Recently, Strategic Group published its latest Annual Review. It began with a letter from our CEO, Riaz Mamdani. Here is that letter in full:
Focus. If I could use only one word to describe 2018 at Strategic Group, it would be focus.
We are a goalsetting organization, and our approach to team-wide, focused goalsetting sets us apart from our competitors. We are committed to understanding the market, our own strengths and opportunities, and making deliberate decisions about how we can be successful in an uncertain world. With deliberate goalsetting, our creative and unconventional approach, and a focus on real estate fundamentals, we continue to strengthen and grow our company. We are constantly optimizing our expanding portfolio of more than 7.5 million square feet, and a process of zero-based budgeting have enabled us to significantly decrease our overhead costs. While 2018 continued to bring uncertainty for many, we experienced significant gains and successes through our creative and nimble approach to our business and the real estate industry.
In every part of our real estate portfolio, we are creating spaces where people can fully engage and do what they do best. Whether a successful office-based business, a vibrant retail shop, or a rental home where residents can live their best life, our real estate is more than just a great space – it creates opportunity, satisfaction, and tremendous value for our tenants and residents. There is significant accretive opportunity in building our mixed-use residential portfolio. Canadians are increasingly choosing to live in multi-family rental homes rather than purchase their own home, and there is growing market demand and limited supply for quality rental residences in Canada. This gap between supply and demand is most pronounced in Alberta where much of our growth is focused.
Through 2019 and beyond, much of the growth in our company will be our multi-family residential rental business, an approach that is directly linked to our strategic focus on sustainability and recurring revenue. In today’s economy, we know recovery of the office market is at least a decade in the making, and we are adapting and growing in creative, unconventional, and prudent ways. Strategic Group’s business plan is to aggressively grow our multi-family portfolio and decrease our exposure to the Alberta office market. This is happening through a combination of new residential development, repurposing of our office buildings to residential, and select divestitures. By the end of 2020, we will have reduced our Alberta office space by at least 18 per cent and increased our residential units by over 53 per cent.
With our goal to continuously grow as a company, we are excited to see what lays ahead in the future, while also acknowledging our past accomplishments. Some of the key highlights of our success over 2018 include:
- Constructing Marda, the first purpose-built, multi-family rental building in Calgary’s vibrant inner-city community of Marda Loop.
- Breaking ground on our first purpose-built, 38-storey residential tower in Calgary: UPTEN
- Advancing a program of thoughtful office space repurposing that is saving money, reducing our environmental impact, and keeping our buildings full.
- Reducing our overhead costs by more than 20 per cent through zero-based budgeting
- Investing 20 million dollars to renovate and re-tenant the iconic CN Tower in Edmonton.
- Increasing our office occupancy in both Calgary and Edmonton.
Today, Strategic Group currently owns more than 3,000 multi-family residences in Canada, and we are actively constructing nearly 1,000 new residences in Calgary and Edmonton. We have over 2,500 multi-family residences in the planning stage. Our active construction includes building new multi-family buildings like our flagship 38-storey tower in Calgary’s downtown and our recently completed six-storey project in Calgary’s Marda Loop. It also includes a focus on repurposing obsolete office space into new multi-family rental such as the high-profile Barron Building project in downtown Calgary and a handful of other projects in Calgary and Edmonton that you can read more about in the Annual Review 2018 report. As a fully integrated company that owns, manages, leases, develops and redevelops our portfolio, combined with the advantage of our creative and unconventional approach, we are adaptable to the current challenging market in a way that yields results no other company can obtain.
Lastly, we are proud to say that in our 2018 all-employee survey, we found that our Team Members are incredibly proud to work at Strategic Group. Through a strong sense of ownership and accountability, we are all motivated to do great, ambitious things for ourselves and our stakeholders. Together, we are confident, excited, and very much focused on the future of Strategic Group.