own equity, they want to invest their money and\u00a0what better place than real estate, which I think has proven to be one of the best\u00a0investments, long-term, that people can make even compared to their own skill that they\u00a0might have on the stock market or various investments. Most as times it\u2019s not as good.<\/p>\n
Plus they live in it. If they pay a mortgage, they\u2019re eventually going to pay it off and then\u00a0they own all the equity.<\/p>\n
BBH: That reputation of Montreal being a renter\u2019s city \u2013 is that changing now?<\/strong><\/p>\nSS: It\u2019s starting to change, but we\u2019re probably still more of a renter\u2019s city than any other\u00a0city in Canada, I\u2019m sure. I think we\u2019re at 45 per cent, we used to be at 55 per cent, but\u00a0other cities are at 25 per cent.<\/p>\n
So it\u2019s still very much a rental city, but the rental stock is very old. There\u2019s not much\u00a0that\u2019s been built in the past fifteen in brand new rentals. Of course the rental stock is\u00a0slowly being renovated, but it\u2019s still kind of old rental stock because there\u2019s just not\u00a0enough demand. Plus we have a very strong R\u00e9gie du logement that protects the rents\u00a0and this causes a very strong pressure on keeping rents low and in that respect, you can\u2019t\u00a0build a new building and make viable sense out of it.<\/p>\n
And also, we can\u2019t even transform old buildings into condos where you can in any other\u00a0city. So all this keeps Montreal a renter\u2019s city fairly strong because rent\u2019s a good deal,\u00a0you can\u2019t transform old buildings into condos because you\u2019re not allowed and people\u00a0they just stay renting all the time. And it\u2019s a problem for the society.<\/p>\n
So as we build new\u00a0condos, more condo stock comes into the market because more people become owners. It\u00a0takes time. If they would lift the restrictions on conversions, I think our city would\u00a0quickly change into an owner-occupied city.<\/p>\n
BBH: Montreal\u2019s the second-largest city in Canada, but people don\u2019t associate it with\u00a0condos the way they do Toronto or Vancouver even though there seems to be quite a bit\u00a0of building going on right now. What separates the condo market in Montreal from\u00a0Toronto and Vancouver?<\/strong><\/p>\nSS: It\u2019s because Montreal has never had the high-rise and skyscraper condo buildings built\u00a0like they have in Toronto or Vancouver. In Toronto and Vancouver they build so many\u00a0condo towers that could be 70 floors or even 50 floors. And here in Montreal, we\u00a0don\u2019t have that. Now, finally, we\u2019re starting to see that. In the past, it almost never\u00a0happened. Anytime a skyscraper was going to get built in downtown Montreal, it was an\u00a0office building.\u00a0So there was not much product.<\/p>\n
The Pointe Royal was built 40-years, 30-years ago. That\u2019s\u00a0about the biggest condo tower we have in the downtown. We had a few towers built\u00a0along the way but not as much as Vancouver or Toronto, hardly as much.\u00a0If you don\u2019t have a lot of stock, then you\u2019re not really known for it. Today, we\u2019re going\u00a0to have more and more of these types of condo buildings built so it\u2019s going to start to\u00a0look a bit more like Toronto or Vancouver.<\/p>\n
In the past our condo buildings were low-rise. And the problem we had always had was that\u00a0our population was quite wary of condo projects so they didn\u2019t buy much on pre-sale.\u00a0And if you don\u2019t have a strong presale buying market, you\u2019re not going to build 400-unit\u00a0buildings if you can\u2019t presale them enough. So they just never happened. And they\u2019re all\u00a0low-rise which you can do eight-plexes and sell some units. And the rest were relatively\u00a0low.<\/p>\n
It\u2019s not as familiar a market as it is in Toronto where they open up a sales office and\u00a0they\u2019ll sell half the building in three months. In Montreal, we have a much lower presale\u00a0market. And oftentimes we\u2019re stuck in situations where we have to build a lot more\u00a0equity because the financing doesn\u2019t come in because we don\u2019t get the presales at the\u00a0same pace because our market is smaller.<\/p>\n
We have less condo owners that are\u00a0switching. And the condo buyers, they often can\u2019t afford to buy in one of these towers\u00a0because that\u2019s more for that second buyer that\u2019s built up equity if the condos are $400,000\u00a0and they can only afford a $200,000 condo. Our market is limited.<\/p>\n
Now we\u2019re starting to see more and more of the $400,000 condos coming up into our\u00a0market and it\u2019ll still be a challenge for Montreal to experience that growth they had in\u00a0Toronto or Vancouver in the condo market.<\/p>\n
BBH: How has the market in Montreal changed in the last five years or so?<\/strong><\/p>\nSS: We became more of a concrete structure condo market where in the past we were a\u00a0wood structure and four-storeys and less because of smaller projects. Now, all of the\u00a0builders, we\u2019ve become more and more familiar with building concrete structures \u2013 eight-storey buildings, six-storey, ten-storey, fifteen-storeys and more and more we\u2019re heading\u00a0in that direction \u2013 all the builders.<\/p>\n
It\u2019s many reasons. I see for ourselves, for twenty years, we built so many, well, about\u00a04,000 units \u2013 so many of them were wood structures. So all of these clients that we sold to\u00a0were, for all these years before, you know it was just they were happy to have a condo.\u00a0Like it wasn\u2019t a question of, \u2018Oh will it have an elevator? Do I have an underground\u00a0garage? Do I have a pool?\u2019 It was, \u2018No, no I just want a condo. I don\u2019t want to have to\u00a0pay rent.\u2019 So an eight-plex with a walk-up and parking outside, no pool, no gym \u2013 no\u00a0problem with that. That was selling very well.<\/p>\n
Today, those people who bought the eight-plex units are saying, \u2018I want more. I want to\u00a0park underground, I don\u2019t want to park outside. I want to take an elevator. I want to be on\u00a0a higher floor. I want a pool on the roof.’ They want more.<\/p>\n
And they\u2019re understanding also different qualities of condos. They\u2019re realizing, \u2018Oh, I\u00a0like concrete buildings better because there\u2019s a little bit more soundproofing and the\u00a0quality of the construction will last longer than wood structure buildings. It\u2019s obvious it\u00a0will.<\/p>\n
So now the buyer is becoming more educated in the differences between condo products\u00a0whereas in the past, they were just delighted to actually own a condo. The last five years\u00a0has been a dramatic change from just giving the basic condo product to a variety of\u00a0quality of product.<\/p>\n
BBH: What’s your favourite neighbourhood in Montreal?<\/strong><\/p>\nSS: I love all the neighbourhoods but I guess since I had great success in the early 1996\u00a0in the Plateau Montreal. And I lived there also when I first got married back in 1997. I have a lot of good memories there.<\/p>\n
Thanks for buzzing with us Sam!<\/em><\/p>\n
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