Private equity profession and Innovation in Entrepreneurship through the eyes of Ardy Khavari
Nowadays, it seems as though the entire city of Toronto has become one large construction site. For the better part of a decade, there has been a steady increase in residential projects, from townhouses and subdivisions to luxury custom homes, and not to mention the countless condominium projects still sprouting up all over the city. Of course, all of the various construction projects have also resulted in varying degrees of success and quality, with some projects selling out quickly, and promptly providing buyers with a high-quality finished product, while others have experienced delays, were cancelled altogether, or did not live up to the buyers’ expectations upon possession. The key determining factor in the success of all of these projects has normally been the team or individual behind the operation - and Ardy Khavari has been that individual in numerous projects.
Despite his rather young age, Mr. Khavari has accumulated a wealth of experience in financing and developing real estate projects. While many new developers have used Toronto’s hot market as an opportunity to create a name for themselves in the real estate and construction industries, there are also those individuals and companies which carry with them years of experience, and have built a long-standing reputation for professionalism and excellence stretching back decades (in some cases even generations) by consistently completing projects with efficiency and great attention to detail. Khavari falls under the category of the latter.
We had an opportunity to sit down with Ardy to discuss his background in business, along with how he entered the construction industry and maintained his elite reputation.
When were you first exposed to the world of business and development?
From a very young age, I was frequently in boardrooms sitting through long meetings and I would listen carefully to the business conversations of my elders regarding their various business dealings, which many times consisted of finance, International trading, development and construction.
I gained a lot of extremely valuable business knowledge throughout this time, with one of the main lessons being: no matter the amount of funding or capital a project has, if the team behind the operation does not work together as a unit, and individuals focus on only their own personal benefit rather than the benefit of the team, then the entire project will more than likely be unsuccessful.
What type of financing and development projects have you been involved in throughout your career? Have there been any major challenges you have faced?
I was exposed to all types of projects throughout my childhood, from smaller single-home construction, to large-scale commercial developments. Since beginning my own ventures in my adult years, I have launched and completed various projects ranging from luxury custom homes and townhouses/subdivisions, to mixed-use and residential condominium buildings.
What are your views on the current and future status of the Greater Toronto Area’s Real Estate Market? Will you continue to carry out condominium and luxury custom home projects as you have throughout your career?
I think the COVID pandemic slowed things down for a short while, but it set the stage for a great comeback, as we’re seeing now. In fact Sotheby’s recently reported that the total sales of homes valued at over $4M in Toronto have risen over 150% in the first quarter of this year, as compare to the same time in 2020. Homes sales of all values also increased 52% as a whole, which shows strong growth happening again in the City, as pandemic restrictions are eased and we slowly return to normal life. Condominium sales have also continued to rise, as many younger and first-time buyers enter the market amid low-interest rates and competitive prices. All of these are indicative of a very strong rebound and great future potential for real estate in the area during the coming years. So needless to say, yes, I will continue to be active - if not more active - in the GTA’s development and construction industry, especially in the luxury home and condominium markets.
Obviously, many things have changed since you first entered into the world of real estate and development, and as we have seen recently, the COVID-19 pandemic significantly reshaped the world economy in a very short amount of time.
How have you and your company been affected by the pandemic, and what has been your response?
I think that the worst effect the pandemic had on us was truly just the initial fear and worry for the heath of our loved ones and associates. There was a period where everything was uncertain and regulations were rapidly changing that unsettled everyone, however in terms of business, we have continued to push forward with steady gains and profits throughout the past year. Also, social distancing and shutdowns of businesses have reshaped many markets and caused a plethora of new technologies and opportunities to emerge for investors, such as trading stocks from home, cryptocurrencies, and now even NFTs.
What would be your advice to individuals who lack savings or a lump sum of cash to place as a down payment/deposit, but have a strong monthly cash flow, and are looking to start investing their money?
I understand there are many people, especially now the younger generation, that have been able to do well in their respective industries and have begun to generate pretty substantial income from their work. With all of the luxuries and indulgences available to us nowadays, especially when we have cash in-hand, from Restaurants and Entertainment to High-End Fashion and Jewelry, it is very easy for many people to start spending much of their new-earned income before putting any money aside and saving. Human nature attracts us to luxury and beauty, but these things usually come with a hefty price tag.
What I recommend for many of these individuals is to get out of the driver’s seat, and allow someone else to steer the vehicle. If it is difficult to save in your own, you can always spend the extra income on purchasing pre-construction units (condominiums, subdivisions, townhouses, etc.). This allows for the developer to essentially save money on your behalf, as a sort of piggy-bank, and steer your investment vehicle. As long as a hopeful investor can find a commitment which is a long-term investment (such as Real Estate), and is mindful of the risk-reward ratio (debt/liability vs. anticipated return), they will be successful.
What are some of the new technologies/industries you are most interested in currently?
Our firm has been involved with cryptocurrencies and startup tech companies for quite some time now, and it has always been a personal interest of mine. Recently, I have been looking more into NFTs - Non-Fungible Tokens. Essentially, these are like cryptocurrencies in that they are a digital asset, however unlike cryptocurrencies they cannot be used as money to buy and sell products. Instead, NFTs are more similar to collectible coins or pieces of art. There have recently been a number of high-profile artists, musicians, and business moguls launching their own ventures into the field, with some celebrities already making millions of dollars from the sale of limited edition NFT releases. It is an exciting time for the digital space and we are witnessing another tech boom, fuelled even more by the pandemic. However, as with any hot market, there is a lot of “hype” and speculation associated with many of these products, and they all have the risk of being fads that later die down, which is why it is important to always do one’s due diligence and stay up-to-date with the latest research and news, to avoid making the wrong investments.
Ardy Khavari continues to remain active in investment banking and Private equity, while actively pursuing opportunities in multiple markets. What changes the future holds are still unclear, however, one aspect that has been quite clear throughout his entire career has been Mr. Khavari’s professionalism and seasoned expertise, helping to mitigate risks and losses in the face of countless obstacles and turmoil.
Ardy Khavari’s deep roots in the investment banking world industry and his knowledge of finance have resulted in a long list of successful projects - a list that is ever-growing. It is certain that Mr. Khavari will remain a key player in Toronto’s financial industry and major factor in the area’s continued growth in many industries for years to come.