“I want to address the stigma around renting”: Meet mega-developer Adrian Rocca

Your company, Fitzrovia, just launched a $1-billion fund to build new rentals, which includes tearing down a 14-­storey office tower at Avenue and St. Clair and replacing it with a 49-­storey apartment building. Did you consider converting it instead? No, it would have been too expensive and complicated. Most offices don’t lend themselves to residential conversions—they’re large, with a central core, which results in either bowling-alley-style suites with very little natural light or oversized units, which drive down the rent per square foot that developers can charge. That doesn’t apply to all offices, but it does to many in the city.

As a real estate man, you must be disheartened to see all that stock sitting cold. Is there business potential there? Somewhat. The trophy offices are downtown, and there’s still lots of demand for them. If you look at the next tier of buildings, like the one on St. Clair, their owners now want to redevelop them. I’d say the pendulum is shifting back to in-office work, but maybe by only half. So some of those empty offices will come back to life, just not to the same degree as pre-Covid.

And what about the Fitzrovia office these days? We’re back five days a week, but that’s because a huge part of my workforce can’t do their jobs remotely, like the construction team. I think it’s fair that everyone plays by the same rules.

Condos are more profitable for investors and more popular among consumers, yet you’ve pegged Fitzrovia as a developer of rentals. Why? I’m in love with the sector: buying a piece of dirt, putting it all together and then seeing people live there. Most Canadian developers focus on condos. They do it to make more money but also because there’s a stigma around renting. So I want to address that problem head on. Today, more people are renting, especially young people, and Toronto is in the middle of a housing shortage. Fitzrovia’s business model plays into all of that.

But home ownership is so baked into the Canadian dream. Are we ready to let that go? People who can afford it can still buy, but there are many ways to live in a city. I rented on Queens Quay after university, and it was great. Once I started a family, we rented for years before buying our home.

So you did end up buying. The majority of Torontonians will never be able to do that. Are you saying that renting is, fiscally, a strong alternative for these people? A two-­bedroom in one of your complexes can go for $4,600 a month. Right now, renting is more affordable. You don’t have to deal with down payments, debt service, interest rates, repairs, property taxes and insurance—what if your roof goes? When you factor in the full spectrum of home ownership burdens, renting is about 20 per cent cheaper than buying.

Who, exactly, are you courting as residents? A big segment of the population. Rentals are great for young families, for example, since condo developers avoid the higher price tags associated with larger units. We think about our customers’ long-term needs, so more two- and three-bedroom units. We also have first-rate amenities like pre-school and kindergarten programs, virtual health care, shared workspaces, coffee shops, and bars.

It seems like the strategy is to present rentals through an aspirational lens and, in turn, destigmatize them. Fair? That’s a big part of it. First-rate amenities were almost never built into Toronto’s classic apartment towers, so we’re changing that—rooftop pools, Raptors-branded courts, ski simulators, bowling alleys, pet spas. Not every idea lands with residents, but we’re always trying new things.

Which idea didn’t go over well? We did a speed-dating event on Valentine’s Day at our Waverley apartments. I thought it would be really popular, but I think only four people showed up. So not a hit.

Does a building with a doggy spa help address the affordability crisis? The problem of affordability stems from a lack of supply, so, yes, adding new units to the city does make a difference. But we also need to be clear what we mean by “affordable” here. There are more than a million Torontonians with household incomes between $70,000 and $200,000, and most of them can’t afford ownership. We provide another option.

Do any of your employees live in your apartments? Yes, a number of our employees are residents.

With all those first-rate amenities, they must be dragging their feet to the Fitzrovia office, no? That’s a champagne problem at this point.

This interview has been edited for length and clarity.