For over 40 years, TAS, a Toronto-based developer and asset manager, has sought to achieve strong returns while creating long-lasting community benefits.
Through this approach, the family-run company has amassed a portfolio of 21 commercial and mixed-residential buildings in Toronto and throughout the GTA. Last month, the firm bought a distressed industrial warehouse at 1500 Birchmount Road in Scarborough for $60.5m, or $209/sq ft, via a court-ordered sale.
Green Street News spoke with TAS president and CEO Mazyar “Maz” Mortazavi to get a sense of how the company balances its responsibilities to investors with its mission of driving urban renewal and community improvements.
What do you look for as far as value when it comes to property investment?
What differentiates TAS is the coupling of profit and purpose. We have found that through this approach you create compounded return. It’s not something that is driven by a marketing agenda; it’s the ethos of how we operate as an organization.
We generate value by identifying a market gap and working with the local characteristics of a neighbourhood to identify where we can connect into those tendencies, while also adding value to drive the long-term resiliency of the asset.
We’re looking at how we can leverage long-term value for the community and the neighbourhood while generating a strong financial return
Are you focusing on properties with some historical importance in the community?
That’s definitely part of it. From a macro standpoint, we look at the shifts in the supply-demand characteristics of a marketplace. We’re very pragmatic when it comes to the business fundamentals. We are entrepreneurial in identifying opportunity, but institutional in the rigor under which we operate. It’s this coupling which allows us to allocate capital at a larger scale than individual entrepreneurs.
“We are entrepreneurial in identifying opportunity, but institutional in the rigor under which we operate”
Very often we look at a roll-up strategy, where we’re taking assets that are smaller and more complex to manage, and we have the scale of capital to continue to add [value] and create a platform approach. That’s a unique differentiator in how we operate.
What markets are you currently looking at?
Historically, it’s been the GTA. We are looking now nationally at opportunities. We’ve been looking at Montréal, Calgary, Vancouver.
But the GTA remains our core focus. When people look at Canada from the outside, Toronto continues to be the main focus area. But we have never limited ourselves.
In the case of industrial property, how do you respond to the softening of market demand as more new supply comes online?
There’s been a proliferation of logistics-based industrial spaces – a really big growth coming out of Covid. Because there was such a significant shortage [of logistics space], that resulted in two things: Firstly, the building typology became very generic, in terms of big-bay logistics; and secondly, a lot of that new development was through replacing older assets.
What was missing was any attention to small-medium enterprises, which are really the fabric of the Canadian economy. So, we have honed in on small-bay industrial, local or last-mile logistics and SME.
You see a lot of those smaller industrial properties in areas like Scarborough, older multi-tenanted buildings perhaps requiring a bit of renovation work.
That is absolutely a great descriptor. This ties in to how we bridge profit and purpose. We are looking at the business fundamentals that drive the profit, but through a purpose lens. We’re going into neighbourhoods that tend to be significant immigrant receptors and where there’s diversity in terms of socioeconomics.
“We look at the catalytic impact we can have”
It also then helps to feed into our impact strategy around turning these assets into community hubs where we work with social enterprises to allocate affordable spaces to them. For example, at our property at 772 Warden Avenue, we worked very closely with Feed Scarborough to bring in a food bank. We look at the catalytic impact we can have.
I look at what we’re developing at the Yards, [a mixed residential and commercial project] at 2 Tecumseth Street. It’s the repurposing of an old abattoir in downtown Toronto into a vibrant mixed-use community across a 5-acre pedestrian zone. That’s exemplary of how we think about these old nodes, bringing them to new life with a lens to community and incorporating nature. I think that’s really indicative of the work we’re doing, and this work is informed by our Impact Framework that we report on annually, as well as the work we have done through our Reconciliation Action Plan.
How do social benefits translate to an investor solely interested in generating healthy returns?
Our uniqueness is that we’re driving social, environmental and cultural inputs alongside delivering market-based returns. It’s sort of a win-win. We’re saying that by taking a different approach, it can drive additional outcomes.
Are you seeing more investors returning to the market as interest rates continue to lower?
Yes, I would say we’ve seen more activity in the last three months than we’ve seen in the last 24 months. It’s not where it was in 2021. I think there’s definitely a shift, but we actually think that’s very healthy. The froth is coming off.
A frothy market to us is always a high risk, whereas a steady market provides great long-term opportunity.
