Being successful in the commercial development business clearly takes more than just a lot of capital. It takes patience; it takes an understanding of the trends in the commercial real estate market; and it takes a keen understanding of the growth patterns of the given urban area one is working in, this latter skill being perhaps more overlooked than the others.
Take Calgary for example. Calgary is a city located in Alberta, Canada. With a population of just over 1 million, it’s like most mid-size cities – it has an outlying suburban area, it has a downtown corridor area populated with large and medium high rises, and it has a beltline that surrounds downtown.
Also similar to many cities in Canada, Calgary has many opportunities for commercial real estate development. But, where in this urban area these opportunities are and what kind of opportunity for development they offer – that’s the million dollar question, and indeed the answers to these questions is what separates the successful commercial real estate developers from the not-so successful ones.
Frank Lonardelli and his commercial real estate development company, Arlington Street Investments, work and invest in the commercial development industry in Calgary, and since Arlington Street’s founding in 2000, Frank Lonardelli and his firm have become particularly well-known for their ability to not only select wise real estate investments, but also for their timing in when to invest and redevelop and when to be less exposed in the market.
Being ahead of the curve is how Frank Lonardelli describes his company’s approach and philosophy when it comes to selecting properties to invest in. As Mr. Lonardelli elaborates, “My team and I at Arlington Street are always striving to look ahead and to look at where the city is going. And that’s the area we want to invest in. Our strategy is to always be ahead of the curve and to invest and wait for the market to catch up to us, which is when we start our redevelopment program.”
It’s an ingenious investment strategy, but at the same time, it takes an enormous, not to mention a very confident, understanding of how the urban area will grow and in which direction as well as a tremendous amount of focus, discipline and patience. That’s something that Frank Lonardelli understands and agrees with. “Yes, that’s true. As a developer, you definitely need to have an understanding of the growth patterns of the city. And, also, you need to have an understanding of what kind of space will be desirable once the market catches up with you. Five years out from now, will a certain area of the city want high-end office space? Will more mid-tier space be what’s desirable? Make no doubt about it – these are questions that our team at Arlington Street ask way before selecting any sort of property to invest in.”
And it’s clear from one of Arlington Street’s more high-profile investment projects, namely its redevelopment project at 718 8 Avenue SW, that the company’s investment selection process is working out very well. “I’m confident and happy with all our property selections,” Frank Lonardelli mentions. “But, our 8th Avenue property is a real stand-out case. We were fortunate enough to get this property, and the fact that it lies directly in line with Calgary’s downtown growth aligns perfectly with our investment strategy and creates an exceptional investment. We waited and tracked this property for 5 years before we were able to secure it at the price point we purchased this property at. The energy, time and investment that we put in redeveloping the property has already begun to see returns.”
Mr. Lonardelli then makes a final comment, “As a company, we’re continually looking for property assets that provide strong cash flow and excellent development potential, and our understanding of Calgary and its growth has allowed us to do just that.”
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Envision what ought to be there. Not what is. Then be courageous enough to create it.