When condo developers Tariq and Saud Adi were kids in Saudi Arabia, their physician father became involved in real estate and would take his sons out driving with him to look at properties. So the Adi brothers got a feel and vision for a property’s potential even before the family moved to Montreal in the late 1980s and then later to Burlington, Ont.
While Saud studied engineering at McMaster University and construction engineering at George Brown College, Tariq followed a different career path, working as an audio engineer and producer. Once he decided the music industry wasn’t for him – he also studied biology at Brock University and finance at Sheridan College – he teamed up with Saud looking for “something bigger and better out there.”
The brothers launched the Adi Development Group in 2007. Tariq, 34, is CEO and Saud, 33, is COO – a good balance according to Tariq who describes Saud as “the left brain analytical guy” while “I’m the more creative right brain”.
The early days were tough, but the brothers spotted a gap in Burlington’s condo market and successfully filled it with something different that appealed to a younger urban client. From there, the company has been growing an impressive track record. Adi Development Group’s Mod’rn project – a contemporary condo designed as the kind of hip residence Tariq and Saud would want to live in themselves – was 95 per cent sold on its opening weekend. Their current condo and townhouse project, LINK, recently won an Ontario Home Builders’ Association award for best suite design, and LINK2, its second phase of condos and lofts, has launched ahead of schedule.
With nine full-time staff, the Burlington-based company estimates annual revenue will be $100-million for this year.
How did you begin in the development market?
Tariq: At first it was let’s buy up as many income producing properties as we can. We were living in Burlington but there weren’t many income producing properties there – it’s predominately family-oriented – so we looked mainly in Hamilton.We were 23 and 24 at that time so we weren’t buying a $60-million building at that age. We started small.
We bought a couple of properties but it was tough going with rentals. We didn’t want to be slumlords. So we questioned if this was what we wanted to do or if we wanted to go into development. Then a property that was a former gas station down the road from our house came up for sale. We literally put all the money we had made from housing – $250,000 – down as a deposit on that property. It was a real gamble because it was non-refundable so we were taking a huge risk. We went through some tough times with that property because we were going to all the lenders and everybody’s asking, “How old are you guys? And what have you done before?”
Did you know what you wanted to do with it?
Tariq: We were proposing a condominium for the property. We knew 100 per cent that was what we wanted to do. Did we know what we were doing? No. Those are two different things. We had the drive and motivation but we didn’t know how things worked. You go on blind faith. When we took the plunge, I remember telling Saud that we’re going down a pitch black staircase and all we can see is the first step. Let’s have faith that when we take the next step, there’s going to be another and another that will take us to where we need to go.
All the lenders we went to – the banks and secondary lenders in the industry – told us we were crazy and too young. It was, “Go figure it out and come back if you can get it done, and then we can talk.”
We didn’t have jobs at this point. Whatever we saved up carried us through these times. We used to get up at six in the morning and drive around looking at every property and development that was for sale, from Hamilton to downtown Toronto – in Yorkville and King West. The condo boom was starting and some of those boutique developers were coming on the scene. We founded the company in 2007.
Saud: We looked at model suites – who the architect was and the designer, how the sales people interacted, who was winning the builder awards. We were just trying to get an understanding.
Tariq: That groundwork paid off in dividends. Part of that process was dealing with the local agents and brokers – going to have a coffee with them and picking their brain. The Imperial Oil site in Burlington came through one of the brokers that I had been courting.
What about family support?
Tariq: Dad was skeptical. He said, let me see if you can make it work. He invests with us today, but not at that time. We had to go out and find our own investors and private individuals through brokers and networks to put up the cash alongside our own.
Who came through with your financing?
Tariq: When we couldn’t find a partner, we kept pushing and finally found an investor that would put up our share of the capital needed. And we also found a development partner and got the deal done. Ultimately, we ended up working with Meridian. They’re a credit union and a little bit more lenient than the banks when it comes to underwriting deals. We still have a great relationship with them today.
What was the biggest challenge in getting it built?
Tariq: Everything that could go wrong with the development went wrong. We got turned down at council. We had to resubmit. It was an election year. We lost a year. The market kind of softened a little at the time. The Ministry of Environment standards kept changing and getting more stringent. We had to do further environmental testing and buy lands from the city. But it was such a hands on process that we learned so much from that development.
Saud: It ended up as a townhouse project. We first looked at it as a condo but a townhouse complex made more sense because it was in a low rise area. There weren’t any challenges from a building perspective. It was more having to deal with the city about zoning. Originally, we proposed 33 units but ultimately got approved for 23.
Tariq: Luckily for us when we came to sell the property, we just put up a six meter square sign and about 500 people registered. We just blew the units out. We didn’t even have to put up a sales center. We sold all 23 units in a day. It was a huge success.
Why do you think your projects have been so successful?
Tariq: We were at the right place at the right time. What makes for a great condo market is when the cost of a single family home starts to go crazy and people are looking for alternative options. That’s where we came in.
Then from all the touring we did, we got a taste for that modern flair – those clean lines and Toronto style buildings. We designed it to appeal to the younger demographic and they did buy. Burlingtonians are die hard. If they went to high school here, chances are they’ll come back and live here forever. What was surprising was that the senior population, 65 to 80, bought as well. They came in saying they loved the modern design and our finishes.
Who’s the boss?
Tariq: We’re generally on the same page. When we’re not, it’s a screaming match. Once we make a decision, we’re together on it 100 per cent. It’s always a joint decision. Our mother always taught us to get along and not fight. We do fight but make up at the end.
What kind of hours do you work?
Tariq: I get up at 5 a.m. I found if I didn’t, I wasn’t getting everything done. I keep pushing the guys in the office to try it but they say I’m crazy. I have a saying: 7 a.m. is when normal people wake up, 6 a.m. is when the millionaires wake up and 5 a.m. is when the billionaires wake up. I want everybody in the 5 a.m. club. First thing, I go right to the gym for a workout, grab a coffee on the way home, read the news and get caught up on my e-mails. I’m sending e-mails by six o’clock so I’m already ahead of my day.
Saud: I’m up by 6 a.m. to hit the gym. We just had a baby so I come back at seven to play with my son for 30 or 40 minutes, jump in the shower and get to the office by 8:45 a.m. I usually don’t leave until 6:30 or 7 p.m. It had got to the point where I only saw my wife for two hours a day but now that we have a kid, I try to come home earlier and work from home after dinner. It is a challenge but this is our life – it’s what we do. We’re very fortunate to have understanding families. I’m very happy about that.
Tariq: Work consumes us but not in a negative way. We truly love what we do. We love everything about it.
What do you love most?
Tariq: It’s the rush of the deal. I’m always chasing the shiny new deal. Once I make the acquisition, it’s not exciting anymore. I want more.
Saud: For me, it’s just building something unbelievable. You take a raw piece of land and put homes on it, and people live in them. I tell my construction and trade guys, “These are people’s homes and we take pride in building them.” I want a product that’s superior. That’s what drives me.
Tariq: We love thinking big. It’s not about the money. It’s about leaving something behind. We could put up buildings very cheaply that look awful but that’s not what we want. We want to put up buildings that 30 years from now, people drive by and say, “Wow, that building looks great.”Report Typo/Error
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