Here’s why the CEO of homebuilder Minto thinks Toronto’s condo market won’t crash

Running a family business is tough.
Being the first non-family member to run it is tougher — unless you’ve already been welcomed as one of their own.
In 2013 Michael Waters became the first CEO of the Minto Group that didn’t share the last name Greenberg, the family that founded the home building company in 1955 and had run it up until that point, though he did share many of their values.
“In the late ‘90s or early 2000s the family had the realization that there wasn’t necessarily someone in the third generation that wanted to step up and lead the business,” he said. “I think I happened to be in the right place at the right time; sometimes it’s better to be lucky than good.”
That penchant for modesty, however, along with a shared passion for sustainability, philanthropy, and innovation — not to mention an impressive résumé — likely had a lot to do with it as well.  
The Kamloops, British Columbia-native studied finance at UBC, which he funded by serving in the armed forces, before joining KPMG in 1992. There, Waters earned a chartered financial analyst designation and got his first taste to the real estate industry via the accounting firm’s clients, including one that hired him to temporarily fill in for a financial controller on leave.
Waters then earned an MBA from Wharton followed by brief stints at PricewaterhouseCoopers and Bain & Company, before landing a senior vice president role at Intrawest, the real estate company behind ski resorts like Whistler-Blackcomb, Mont Tremblant and Blue Mountain.
“I’d still be there, but the company was taken private by a hedge fund in 2006,” he said, adding that Minto happened to be looking for a new CFO at the time. “I’m not sure I was totally qualified for that role, but somehow I convinced them that I was, and they took a chance.”
Waters became Minto’s CFO in 2007 and was promoted to CEO in 2013. The company, which started with the construction of three homes by four brothers in Ottawa in 1955, was responsible for Ontario’s first highrise condo in 1969, the nation’s first multi-unit highrise to achieve LEED Canada certification in 2006 and the first community to use geo-exchange technology in the GTA in 2021.
Minto now builds roughly 4,000 each year in Ottawa, Toronto, Vancouver, Calgary, Edmonton, Victoria, Florida, Texas and South Carolina, and manages tens of thousands of rental units in those markets. In September of 2023, two years ahead of its 70th anniversary, Minto marked the construction of its 100,000th home.
The Star spoke to Waters from the company’s Ottawa headquarters about Minto’s storied past, how diversification helped the real estate giant stay nimble in a volatile market, whether the Toronto condo market is headed for a crash, and a fruitful partnership with the late Margaritaville singer Jimmy Buffett.
When I joined 2007 it was transitioning from family run to a non-family run, and over the next five years the family managers were retiring from the business. In a family business, a lot of the culture is bound up in the family’s story.
When I was named CEO, we had worked together for five or six years at that point and there was a good culture and values fit, so that probably made it easier for them.
The Greenbergs had always been very committed to giving back; not just performative corporate philanthropy, but a deep commitment to giving back.
For example, this year we published our 15th annual ESG report, which means our first ESG report came out in 2009, long before it was common, and it was really spearheaded by some of the shareholders who had taken on sustainability as a passion.
They built the first Energy Star home in 2003, Canada’s first LEED certified high-rise condo in 2006, the first LEED Gold certified residential condominium in 2007, and we started doing net-zero homes in 2008, so this is something they’ve always been invested in.
Recently, we did the first geo-exchange community in the GTA, in Oakville. It’s a community of five condo towers, and we made the decision to make that heavy upfront investment in geothermal exchange to heat and cool these buildings.
As Canada moves towards its goal of net-zero we know that real estate has an opportunity to be a big part of the solution, and geothermal technology will make that a heck of a lot easier.
When I became CEO, the family had made investments in a range of real estate types; we were in commercial, retail, industrial, and had some hospitality assets. When I became CEO, I took stock of where we were and said we were going to focus on our core strength, which is developing and investing in residential real estate.
Second, we put an emphasis on growth, both in the markets we were in at the time, which were Toronto, Ottawa and Florida, and new markets like Calgary, Edmonton, Vancouver, Victoria, and in the U.S., where we expanded into South Carolina and Texas.
Third was attracting outside capital. For years the business had been financed from its own balance sheet, and we were seeing more opportunities than we could finance on our own. So, we embarked on a multi-year process to attract outside capital — like private equity, pension funds, institutional money, life insurance companies — and in 2018 we tapped the public equity market by taking our apartment business public.
Fourth, was a big emphasis on the plumbing of the business, like attracting, retaining, training, promoting and developing our team members, focusing on employee engagement and health and safety, while also onboarding more operational oriented technology.
We really do the whole spectrum, from condos to low-rise, single-family homes, town homes, stacked town homes — whether it’s to own or rent.
it’s very complementary, because there are times — and this market is one of them — that’s not conducive to developing condos. There is almost no buyer interest today in Toronto, and developers can’t attract the kind of pre-sales they need to get construction financing.
Being able to do rental in urban development sites is a fantastic strategic complement to condos, because in a market like this we can pivot quickly from condo to rental, since we are a rental operator and developer, and have been since 1955.
I’m optimistic that it’s not.
Typically, condo developers cannot get a construction financing commitment without a sufficient level of qualifying presales, and without that they won’t start construction. That is a huge firebreak for us as an industry.
Right now, we have a surging demand for housing driven by population growth. We’re amongst the fastest growing countries in the world, and we are undersupplied. The peak year of housing construction in Canada was 1977 — I remember seeing Star Wars in theatres that summer, when I was about six-years-old. Since then, the country has grown by about 10 million-plus people, but we’re producing less homes.
There is going to be some pain, for sure. Individuals, investors in condos, those renewing mortgages in the next couple of years, there’s going to be an ugly reset there. I assume there’s going to be some adjustments from a lender perspective, like extending amortization periods, but we haven’t seen prices adjust meaningfully.
For a whole bunch of reasons — banking discipline, surging population, relative undersupply — I’m optimistic that we won’t have a major correction.
You can add the fact that household incomes have been lagging in Canada, so nationally it takes 60 per cent of the median household income to afford the average home, and in places like Vancouver it’s over 100. That is historic lows from an affordability perspective.
The government is saying we need to build three and a half million homes before 2030, something like 550,000 a year, and right now we’re on track for about 244,000 this year, so that’s just not realistic. Our record from 1977 was about 280,000.
We have a lot of well-meaning policy makers, but they’re not always coordinated. We are seeing tax policy, mortgage regulation, immigration policy, infrastructure funding policy, education and training, and that all jars with municipal planning policy. I think we need more coordination, and unfortunately, it’s not happening.
I wish I could take credit for it, but our team at Minto Communities USA brought it to fruition. We’ve been building active adult housing in Florida since the ‘80s for those 55-plus. A few years ago, we developed a strategic relationship with Jimmy Buffett’s branding company to market active adult living under the Latitude Margaritaville brand, and it’s been very successful. We’ve sold 7,000 of these homes and we’ve expanded into other states.
It’s not your parents’ retirement home; it offers a break from traditional active adult housing which is really golf centered — we don’t have golf in our Latitude communities — but they are fun, social, and live music is a big part of what we do.
Let’s just say there are plenty of blenders around.