Fortis Properties Corp.

As property development firms have learned the hard way, developing assets for long-term profitability is the most promising way to survive the ups and downs of the market. Fortunately for Fortis Properties Corp., headquartered in St. John’s, Newfoundland and Labrador, the company has focused on retaining strong assets in select markets, efficient operations and cost control as well as emphasizing customer service to spur its growth.

Fortis Properties was founded in 1989, when it purchased the Fortis Building in St. John’s, Newfoundland and Labrador, representing its first foray into commercial real estate. Today, the firm boasts a diversified portfolio that includes three divisions – commercial real estate, hotels and non-regulated hydroelectric generation.

Fortis Properties owns and operates 21 hotels, representing more than 4,100 rooms in eight Canadian provinces; 2.7 million square feet of commercial and retail real estate; and six hydroelectric generation plants in Ontario.

“Fortis Properties has operations across Canada with approximately $600 million in assets,” says Tim Doherty, regional property manager – New Brunswick Real Estate. “The company has experienced steady growth by acquiring or building strong assets. We started in Newfoundland and Labrador and expanded to Western Canada.”

The firm owns and operates such prominent buildings as Blue Cross Centre, the Delta Brunswick/Brunswick Square complex and Kings Place in New Brunswick, the Maritime Centre in Halifax, and the Fort William Building and TD Place in Newfoundland. “The bulk of our commercial real estate is in Atlantic Canada,” Doherty adds. “There is over 1 million square feet in New Brunswick with roughly another 1 million square feet of office space in Nova Scotia and Newfoundland.”

No matter where it operates, Doherty says Fortis Properties relies on the quality of the local contractors it hires for its projects.

“Our relationship with the contractors is somewhat of a partnership based on mutual respect,” Doherty explains. “We work together with the common goal of delivering high-performance results to our tenants.” Fortis Properties’ key partners include Pinnacle Engineering Inc. and Securitas Canada.

Cost and Capital Management

No matter what the type of property, Fortis Properties remains diligent in its cost and capital management. “The company has a long-term approach to asset management,” Doherty adds. “The company reinvests to maintain its competitive edge.”

He cites Fortis Properties’ recent capital improvement program that saw the company invest millions of dollars into expansion and renovation programs of its properties.

Fortis Properties started improvements in July to the exterior of TD Place, which was built in 1982. The recladding project is estimated to cost approximately $5 million and will take 10 months to complete. This project is just one of a number of continuing capital improvements in the company’s portfolio.

“We’re always diligent in taking a balanced approach to investment by managing costs, given the current challenging economic environment, while continuing to meet or exceed tenant needs and expectations,” Doherty says.

In early 2010, Fortis Properties completed a seven-story expansion of its own Holiday Inn Express in Kelowna, British Columbia. This expansion added 70 guest rooms – for a total of 190 guest rooms – and repositioned the hotel in the market with the addition of catering services and six meeting rooms that total 4,500 square feet. The project cost $12.3 million to complete.

Fortis Properties also is in the midst of a $10 million multiyear renovation program for its Sheraton Hotel Newfoundland property in St. John’s. The first phase of this program involved investing $5.3 million in extensive guest renovations and public and meeting space enhancements in 2010. The hotel’s restaurant and lounge were renovated and rebranded as Oppidan and bivver, respectively.

Additionally, Fortis Properties also looks for new opportunities for growth through new construction projects, where appropriate. In April, the company announced its proposed $50 million development project for a 12-story office building in downtown St. John’s.

Customer and Tenant Relations

“We remain committed to delivering quality service to our customers and tenants,” Doherty says. “A company needs to be able to grow with its customers.”

In 2006, Doherty was extensively involved in the $7.2 million, 57,000-square-foot expansion of the Blue Cross Centre in Moncton. “As the largest office building, with over 320,000 square feet, the Blue Cross Centre is a landmark in the downtown core. We were pleased to add to the area’s appeal,” Doherty says.

“We are in it for the long-term,” explains Doherty. “In commercial real estate, we develop and build long-standing relationships with our tenants. The same goes for our relationships with contractors and suppliers. It’s important we align ourselves with vendors that have a similar culture.”

Not only are tenants and consumers taking notice, but the industry has as well. The Building Owners and Managers Association (BOMA) recognized Fortis Properties in 2010 and 2011 with two industry awards – the Pinnacle Award for Customer Service and the Team Excellence Award.

“BOMA’s Pinnacle Award recognizes outstanding customer service and commitment to tenants, and the Team Excellence Award is awarded to the group that exceeds client expectations,” Doherty adds.

Growing with Employees

Doherty foresees additional growth for Fortis Properties despite the economic climate in North America. “This is because the company believes its employees are its most valuable resource,” Doherty says.

“As the company positions itself for the future recruitment of new employees will continue to support growth, operations and service,” Doherty says. “Building a work environment that promotes safety, community and a sense of employee engagement is the cornerstone of our corporate culture.”

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