Mr. Dana, 56, is the president and chief executive of Onex Real Estate Partners, the real estate arm of Onex, one of Canada’s largest private equity firms.
Interview conducted and condensed by
Q. Tell me about your main responsibilities at Onex Real Estate and how they differ from those of Steven Talles, the principal and chief investment officer.
A. Steven is really focused more on individual investments, helping to source, underwrite and structure both debt and equity investments that we undertake. I really get involved in all aspects of real estate, from site selection, investment decisions, asset management, the financial part of it. I’m responsible for the fund-raising and both debt and equity. It’s more of a generalist role.
Q. How is business?
A. It’s good. You know, our firm has gone through quite an evolution.
Q. Onex Real Estate was something you basically created from scratch.
A. We created it. Our business plan at that time and our model was really more like a traditional real estate private equity firm. We were more of a financial allocator, choosing to venture with operating partners in each local market and creating ventures to buy individual assets. Over time, we evolved into more of an operator model, so we build the platform to have in-house construction, development and asset management capabilities. At this point, we’re really doing everything on our own.
Q. How many employees do you have?
A. We started off probably with five people. At the peak, we had 25 people. Right now, we have 17, but the disciplines have changed quite a bit. We went from more of an acquisition-heavy staff to more of a development- and construction-oriented staff.
Q. In addition to developing and acquiring property, I see that Onex Real Estate runs a fund that helps provide capital for its projects.
A. Yeah. The majority of our capital, though, comes from Onex Corporation’s balance sheet. Onex is a public company and has a very strong cash position, and so we’ve really used third-party capital on the equity side very selectively. It’s been predominantly Onex’s capital.
Q. Most of your previous assets had been divested, except for Sky View Parc. What was the reasoning behind that strategy?
A. We saw the timing was good to liquidate a good portion of our portfolio.
We really saw an opportunity to take the lead on that project and develop a shopping center along with 1,250 condominiums. And as a result of that, we’ve decided to focus the majority of our time going forward on new development, both ground-up and on repositionings and renovations of existing assets.
Q. What’s the status of Sky View Parc?
A. Tishman helped us finish the first phase from a construction standpoint. But right now, it’s all us. Our construction managers are on the second phase.
We completed Phase 1, which was 800,000 square feet of retail, a 2,500-space parking garage and 458 condominiums. This past summer, we sold the retail and parking to Blackstone. All the condominiums were sold out in 2013.
We started construction on Phase 2 of the condominiums in 2015, and that’s another 750 units. We’re the developer on that.
Q. How far along are you in the construction?
A. The way the residential works at Sky View is both phases of condominiums sit on top of the retail podium. So we actually had all the foundation work finished as part of Phase 1 for the second-phase condominiums. We’re really building this vertically.
Right now, the superstructure is completed on two of the three buildings, and halfway done on the third. The first tower is completely enclosed. We’re doing all windows — floor-to-ceiling, wall-to-wall windows.
The second tower is about 80, 85 percent enclosed. The third is — we haven’t started to put the glass up yet.
Q. Are people going to like living on top of a big shopping center?
A. In Asia, it’s quite a common thing. It’s really viewed as a tremendous amenity to the residential. And you’re actually seeing more of it now in the U.S.
Q. What’s the average price per square foot for condos?
A. Right now, we’re at about $1,100 a foot for Phase 2. Phase 1, it was $725 a foot.
The first building of Phase 2 is 100 percent sold. The second building is 50 percent sold.
And then the third building, we haven’t offered for sale yet. We expect to start selling units probably in July for that building.
Q. How do the apartments in Phase 2 of the development differ from those of Phase 1?
A. We upgraded the kitchen. We upgraded the appliances. We upgraded the floors. We upgraded the whole architectural design of the building. There’s a 10,000-square-foot amenity building that we’re adding as part of the second phase.The amenity building is really a place for people to congregate. There’s a community kitchen. There’s a big gym.
Q. What’s your overall assessment of Flushing?
A. We did a lot of research before we invested in Flushing, and what we saw was that it was dramatically under-retailed, and there was a real lack of high-end condominium product for buyers. It’s really quite a dynamic economy there. The population growth in Flushing has been incredibly strong. Flushing had positive job growth even during the recession. It really is its own kind of microcosm of New York.
Q. Do you have anything else in the pipeline development-wise?
A. We are looking quite a bit in New York City, including all the boroughs, in northern New Jersey and as far south as Philadelphia. We’re seeing quite a few attractive opportunities in Philadelphia. And then as far north right now as southern Connecticut.