By: Eunice Wong, EY Transaction Real Estate
For its 10th Annual Fireside Chat, ULI Toronto hosted an exclusive evening with Peter Gilgan, Founder and CEO of Mattamy Homes, the largest privately-owned homebuilder in North America. Over 300 attendees joined Mary Federau, EVP & Chief Human Resources Officer at Mattamy Homes, in a moderated conversation that illuminated both Peter and Mattamy’s many decades of success.
Peter was appointed to the Order of Canada in 2013 for his innovative leadership in the residential construction industry and philanthropic efforts in health care, education, and athletics. He was also inducted as a Companion into the Canadian Business Hall of Fame and honoured with a Queen’s Diamond Jubilee Medal. Clearly Peter’s influence reaches far beyond the 90,000 homeowners in Mattamy-built communities.
Coming from the health sciences industry 8 years ago, Mary recognized and appreciated the culture that Mattamy had to offer. Recognizing Peter as a visionary, she wanted be a part of the Mattamy culture, with its focus on commitment, teamwork, and community.
She was not afraid to kick off the evening by asking Peter one of the most popular and contentious questions in the Greater Toronto Area: “What is your prediction for the housing market?” Without hesitation, Peter noted that market fundamentals have had moderate performance, supported by strong job growth, continued immigration, and low supply. While he was close to declaring an end to the housing crisis, Peter was cautious on pricing. Using Vancouver as an example, Peter warned that the GTA ought to educate itself more about affordability. “When you go so high, it hurts when you land,” he said, noting that the younger generation will feel the effects most acutely. As affordability continues to spark conversations every day across the GTA, Peter’s advice to the next generation of homebuyers was to not wait for prices to go down. He noted that there are too many price push pressures, such as limited supply, challenging approvals processes, and demographics that will continue to cause prices to increase.
Elaborating on housing affordability, Peter explained that solutions to the affordability issue start at the provincial level, as it’s the Province that sets the attitude that then filters down to the municipalities. “There is no place as bad as the GTA to get development done,” he stated. Addressing the perception that developers are often viewed as predators, he acknowledged that they are often granted no choice — as development-related approvals have become so difficult to obtain, companies are inclined to make the most out of the situation. Peter called out the Province for its role in hurting the economy with policies that have created the “donkey show” that the process is now.
Citing the residential-approval process in the GTA as one of the reasons why Mattamy diversified into the United States, Peter spoke about the significant opportunities that exist south of the border for Mattamy. With significant growth plans in the US, Peter noted Mattamy’s role as the builder of the next phase of the Celebration master-planned community in Osceloa County, Florida, that represents a potential of 1,310 residential units. Celebration is a master-planned community in Orlando located near the Walt Disney World ® Resort that was originally developed by The Celebration Company, a subsidiary of the Walt Disney Company.
Having weathered a storm of recessions and other challenges, Mary highlighted the involvement of many other external factors that played a role in Mattamy’s success. The pair spoke about the importance of great partnerships, mentors, and customer research. Referencing customers, Peter remarked how cities have transformed and thus, with increased diversity in the GTA, it has become more necessary to understand econometrics. “You have to understand what and who; what they care about; and understand what they don’t care about,” he said. Peter also noted the increasing propensity of newcomers to own homes and the changing needs of the working class. With more emphasis on demographic knowledge, homebuilders can understand what homebuyers are willing to pay a premium on, such as urban living or convenience.
As Mary congratulated Peter on 40 years of operating across Canada and the United States, he reminisced about his first land deal that involved 50 acres in Oakville previously owned by an ex-NFL player that went bankrupt. As Mattamy evolved into a leading homebuilding brand in North America, he was influenced by New Urbanism home design, that was characterized by a more community-based approach. Peter says his ambition was always to build homes that “look right and live well.”
Given Mary’s experience as the Chief Human Resources Officer, she asked Peter what Mattamy looks for in terms of attracting talent to the organization. Peter reflected upon the following desirable attributes:
- Insatiable curiosity
- Brutal determination to get sh*t done and not talk about it forever
- It’s not first in, first out; it’s what you do with your time
- Honesty/owning up to mistakes
- Smart: can connect the dots
- Combination of respecting the traditions but not afraid to bring innovation
Speaking further about innovation, Peter said he anticipates a huge technological transformation in 5 to 6 years. Big data, augmented reality, virtual reality, artificial intelligence – he remarked that all these will eventually become a requirement of a successful homebuilding operation. These technological capabilities will soon permeate every part of the industry and, with that access to data, massive economic value will be created, impacting the value of real estate. Peter also spoke about how Mattamy is continuously learning and adapting to this change. “It is uncharted waters to not own the learning. If you are always outsourcing, someone else owns that knowledge,” he said.
Another takeaway from the evening were what Peter referred to as his own “Peterisms”:
- No two recessions are the same.
- Cash is king. You don’t want to be too stretched.
- Get in front of the problem.
- Rather be too early than too late. (in reference to preparing for a downturn in the market)
- Every problem is an opportunity hiding inside.
- Go slow to go fast.