News

Strategic Group to reorganize its real estate portfolio in response to the Alberta economy

Today, Strategic Group announced a plan to reorganize its real estate portfolio. This decision reflects the prolonged downturn of the Alberta economy and its negative impact on the real estate office market. For the past five years, Calgary has endured a high office vacancy rate which, according to industry forecasting, will not normalize for many years to come.

“Alberta’s severely negative economy has seen our company try to battle the storm for the past five years. Despite my Teams’ innovative approach to an ever-changing landscape, we must immediately deal with the current market conditions and pessimistic outlook for the real estate office market,” said Riaz Mamdani, CEO of Strategic Group. “This is an evolution of our business given the prolonged high office vacancy in Alberta. We are developing a plan for an orderly disposition of specific assets to ensure a sustainable future for Strategic Group.”

Strategic Group’s sizable exposure to the office market is a significant risk for the longevity of the company. For example, since mid-2014, 78 tenants occupying 573,333 square feet did not survive as going concerns or otherwise did not remain in their leased premises, despite being under lease agreements.

In recent years, Strategic Group has diversified its real estate to include a viable multi-family rental portfolio. This business strategy was designed to support a long-term successful future for the company.

Strategic Group’s plan, in part, includes a select portion of its commercial real estate portfolio yesterday having sought and obtained protection under the Companies’ Creditors Arrangement Act (CCAA). Under the terms of the court order, the companies that have sought protection remain in possession and control of their assets, subject to the oversight of the Court and a court-appointed monitor, Hardie & Kelly Inc.  Neil Narfason has been retained as Chief Restructuring Officer. Mr. Narfason has over thirty years of experience advising similar corporate groups and has led numerous successful restructurings.

Strategic Group’s property management, service companies, and development and construction business will not be affected. Strategic Group will continue to manage all of its properties. Projects currently under construction are not impacted.

“We are focused to create a strong new future for Strategic Group and all of our stakeholders,” said Mr. Mamdani. “It is our desire to be a vibrant contributor to our city and province.”

For more information about this reorganization of part of Strategic Group’s real estate assets and the CCAA, please visit www.strategicgroup.ca/iec-audeamus/ 

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Riaz Mamdani: Repurposing office space is part of the solution

The following excerpt is from the Globe and Mail article “Can millennials save Calgary’s vacancy crisis?” 

Millennials are breathing new life into Calgary’s empty office towers, industry insiders say. But it’s not a return to business as usual.

“We’re battling the storm,” says developer Riaz Mamdani, who has successfully repurposed several empty office buildings into hip new rentals and self-storage space targeting those who can’t or no longer wish to own.

“The market is changing,” says Mr. Mamdani, chief executive officer of Strategic Group, one of Canada’s largest privately held real-estate companies. “Millennials are more interested in renting than owning. We’re creating a lot more purpose-built rentals than ever existed before.”

Office conversions are the hallmark of Strategic Group’s business plan. By the end of 2020, the company expects to have reduced its Alberta office space by 18 per cent and increased its residential units by 53 per cent.

It’s a business strategy necessitated out of “desperation,” says Mr. Mamdani, because the company invested in commercial real estate prior to the collapse of the energy industry that devastated Alberta and Calgary, the headquarter capital of the oil sector…

Read the rest at the Globe and Mail.

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Give warmth this holiday season

Strategic Group is once again partnering with the Project Warmth Society of Alberta to ensure no one is without warm cloths this winter. Project Warmth is a registered charitable association that supplies warm clothing, outerwear and blankets to several shelters, individuals and families in need throughout the city of Calgary and surrounding area. Since it began operations, Project Warmth has given over one million articles of warm clothing to people in need!

From December 2 to 27, we are inviting everyone to drop off new and gently-used winter clothing in the lobbies of our participating buildings including the Avenida Food Hall and Fresh Market and Store & Go. If you live in a Strategic Group residential building such as Marda and Cube, you can make a donation without leaving your home!

Some of the items most in need include:

  • Winter jackets
  • Gloves
  • Boots
  • Toques
  • Mittens
  • Blankets
  • Sleeping bags
  • Scarves
  • Snow pants
  • Sweaters
  • Warm clothes for women and children

Participating Strategic Group buildings:

20/20
5/5
926
Centre 1000
Centre Eleven
Deerfoot 17
Deerfoot Court
First Street Plaza
Glenmore Commerce Court
Macleod Place I
Macleod Place II
Mission Centre
Parallel Centre
Paramount
Petro Fina
Petrowest Plaza
Place 9-6
Strategic Centre
Sundance 1000
Sundance Place
Willow Park Centre

Project Warmth at Avenida Food Hall & Fresh Market – December 2 – 27
Visit the Avenida Food Hall & Fresh Market for all your holiday shopping needs and get into the spirit of giving at the same time! Bring a warm clothing donation with you every time you visit and give warmth this holiday season.

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