Bob Dhillon can tell you about the time he found a dead body in an apartment suite.
He can tell you about the times he got drunk, slept in his car and got up with the sun to buy foreclosed buildings. He can tell you about the torrent of deal-making he accomplished while he was lying in a hospital bed, stricken with cancer.
But what he’d really like everyone to know is that the reason he did all these things is because he doesn’t look at apartment buildings—or, frankly, any real estate—like you or I do. We see flaking paint. Dented drywall. Stained appliances. We see, well, a dead body.
He sees something else. “I look at it as art,” he says. “I’m an artist at work.”
Dhillon’s chosen medium—buying decades-old buildings by the dozen, giving them a thorough scrubbing, then tossing them back on the market, with a rent increase anywhere from 20% to 100%—is hardly Picasso stuff. But as the relentlessly energetic CEO and largest shareholder of Calgary’s Mainstreet Equity Corp., he may be Canada’s most singular property magnate.
And Dhillon would like us all to acknowledge his accomplishment; he’s a man whose desire for recognition may be even stronger than his desire for profit. It’s for that reason he so happily draws from his quiver of metaphors. Take your pick—depending on the day, he will tell you that he is a miner of gold. A polisher of diamonds. Or...
“I take an ugly building and put a lot of lipstick on it. I’m like a plastic surgeon,” he proclaims. “Give it a little liposuction. Some breast implants. I make this old thing look pretty.”
Bob Dhillon is a lot of things. He is a deal junkie. He is a salsa dancer and a yoga fanatic. He is the owner of a Caribbean island, and sells chunks of it to the likes of Jarome Iginla. Although he’s middle-aged, he wears a dental retainer—something his parents couldn’t manage to get for him when he was a child. He’s now making up for lost time. Dhillon is, in his words, a “street rat” who grew up as a Sikh living in the wrong part of Calgary before learning that he had a particular talent for real estate.
For Dhillon, the prettification process isn’t about how a building looks. It’s what it’s worth. Or, more properly, it’s what he’s made it worth, often by adding a few touches, like laminate floors or, more recently, stainless steel appliances and cabinets he’s buying direct from China, at a deep discount. The beauty, for him, is envisioning a building’s potential where others see only its problems.
“I’ve lost money on gold deals. I’ve lost money on stock deals. I’ve lost money on technology deals. I’ve lost money on everything but real estate,” he says. “I got this intuition. I know it sounds bizarre.”
Dhillon works, by his count, 80 hours a week. He reads books five at a time “because I get bored if I read one all the way through.” He carries two phones, one so he can talk and one so he can bang out e-mails at the same time. He is, at any given moment, negotiating on, inspecting or buying dozens of buildings. Mainstreet started 2011 with a bit less than 7,000 apartment units across Western Canada—primarily in Calgary, Edmonton, Saskatoon and Surrey, B.C.—after buying 510 in the previous three months. By mid-year, Dhillon, who owns about 40% of the company and personally inspects each new purchase, had made conditional offers on another 800 units. Mainstreet will end the year, he predicts, with more than 8,000.
For all its growth—which Dhillon has achieved almost entirely organically—Mainstreet remains a small player in Canada’s publicly traded real estate space. It has never been a market favourite, consistently trading at a share price discount relative to its peers, which have curried favour by spinning out lucrative dividends while Dhillon spurned dividends to focus on expansion. It does not help matters that the company has lost money every year from 2004 to 2010, the amounts ranging from $1.6 million to $6.1 million.
Certainly the market downturn was not kind. After an explosive ride that saw its shares stage a hockey-stick rally in 2006 and 2007 amid major growth, cracks began to show in early 2008. Mainstreet’s stock was kicked in the teeth, falling from a near-$20 high in 2007 to $3.80. Property values tumbled. One of its lead lenders pulled financing. At one point, with nearly half of his properties under renovation, Dhillon had trouble getting enough labour to keep up with the glut of buildings he was buying.