Ugo Bizzarri, Co-founder & Chief Investment Officer

Ugo Bizzarri has a dream for Toronto. He would like to see Toronto rents increase by 40-50%. As Timbercreek’s chief investment officer, Ugo Bizzarri has the power to make that dream a reality. As the head of Timbercreek, Bizzarri is responsible for acquiring and financing more than $7 billion worth of multifamily residential properties. In the rents of Australian cities like Sydney and Melbourne, which are currently 40-50% higher than Vancouver and Toronto, Ugo sees something to aim for. 

An alumnus of the Toronto all-boy private school Royal St. George’s College, Ugo went to Western University with his future Timbercreek co-founder Blair Tamblyn and Starlight CEO Daniel Drimmer. Out of university, Ugo worked for the Ontario Teachers’ Pension Fund. It’s these connections that Ugo used to make sure his new company, Timbercreek, would be well-funded and a big player. “Timbercreek is well positioned to add to its apartment holdings due to its deep connections in the industry.” David Melo, another Timbercreek executive, said, ‘It is really the relationships over the years that have been built up, particularly by Ugo.” Timbercreek has long-established connections to notorious slumlord Transglobe, dubbed “Canada's worst landlord” in a CBC Marketplace documentary. The two companies were involved in a big deal in 2008, which gave a huge boost to Timbercreek: “Bizzarri says while Timbercreek was part of the consortium, TransGlobe's President Daniel Drimmer, deserves much of the credit. ‘If it wasn't for him I don't think the deal would have gotten done.’”

Ugo says, “Demand in multifamily is enormous and we don’t have enough supply, and that will continue to go for the next five to 10 years,” What Ugo Bizzarri does not say is that Timbercreek is partially responsible for that lack of supply. After purchasing the West Lodge towers in Parkdale, for instance, Timbercreek began their mission to clear out old tenants and increase rents. While Timbercreek refuses to provide any real rent relief for tenants at West Lodge during COVID-19, they are also keeping 150-200 units vacant in the buildings. In this they show that they are entirely able to forgive tenants’ rents throughout COVID-19 but the only time they are willing to forgo collecting rent is when it is part of their long-term plan for increased profits.

Blair Tamblyn, CEO of Asset Management

Blair Tamblyn went to Western University with both Daniel Drimmer (Starlight’s CEO) and Ugo Bizzarri (Timbercreek’s Chief Investment Officer). He is now the Chairman of the Board for Timbercreek Mortgage Investment Corporation, as well as the Timbercreek Senior Mortgage Investment Corporation, and the Managing Director and CEO of Timbercreek Asset Management. He manages assets at Timbercreek worth over $4 billion. Blair believes that small landlords don’t squeeze enough value out of their buildings. Timbercreek does a better job of squeezing out every last dollar.

“Small owners do ‘a less than exemplary job of squeezing all the value out of their buildings,’ senior executive Blair Tamblyn said”

Blair infamously compared his approach of managing apartment buildings by evicting tenants and raising rents to a “car wash”: “On the front end, you put in a multi-res asset that, in our view, has not been operated to its fullest potential, and about two and a half years later, it comes out the other end looking squeaky clean and ready for an institutional buyer to acquire it. The first few buildings are starting to come out of the clean end of the car wash.”

Blair says that residential real estate is a secure investment because people will always need a “roof over their head.” He said, "When we are looking for ways to generate a predictable yield on an apartment building, where the rent comes from tenants who are paying for a roof over their heads, is far more predictable than owning a shopping mall where the tenants' ability to pay rent is driven by sales of a business."

David Melo, President Timbercreek Communities

David Melo is the president of Timbercreek’s in-house property management company, Timbercreek Communities. When David was promoted to president in 2016, he said, “I came into this role because it is my goal to be the best property management company in the country.” What he didn’t say is what ‘the best’ means. Timbercreek coined a term for their particular style of managing buildings. They call it “active management.” David and Timbercreek ‘actively’ encourage “lease rollover” and “contractual rent increases.” Timbercreek’s patented “active management” means they will do cosmetic upgrades to their buildings instead of repairs to tenants’ units. “Things like renovating an apartment building’s lobby or adding high-end amenities can generate higher rents over the long term.”

David knows what “active management” means for tenants: evictions and higher rents. He even corrected himself in an interview, spinning this fact to Timbercreek’s advantage, saying these ‘improvements’ “typically come with higher rents, or improved rents.”

CityNews interviewed David in the West Lodge towers in the Parkdale neighbourhood of Toronto and told him, “With the current housing crisis in the city, residents also question why Timbercreek has left 70 units in the highrise buildings sitting empty.” Melo replied, “Yeah, it is quite a few. When we took over, there was about 25 that were vacant.” There are now 150–200 vacant units in the West Lodge towers.

Canada: Exporting expertise

“On the front end, you put in a multi-res asset that, in our view, has not been operated to its fullest potential, and about two and a half years later, it comes out the other end looking squeaky clean and ready for an institutional buyer to acquire it,” [Tamblyn] says. “The first few buildings are starting to come out of the clean end of the car wash.” And Timbercreek plans to raise another US value-add fund.

Toronto: Cranes on the skyline

For institutions that want to participate in the rental boom, says Bizzarri, “the opportunity is finding the local market that is getting gentrified and making an investment to create core. Our goal is to find opportunities to create value, not to buy core.” He gives an example of a multi-family property that Timbercreek acquired from an individual owner in a location that was being gentrified; his firm invested and rebranded the building.

'My Parkdale is gone': how gentrification reached the one place that seemed immune

By the winter of 2019, tenants reported a rash of eviction notices. In March, dozens of hired a bus to take them to Timbercreek’s corporate head office in Toronto to serve their new landlord with hundreds of maintenance requests and a notice of their own. In a video of the event, one of the protestors made clear their chief concern: that the company was taking people to the landlord-tenant tribunal to evict them, and that, internally, Timbercreek had likened tenant removal to “putting a building through a car wash”. “This is the dirt you’re trying to wash away,” the protestor continued, gesturing to her protest sign-holding neighbours. “We are here to put you on notice: You have no idea the neighbourhood you are messing with.”

Herongate residents contend with below-grade conditions and a rent increase, while councilors and developers mingle

“Parrish also explained that since moving in the previous July, her apartment had been overrun by cockroaches. Despite several half-hearted efforts by Timbercreek, the infestation continued. Things were so bad that cockroach waste products were aggravating her daughter’s asthma. Jonas said that in the end, he ended up paying around $1,000 out of pocket to hire his own exterminators and pay for hotel bills and storage fees in order to regulate the problem. He was never reimbursed. Jonas also explained that one of the elevators consistently malfunctions. This puts residents in an unpleasant bind, he said, because the stairway was filled with a terrible stench. Either people had to wait a hellishly long time for the elevator or take the stairs — and, as he put it, “you literally have to plug your nose in the staircase. It smells like poop.”

Trinity, Timbercreek partner on two Toronto developments

The partnership has unveiled plans for two Toronto properties from the Main + Main portfolio, which they joined forces to acquire in early 2018. One is located at the southwest corner of Queen and Bathurst Streets and the other is at the northwest corner of Bloor and Dundas Streets. The two companies bought 16 Ottawa and Toronto properties during that transaction.”

Multi-res prez sees growth ahead for Timbercreek

Now the fifth-largest player in the multi-res game, Timbercreek is well positioned to add to its apartment holdings due to its deep connections in the industry, he added. “It is really the relationships over the years that have been built up, particularly by Ugo.” With an older portfolio compared to new or nearly new condos, Timbercreek’s competitive advantage might be its deep pockets. “We do extensive capital improvements to our properties,” said Melo. Improvements “typically come with higher rents, or improved rents from when we acquired a property,” he added. “But we really need to remain competitive with the market. At the end of the day a prospect is not just going to look at us not just against another apartment building but they will look at us relative to a privately held condo unit.”

Rent hike tension spills over at Carling Avenue highrise

Tenants tried unsuccessfully to stop Timbercreek's application to increase rents by 5.5 per cent this year by taking their case to the Ontario Landlord and Tenant Board, although Timbercreek said it's still waiting for the decision to be formally approved. Since the increase is higher than what's normally allowed, Timbercreek applied for an exemption in order to pay for "significant capital investment expenses" like garage repairs and renovations to the common area. The company argued they needed that higher-than-usual rent hike in order to perform those repairs, something that's allowed under provincial legislation.