Updated June 26, 2017

The following is a throwback to ULI Toronto’s Summer 2012 interview with ULI Member, Mike Czestochowski.

As a pre-eminent figure in the GTA land brokerage industry with over 25 years of experience in land transactions, Mike Czestochowski was ULI’s natural choice to offer insight into the current real estate environment – which continues to show exceptional strength. A member of ULI since 2009, Mike has been one of the top 10 brokers in the Toronto North Office throughout his accomplished career. Currently, he is an Executive Vice President of CBRE and the broker of record to many of Canada’s significant land transactions. He has a degree in Economics and enjoys serving as Vice President on the board of directors of The Markham Aquatic Club, when he is of course not reshaping the GTA’s landscape.

CBRE is the largest brokerage in Canada and one of the leading international real estate brokerages; could you please explain your role within the company?

As a Senior Vice President [now an Executive Vice President] within the organization, I provide overall transaction team leadership and strategy to my team, the Land Services Group, and execute on a wide variety of land and investment mandates. Currently our team is comprised of varied professionals including planners, multimedia specialists and sales representatives that combined offer an industry leading brokerage service that maximizes value.

As a professional who has specialized and excelled in land brokerage for over a quarter century, what has continued to drive you in this industry?

The real estate brokerage industry provides a variety of work that is seldom duplicated in other careers. The vast majority of brokers specialize in investment properties that have already been improved with buildings and are generating income [i.e. office, retail, industrial and multi-res assets]. Land possesses unrealized potential and it is exciting to be part of the beginning stages in the development process. Determining the highest-and-best-use of an unimproved land parcel lends itself to a creative and entrepreneurial process. Working with vendors to realize the full potential of their asset is a rewarding experience. Playing a part in reshaping the city you live in is truly special.

As a broker dealing with large volumes of investment land, you witness firsthand changing market conditions and are able to gauge the market’s appetite for land product. What are some of the trends you see developing in the not too distant future?

A significant amount of office and retail properties in Canada’s major cities continue to age beyond their intended life. As a result, asset managers have continued to invest in life cycle technologies that have extended the longevity of these assets. At some point the cost of these capital improvements, especially for class “C” buildings, will be greater than the value of the building. In these cases, we will start to see these buildings being demolished in favour of new structures. The residual land value will be greater than the building itself.

Recently, downtown Toronto has witnessed some landmark land deals that have exceeded $100 psf of buildable. Considering $80 psf of buildable has been the industry norm for years, is $100 psf sustainable?

Toronto has been ushering in a new era of population growth with over 100,000 new people expected to migrate to the GTA every year. This will put tremendous pressure on the demand side of the demand-supply equation as this influx of people seeks out places to live. Recent demographic trends suggest this generation continues to want to live in downtown cores which obviously puts a premium on land located in these highly desirable areas. In addition, people are getting married later in life, women are staying in the workforce longer, and foreign investors continue to play an increasing role. This coupled with sustained population growth produces a synergistic effect that ultimately increases land value to the levels we are seeing.

GTA West has developed much faster than GTA East. What are your thoughts on West vs. East divide?

GTA West has the largest industrial market in Canada and has largely been driven by the closer proximity to the U.S. border and of course [the] Pearson International Airport. GTA East has definitely trailed the West in terms of development with a much smaller industrial market. However there has been recent momentum on the long-debated Pickering International Airport. When this development eventually occurs we could see a significant boost in industrial development in that region.

As an experienced professional in the real estate community has there been anything in particular that has changed in the industry?

Young people. When I first started, most people in the real estate industry were starting a second career. Now young people are entering the industry directly from school, from university programs that directly relate to real estate such as the real estate program at the University of Guelph. These bright young people are contributing to an increasing professional environment in the real estate community.

Young people is an interesting insight. ULI has a strong cohort of young professionals in a diversified range of real estate careers. From your past experience, what advice would you offer them?

Put the client first before yourself.

Braiden Goodchild
PricewaterhouseCoopers LLP
Communications Committee