Ben Myers Makes a Move to Fortress

One of our favourite people to talk to about the condition of the condo market is Ben Myers. During his time at Urbanation, he provided a balanced and factual view of the condo industry by always relying on the stats.

It was announced earlier this week that Ben has made the move to a new position at a new company! He is now the Senior Vice President of Fortress Real Developments. We decided to have a quick conversation with Ben about his new job, Fortress Real Developments, and of course, his view of the real estate scene in Toronto.

NewInHomes (NIH): So, why Fortress? What about the position and company intrigued you?

Ben Myers (BM): Fortress is a pretty impressive company. They are involved in over nine major markets and 34 major projects, so the opportunity to analyze the numbers behind the deals was something that really intrigued. Taking on new challenges and applying my skills to some new markets that I have not worked in yet was something that I was excited by. Fortress is a very fast growing company and the opportunity here was a very exciting one.

In meeting with the CEO Jawad Rathore and COO Vince Petrozza, I grew to love their vision for the long term expansion of the company. Their model of syndicate mortgage is something that is fairly new that they have cornered the market on. The opportunity to come in at the top was fairly exciting, and the fact that the guys are huge sports fans is definitely a plus. You want to work with people that you have a lot in common with, which was a big draw as well.

NIH: Can you tell us a little bit about Fortress?

BM: Fortress’ main role is to lend within the real estate market. They lend to condominium projects, they lend to low-rise projects, or even retail/commercial projects - anything within the real estate industry. Basically, they allow any individual to invest in a real estate development. I can take $25,000 of my RRSP money and decide to put it into a project. From there, they pool all the money together and each person will own a piece of the mortgage on the land. Then the money is given to the developers to use however they see fit, be it for marketing, equity, site servicing, or any combination of those and many other things. It’s really interesting as opposed to other companies who do similar funding, but do so with a large fund that is invested in five to six different projects. This company allows you to control the development that you invest in.

Everyone knows I track the new condo market in the downtown core, and there were 28,000 new condo sales in 2011. A significant amount of those units were bought by investors. People believe in the condo market, but now instead of just putting your $65,000 or $75,000 down payment down, then buying the $300,000 or $400,000 condominium plus transaction costs and lawyers fees and managing the property, you can now get in for a smaller portion at a three year term and walk away. It gives people a different avenue to invest in the real estate market.

NIH: So tell us about your role. What’s the day-to-day life of Ben Myers going to be like?

BM: When I was at Urbanation I would do a lot of development studies. When developers had a property they would come to us and we would recommend pricing and suite mix, amenities and target markets. I plan on bringing those skills to the work that I will do here and use those tools to assess deals. We may say 'no, that doesn't work based off of the numbers.’ For the deals that we have accepted, I'll do similar reports which will be included in our investor packages, in addition to reports that will be used internally with our developer partners.

I'll also be putting out internal and external memos on the health of the market, opinions on the real estate industry, and speaking at investor events. We all know that there is a lot of misinformation out there, so I always want the public to know that there is another side of the story. I did that at Urbanation and I want to do that here.

It will be an interesting change. I wanted to be involved in the entire process; I wanted to be a partner in a development and to be able to say, 'I helped bring this to market.’ People always appreciated what I did at Urbanation, but it was time for another level of recognition for what I do and the skills that I bring to the table. I hope to not only improve some of the product that is being offered out there, but also better analyze it before it hits the market. I think it’s going to be a challenge...plus they [Fortress] wouldn't take no for an answer.

NIH: What are your memories of Urbanation?

BM: It was a great period of time. I got to learn about the process and learn how things work, like how to format information and use it for our clients’ best interests. I wanted to combat a lot of the misinformation out there, the misconceptions that were out there, and show what was really happening in the market. I was lucky enough to meet hundreds of people and I will miss the presentations and going back and forth with people who have been in the business for 30 or 25 years. I'll still be interacting with most of the same people though, just in a different role. I'm excited to see where this takes me.

NIH: It wouldn't be a Ben Myers interview without talking about the health of the marketplace. What do you foresee for 2013?

BM: I have said it before, I think the condo boom is over. I don't think we will have 25k or 30k sales years anytime soon, but I think that the market is fine. We didn't have 15, 20, or 25 percent year over year increases, so we have never set ourselves up for any major declines. I think we will have steady growth over the next few years, and the rental market is extremely strong right now. Outside of that, I've learned that the market is self correcting. We have only had four or five new project launches in 2013, so developers are obviously pulling back, which should allow for our unsold inventory to fall to a more 'normal' number. Funny enough, in terms of percentage of unsold units on the market, we are still at where we have been historically - it’s just that the market has grown. I don’t think it’s grown at a pace that is unsustainable based on the amount of people we continue to see moving into the city, as well as the health of our economy. I have always been willing to put my money where my mouth is, and now I've done that by working on the development side. When it comes to the market, my number one interest is to be correct - that’s my concern. If people don't agree with me, there is certainly 15 or 16 years worth of evidence to support my findings.

We would like to thank Ben for being a friend to the Toronto Star's NewInHomes.com, and we wish him luck (not that he needs it) in his transition! We think it’s safe to say that even in his new role, Ben will still be a trusted source of information for the Toronto real estate industry.