The origins of Calgary-based Ronmor Developers Inc. dates back more than 30 years but it’s actually closer to a half century considering when the two founding families began acquiring raw agricultural land and existing industrial buildings for cash flow to put money into real estate assets. Fast forward to today and Ronmor is one of the largest and most successful mixed-use developers and property managers in western Canada with designs on expanding its presence to even greater levels in the coming years.

With possession of more than 6,000 acres of raw land in the Calgary region it makes Ronmor the owner of one of the largest private land holdings in the province of Alberta. The company is a builder of major retail districts as well as inclusive residential neighbourhoods. Additionally, it retains ownership of those retail districts and serves as property managers. In recent years these combined efforts have led to Ronmor becoming a noted industry leader in mixed-use developments.

The Canadian Business Journal recently spoke with Doug Porozni, the President of Ronmor Developers Inc., about the company’s successes and ideas for the future. When Porozni came on board in 1998 the strategy was to move into the development side and build retail shopping centres, and that is what he has been focused on since his arrival 17 years ago.

“We’ve had a smattering of industrial and office but predominantly it’s been retail anchored by grocery or pharmacy or mixed-use, which lately has been more of our focus,” he reveals.

The company’s principals acquired farmland in the 1960s and 1970s and the city grew to incorporate those lands, and from there popped up commercial sites. Besides acquiring alternate properties that Ronmor didn’t already own, there was also a natural progression of raw land coming on stream that had tremendous commercial potential.

“In 1970-71 the company acquired the land that Silverado sits on. We ended up finishing that project a couple of years ago. The residential was completed in the first phase and we built a 12-acre commercial site just as the neighbourhood was being completed,” Porozni says.

Silverado Marketplace (the commercial site) was built with an equestrian theme in the south part of Calgary in the new neighbourhood. It covers more than 125,000 square feet and is anchored by Sobeys and Shoppers Drug Mart and is linked by nicely landscaped pedestrian walkways.

An interesting aspect of Ronmor is that the company not only designs and builds large retail districts but also stays on to manage the properties.

“Ronmor has always been asset managers; the development side of it began when I came in. The new part was acquiring the land, building on it, and then managing as the company always had,” Porozni says.

Calgary has had such rapid growth over the past decade Porozni feels they have had good fortune on their side in that regard. Oftentimes small to medium-sized companies have to sell assets to generate enough equity in order to get the ball rolling on a follow-up venture. It is somewhat rare for a company the size of Ronmor to maintain everything from start to finish, but as Porozni points out, they have been rationalizing their portfolio in order to maximize return on their property investments. It’s been an astute business plan that has yielded excellent results.

“We’ve been selling some of our older industrial sites a few at a time just because it doesn’t fit our current model which is mixed-use and retail,” Porozni notes. “Outside of that we really haven’t sold much except one major mixed-use project that we developed and had two other partners. Both partners had a desire to move on. It’s difficult to sell one-third of something; it’s much easier to sell it as a whole. When you buy well-located property you can’t replace it. In Calgary’s environment we’ve had so much inflation and increasing land prices it’s very hard to replace what you’ve built.”

Smart Growth Principles are being applied to the development of Ronmor’s projects wherever and whenever possible, which requires sensitive, sustainable design. As an example, if the company is able to reduce the amount of irrigation on a large suburban site or switch to LED lighting in parking lots, they will do so, even although the real beneficiary is the tenant and not the developer. Ronmor has also been installing car-charging stations since the completion of Silverado.

“We’ve been putting in at least two for every project we do now on our own just because we think it’s smart to do it,” Porozni says. “Additionally, we’ve been going with white roofs and other environmentally-sensitive ideas to cut back on the energy costs. If you can advertise that your property costs are lower you should theoretically be able to charge more rent to get the gross number the same but it doesn’t always work that way. Tenants sometimes don’t look at the gross number and just look at the base rent number and that’s the one you’re competing on.”

Although Ronmor does not attempt to be LEED certified, the company does ‘shadow’ it to some extent. One of the things Porozni is very proud about has been the repurposing of old industrial buildings into office space. They manage to keep the shell and structure and so far have completed three of these projects, one of which was the old Massey Ferguson Calgary warehouse built in 1912. It now encompasses beautiful office space with a newer companion building next door. Porozni says it’s incredible what you can do with some creative thinking and ingenuity.

“The structure is there and we’re recycling a lot. We installed a new roof and windows. You’re saving a fair amount of construction material and not putting it in a landfill. But you have to be careful because a renovation or reconstruction like that is very difficult to budget, but it has worked out for us and we’re happy to do it. We listen to what our clients want. We always put ourselves in the shoes of the end users and what is best for them,” Porozni says.

Calgary is home base to the company’s head office but it now has development and ownership interests in nine other jurisdictions spanning from Saskatchewan to British Columbia.

“We have a project in Kelowna, B.C. which will involve repurposing a 70-year old downtown building,” Porozni says. “It’s the old Paramount Theatre and we’ve also built a new project in Whistler, B.C. which is mixed-use commercial and residential with a separate gas bar across the street and that’s where the green roof comes in.”

In total there are 65 units of apartments and a Loblaws city market anchoring the building on the base with underground and deck parking. It is a complex site and has been one of Ronmor’s larger endeavours at upwards of $40 million and is scheduled for completion in the spring of 2016. Rainbow Plaza is a 21,500-square foot office and retail centre will include a gas bar, Pikolo Espresso Bar and a liquor store as main tenants. As of now only about 3,000 square feet of main floor retail space remains available.

Back in Calgary, Porozni points to two cornerstone mixed-use projects currently under construction at two different sites in Marda Loop, where the first of three projects was a six-story building completed in 2006. When the other developments are completed there will be a level of retail along with two levels of offices in Garrison Corner and The Odeon will house four as well as two levels of underground parking. The two projects are about three blocks from one other.

“They will be iconic buildings because Marda Loop is an inner city neighbourhood and there is a lot of re-densification going on. It is right next to Garrison Woods where Canada Lands won an award for inner city development,” Porozni says.

Other major initiatives Ronmor is working on includes Phase 5 of Preston Crossing, a 110,000 square foot piece of land which is being developed in association with the University of Saskatchewan. The nearly nine-acre development site is located within a 57-acre retail power centre. Total development of the first four phases totals 687,000 square feet. Plans are underway to include various amenities including pedestrian-friendly walkways, green spaces, and bike parking areas in the fifth phase of this centre.

Another significant project is Cooper’s Town Promenade, a large 12-acre site in southwest Airdrie, also with about 110,000-square feet. It is scheduled to be completed a little more than a year from now with a shopping centre that will service the needs of the area with grocery, pharmacy, financial, and various food services.

Throughout its many projects Ronmor has made great strides in reducing operating costs for its tenants, but now that has successfully been accomplished, property taxes have escalated to about three times the level they were when Porozni first started with the company. As he points out, it’s always attractive to defer maintenance – but it’s a mistake. Properties need to be taken care of and refreshed every eight to 10 years on average in these business sectors.

“We’ve even done a lot of refreshes on industrial properties that we own, sometimes spending up to $3 million a shot,” he confirms. “That’s money right out of our pocket. That’s got nothing to do with the tenant because these are capital improvements. We run first-class properties and make the commitment to keeping them current.”

In looking towards the future, it’s Porozni’s hope and desire that he’ll be doing much of what he’s doing right now, and more of it. He expects to see more mixed-use, complex projects with increased density in the new developments moving forward.

Another primary goal is to be a major land developer competing with the likes of Genstar and Brookfield, which would represent the company’s biggest transition in the next five years. With more than 6,000 acres of and at their disposal in the Calgary region, Porozni envisions a portion of that land will eventually become commercial sites within it once the residential sector builds out. The company now has a land development department which is moving the business into the direction of Ronmor being its own developer, rather than partnering with other developers on residential land development.

“It’s a whole different element that we’ve never launched or been involved with previously. This way our partners are the house builders as opposed to another developer,” Porozni says.

The Ronmor staff includes planning and development experts and a property management team. The company has two in-house leasing professionals and soon to be three construction managers – a Director of Construction and his team. Five people work in the property management division and seven are in the accounting department.

A tremendous portfolio, excellent teamwork, camaraderie and a shared vision amongst some of the best and brightest people in the industry is why Porozni is so confident that Ronmor Developers will continue to grow and become an even bigger name in mixed-use land development.

“I’ve had my partners for 17 years now and you couldn’t find a better group of people to work with,” he says. “They are all trusting and generous and willing to take the risks to develop what we’ve got. It’s a very trusting and transparent relationship and I think that’s quite rare. I don’t know too many people who have had that opportunity, so I’m very fortunate.”

www.ronmor.ca