Construction costs just dropped 35%

Hi,

Development tends to move in long stretches of uncertainty, punctuated by moments where the numbers finally become clear.

Over the past few weeks we’ve had a few of those moments across the portfolio, the kind that quietly shape what the next few years could look like.

A meaningful benchmark on Pacific

We recently finalized our Class A budgeting on the Pacific project, and for the first time we’ve been able to bring the construction cost in at approximately $200 per square foot.

For context, that’s roughly 35% lower than our last comparable build.

This didn’t happen by accident. It’s the result of several things coming together:

• Strategic design decisions that simplify construction

• Long-standing trade relationships that reward repeat work

• Economies of scale are in the sweet spot 

Construction costs have been one of the biggest pressure points in development over the past few years. Getting back to this level materially improves how projects pencil and gives us more room to build conservatively.

A decision from the OLT

We also received the decision from our Ontario Land Tribunal hearing for the Hamilton project, and the ruling was in our favor.

That means the project can now proceed to the permitting stage.

Anyone involved in urban infill development knows these processes can be time-consuming and uncertain. Winning the appeal allows us to move the project forward and is another reminder that persistence is often part of the development business.

Separately, I’m currently looking for 2–3 new partners on this Hamilton project. My existing two partners have other ventures they’re pursuing and are looking to exit their position, which creates an opportunity to buy into the project at a discount to today’s value.

If you’d like more information on that opportunity, feel free to reply and I’m happy to share the details.

Thinking at the portfolio level

Alongside advancing individual projects, I’ve been spending more time thinking about the next stage of the business.

Rather than growing project by project indefinitely, I’m exploring portfolio-level partnerships that would allow us to scale our existing model, specifically continuing to build small purpose-built rental buildings in the 6–7 unit range.

Over time, the goal would be to assemble a $100M portfolio built through approximately 25 projects, using the same model we’ve been refining over the past several years.

There are two potential structures we’re considering:

• A small group of limited partners committed to building the portfolio together
• A single strategic capital partner who would participate alongside us as a co-GP

The focus isn’t simply growth for growth’s sake, it’s about building a repeatable platform that can execute consistently while maintaining disciplined underwriting and long-term alignment.

As always, if you’d like to learn more about any of the projects mentioned above or discuss potential partnership opportunities, feel free to reply to this email.

Thanks for reading,
Darren