How A Lender Actually Looks At An OSC Project

0:00 Meet Jimmy Castonguay: A Lender's Path to Greenbirch Capital If we were just talking about can offsite construction and prefab components help us build housing faster, the answer is definitely yes. But that is only one component of actually executing a development, and we have to address all of those things. 0:15 But it's a really broad spectrum and it's just messy. On this week of the MMC podcast, I'm speaking with Jimmy Castonguay from Green Birch Capital. Jimmy talked everything finance and how that ties back into prefab and off site construction. This is a really informative 1 and I know you'll enjoy it. 0:37 Good morning. OK, I'm here on the MC podcast with Jimmy Kasinga from Green Birch Capital. Thanks for joining us. 0:45 Speaker 2 Thank you for having. 0:45 Speaker 1 Me. So we were just laughing, sitting here trying to get microphones and headphones working and figuring out Jimmy's last name. But I think we finally have that sorted out. So let's get into it, man. We've got a lot of stuff to talk about. I'm sincerely excited about this. 1:02 Today's Friday. It's early May and all week I've been waiting to record this episode because I'm pretty fired up about the world of financing and lending as as it pertains to to real estate and because I think I truly understand now that that that that this is the unlock. 1:24 So it this is going to be a really fun and I think truly insightful chat. I know for myself, but I hope for for anybody that's listening to to kind of see behind the curtain and understand how this can impact their projects. 1:42 So before we get into the nitty gritty, Jimmy, do you want to just tell us a bit about who you are, your background and your journey to where you are now with with Greenberg? Yeah. 1:51 Speaker 2 I've been, you know, in the commercial real estate space now for about 15 years. Started my career at Laurentian Bank and, and, and covered the, you know, the Southern Ontario markets at the time. We were looking at a lot of bridge and construction financing. 2:10 Then I spent 10 years at First National Financial where similarly I was, you know, focusing on commercial real estate lending. First National, you know one of the, you know the largest SMC lenders or at least partners ground my teeth doing both term and a construction financing while I was there and then finally joined Greenberg to about just over 2 years ago. 2:37 And we do focus a lot on CMHC financing right across the country. And you know, generally I would say that our expertise lies in in multifamily. 2:49 Speaker 1 Got it. Great. OK, so you've had a journey like many people like go from from one company and then they they see a carrot somewhere else and they go to the other. Why? You know, why not stay where you were at Laurentian or then at first Nat and then now at Green Birch? Like look, what were you chasing? 3:05 What was exciting for you at at each next stage? 3:07 Speaker 2 You know, at, at the first, well, moving from Laurentian Bank to, you know, to First National, I was, I mean, back then, you know, I was a lot younger. So my, you know, my motives were maybe a little bit different, but I was really, you know, at the time looking to, to move back to, to Toronto. 3:25 You know, for, for those that may not be familiar with the, you know, Southern Ontario Kitchener, which is where our, our office was, is only about an hour, hour 15 from, from Toronto. But you know, it, it can feel like a lifetime when when driving that. So I was looking to, to come back to the, to the city actually knew somebody at first National. 3:46 So, so made that jump and, and transition and, and really that's, you know, being at first National really open the my, my, you know, door to, you know, the CHC world. When I was at Laurentian, we weren't really doing much, if any CC financing. 4:02 So that kind of opened up my experience to, to what it is today. And then moving from First National to Greenwich Capital really was a, a decision to join a smaller organization. 4:20 You know, when I first joined at Greenburgh, we were probably a dozen or, or just over a dozen people right across the country. And, you know, that's significantly smaller than, you know, what I was leaving behind at at First National. And really I was, you know, looking to, you know, 1, you know, grow my, my leadership experience and then being able to help a smaller organization grow into, to something, you know, bigger and better. 4:48 Um, but also, you know, give me a more rounded experience on, on the financing side. You know, I had done a lot of CMC financing and, and we did cover other asset classes while at first national, But you know, at Greenburgh, it allowed us or allowed me at least to, you know, to touch into, you know, a different bore profile, different markets and even, you know, different asset classes, even though, you know, most of what we do is CMC or, or at least multifamily related. 5:20 But it at least, again, you know, continue to, to widen my experience. So, you know, from from one move to the next, it's always been, you know, at least trying to grow my my personal and professional experience along the way. 5:35 Unpacking the Difficulties of Financing Prefabricated Projects Yeah, sure. OK. So that's a great segue because this is what I want to talk about is offset construction prefab prefab components. In the world of construction and developing, it's still a really small percentage of the market, especially when you're trying to do CMHC insured lending. 5:50 It's super small. It's, I mean, basically brand new, right, with just this first commercial pilot project. And we have a really exciting new program or I guess maybe 2 new programs to talk about today from CMHC. So the timing is excellent. 6:06 You have a little bit of experience in funding prefabricated projects, right? 6:11 Speaker 2 That's correct, yeah. 6:12 Speaker 1 Can you, how much of that can you tell us about or just walk us through your experience? Like, you know, what we, what we really just want to do is unpack, you know, why is it so difficult to fund offset construction? Yeah. 6:24 Speaker 2 So, you know, we had done or at least I had done a couple prefab developments when I was at First National, you know, through CMC financing at the time, you know, sync didn't have a, a formal program or, or policy in place. 6:45 So a lot of the, you know, due diligence and risk lay with the, with the lender, But you know, the, the concept even at that time was, you know, to, to make the project, you know, faster and, and hopefully cheaper by going the prefabricated route. 7:04 Now, you know, those projects weren't modules like people talk about today. So you know, modules being that the full unit being built off site and then, you know, kind of assembled like a, a Lego on site. The prefabricated panels were, were primarily, you know, concrete, uh, slabs essentially that were being built off site and then shipped to site and then, you know, formed the, you know, floors and the walls of the building itself. 7:36 But it did, you know, at least for those projects, you know, help speed the project along. Now, I wouldn't necessarily say there was, you know, cost savings from a, you know, a material input, but you know, in the world of development, you know, time is money as well, right? 7:58 And, and anything that you could save in terms of bringing your, you know, your project to market can go a long way and, and saving on interest and ultimately, you know, reducing your overall project budget. But the risks, you know, even for, you know, the, the prefabricated panels and similarly for, for modular construction, which is, you know, a topic that we could get into next. 8:21 But the risk was always, you know, how do you ensure that the one you know, performance is there from the manufacturer? How do you ensure that, you know, the materials once built, which are typically stored off site, whether at the manufacturers facility or even on A, at a third party or related party off site facility? 8:45 How do you ensure you know that those materials are, you know, safe and protected until they come on site and are assembled? Because usually, you know, for a, you know, call it a regular, you know, construction or a regular, sorry, concrete development. 9:03 You know, the concrete is poured on site. So as you're accruing cost, you know, through, you know, the work that you're doing on site, you're getting compensated, you know, through the draw process, typically within a 30 day, you know, cycle of that work being completed. 9:21 But in some cases when it comes to to to prefab is, you know, you're building these panels, you're storing them off site and they may stay there for for several months up until the point where you could actually, you know, deliver them and install them on site. Which means, you know, how do you bridge the financing gap between, you know, actually inputting those costs versus them already being built? 9:49 So one thing that you know, was important was, you know, having the right insurance in place, you know, that would be twofold, you know, having offsite insurance to protect, you know, anything going awry with those panels and then. 10:03 Speaker 1 You're talking like just basic, kind of like pure contents insurance for the physical offset components stored somewhere else. You've already let money. You need to make sure that if there's a weather event or a fire or something that that that those assets are. 10:17 Speaker 2 Covered exactly, yeah. And then the second would be transportation or delivery, essentially insurance. So ensuring that if anything, let's say, you know, you have a flatbed with, you know, 12 of these panels. If the, you know, there's an accident or something happens, you know, in transit that, you know, you would also be covered for, for those materials. 10:40 Cause you could be, you know, you know, talking about hundreds of thousands of dollars worth of materials. And if for whatever reason, let's say the, you know, the, the truck tips over and all of a sudden you break all your panels, I mean, you know, who's responsible for, you know, for that cost. So that's where you know. 10:55 Speaker 1 Yeah. Am I correct that in that scenario it it's it's the freight company, right, Like they should have a contents, the insurance of some sort for transportation, but but is there for you as a lender, does that give you the security that you need or is there still a gap so there? 11:10 Speaker 2 Would be there would be a need for the boat for his insurance to also essentially duplicate or at least cover that transit and off-site insurance with, you know, the lender named as beneficiaries. So then that way, you know, if something were to go arrive and you know, it's of cases, you know, everybody's always trying to point figures out somebody else, right. 11:35 But when it when it comes to to financing, you want to make sure that everybody is, you know, covered from a a cost and monetary perspective. So that's why, you know, the manufacturer themselves may have their own insurance, but it's equally important for the the borrower to have duplicate or at least you know, overlapping insurance that could then name that the lender has beneficiary in the event of a of an issue. 11:58 Speaker 1 This is I'm just snickering because as a business owner for the last 10 years, I've realized that our whole world is basically run around insurance. They are at the centre of all of our decision making framework when it comes to all business decisions almost because we have to work inside of the parameters of what they will cover or not. 12:16 And for better or worse, that's the way it is. Um, I'm gonna say probably for worse because we're talking about having overlapping insurance policies. It's well known and in fact it's favored and, and you know, again, it, it, it is what it is. 12:32 This is not a knock on anyone particular lender or it's just, it's just one of the realities that I want people to hear about and know about when it comes to offsite construction is there is no blanket insurance coverage right now that lenders can employ or, or the manufacturer and or the developer can to make this super simple and easy. 12:51 So we still have a lot of work to do. 12:53 Understanding Conventional Financing and CMHC's Insurance Role CMHC is giving us some great programs, but as an industry you know our system is still built around pretty conventional, well known processes of constructing buildings. 13:04 Speaker 2 It, I mean, at the end of the day, it comes down to, to risk, right? It's who takes on a specific risk through, you know, the development and, and who pays for that risk. And that's where, you know, obviously insurance, you know, takes on the majority of that risk. 13:22 And, and you need to make sure that you know they are on side with whatever is is being proposed or, or developed because you know, they're the last line of defence at the end of the day, if you know something were to go wrong, Right, right. 13:35 Speaker 1 OK. So I want to just take one step back before we go too much further. Conventional process for construction and you jump in here because you're, you're you're the expert on the lending side. But whether it's a, you know, a small single family custom home or a big large multifamily apartment project, it's the process architecture still pretty similar. 13:58 You've got some equity or cash that the that the owner of that project needs to put into give the next lender in line some trust. That next lender in line is more commonly probably not one of the big 5 banks because their requirements are, are a little more stringent or they're they're they're risk threshold, their risk tolerance is lower. 14:23 So a lot of people will take advantage of things like private money or or B markets. And that and that's again, I think that's the case on small or large projects, right? You know, everybody still kind of generally is happy to get their money from an easier source than a big bank to just get through the project because there's already so many hurdles that they're, that they're facing. 14:44 Um, and that is a number of things, right? Those lenders are way more risk tolerant and they really help enable the construction process to happen. Um, they'll still do it similarly to what the big banks would do. They would, they would only give you a, you know, 100,000 or, or let's say a chunk of that money until you reach a certain milestone in, in the construction process. 15:04 And then they would send out a quantity surveyor more than likely to commence and confirm, yet you have in fact reached foundation completion and will release another 100,000 or whatever it is, another 5 million or whatever the size of the project is. So, and that's the, that's called the draw structure, right? 15:22 So during the construction process, you know, you, you, you, you, you take a bit of risk as the developer and then the bank will extend you only, only, or the lender only a small chunk of risk. And then you reach milestones and they, and that way you never get too far out of line and, and get yourself in big trouble where you're, you're way far behind. 15:44 But you spent all the money and now, and now that lender has all the money lent out and it's gone. And the asset is not actually built to the, to the part where it needs to be. So like, generally, I just want listeners to understand that that's the sort of environment that we're working within. It's making sure that the risk is being mitigated, like you said, and it's being managed. 16:03 And so This is why a larger rojects developers are keen to to utilize a CMHC insured loan. And I hear this a lot, but I'm probably in an echo chamber and I want to make sure that we do say this clearly at least once in this episode, is that CMHC does not lend money, right, Jimmy? 16:27 They they insure the money that another lender is going to give, but what the CMHC insurance does is give that lender a less risk on lending more money to you than they would conventionally lend is. 16:43 Speaker 2 That's exactly right. Yeah. So CMC is in a way almost like an insurance company, right? They are providing insurance to the lender in the event of default. So instead of, you know, insurance like you would see on a property in the event that there's, you know, some form of damage and CC is there for the lending world in the event that something goes awry with the financing from a bore perspective. 17:13 And So what I mean by that is if a, a borer stops making their payments, if they get into trouble, if they underperform and that loan now goes into default, then the insurance that CMC has put in place protects the, the lender so that the mortgage itself can be recuperated. 17:34 And, you know, compensation is, is provided through those lenders. Um, so you're right, CMC does not specifically finance, you know, whether it's a construction project or even just a term mortgage, they are there as a, as a backstop for the financing, but it is the lenders ultimately who are the ones to put out their own capital and, and finance these projects or these loans. 17:59 So it is at the end of the day on them to ensure that, you know, the risk is appropriate and mitigated for that development. And you know, just coming back to, you know, your point on, on how you know, the, the draw process works as a, a framework for, for financing, You know, for larger developments, projects are usually advanced on what they call a cost to complete basis, meaning that the developer and owner of the project has to put in their equity first. 18:30 So I'll just use a, a very, you know, easy example. If it's a $10 million project, which includes, you know, land, hard cost, soft costs, financing fees, anything related to the project development. 18:41 Speaker 1 For reference, would be a roughly like 30 unit, 3 story multifamily apartment building, just to give some context. 18:48 Speaker 2 Yeah. So if it's a $10 million project and your loan is, let's just call it 75% of cost, so that would make it a $2.5 million loan. The project equity is 2.5 million. 19:03 That's the difference between the, the project budget and the loan out that amount has to be spent by you as owner before the lender puts out their first draw for the mortgage. So I mean, in a situation where you're putting in 25% equity, that would usually, you know, mean that you've, you know, you've already gotten all your permits, your approvals, you've started construction, you've probably already done your foundation. 19:28 So then to the lender that shows that well, one obviously you've committed to to the development, but you've already taken, you know, the risk of putting in a lot of money into the developer to into the development. So once you. 19:43 Speaker 1 Get in in the game. 19:44 Speaker 2 Exactly. Yeah, that's a better way of putting it. So once you've hit that threshold, that's where the lender will now start advancing their mortgage. And what they do and like I mentioned is they finance it on a cost of complete basis, meaning that as you you complete work on the on the site, they will advance a reciprocal amount so long as there aren't any cost overruns. 20:07 But let's just say in a given period which you know I had previously mentioned is, is usually about a 30 day cycle. But let's say in a given period you spend an additional $500,000 and of work on site. A quantity surveyor will will go on, will go to the site. 20:23 They will verify that the work has been completed. They will review invoices to ensure that you know those have been accrued and then they will advance or they will recommend to the lender to advance that $500,000. The lender advances money and then you keep going and rolling through, you know, the these cycles until you're, you're essentially done. 20:44 Speaker 1 Right. So the QS, the quantity surveyor is hired by the lender to help them de risk the project and be their boots on the ground to do the verification. Yep, This guy has in fact finished the work that they've said the asset has progressed to this level of completion relative to the to the cost and and we're happy to keep lending the next advancement and next advancement. 21:04 Speaker 2 Yeah, and they're also verifying, you know, not just that the work has been done and, and invoices, but they're also they're also commenting and opining on the timeline for completion, which is also, you know, an equally important, you know, part of the process. 21:20 Because, you know, when a loan gets advanced or construction loan gets reviewed and approved and then advance, you know, it's, it's usually on the basis of a specific, you know, timeline. And, you know, there's certain things such as, you know, interest reserves that get calculated off of these timelines. 21:38 And the, IT is, you know, important to make sure that, you know, the project is being built on schedule because if there's a world where, you know, if you don't, you know, meet these timelines, now the project gets extended. 21:54 There may be additional costs not only from the construction side, but also from the financing side, which could now mean that the borrower putting in additional, you know, equity into the transaction, meaning that they would have to have that money, you know, set aside and, and being able to inject that into the development. 22:11 But anyways, just just to, you know, summarizes that the quantity surveyor also goes on site. Makes sure to make sure that you know the project is moving as currently planned and that the you know the completion is still within a reasonable time frame. 22:27 Speaker 1 I think it's really good that you mentioned that. And I want to go back just a bit and unpack that. Because what you've identified is, I'm not sure what the best thing is to call this the guardrails or maybe just the realities of when you're borrowing money and you're taking this level of risk in the world of development and construction, there are very few pathways for you to, to, to get that, that money at a rate for which the project is viable. 22:53 And that's the key part. I mean, there's lots of people that will lend money, but The thing is during construction, you know, even a, even a few $1,000,000, you know, even if you borrow 2 or $3 million over the course of, let's say 24 months, the cost of that money could be two or $300,000. 23:10 Is that right? Like relatively so, so it's really expensive to borrow money during the risky construction period. And the reason that we're talking about CMC so frequently and everybody else in the industry is because CMC has, has leveraged the federal governments power and financial abilities so that they can help de risk this process from a financial lens and make projects more viable. 23:39 But you just, you just touched on something. So key is the reality is that, you know, they're not our friends here. They're lending money and they take it really seriously. And, and it's not, it's still not inexpensive. So the the premiums to borrow money when insured by CMHC are what's the what's the average percentage on the premiums? 23:59 Speaker 2 I mean for for construction, it depends on the program, leverage, amortization, all these different things. But let's just say, you know, it could be in the range of about 6% if not more. 24:09 Speaker 1 Right. So this is the cost of borrowing that money. And So what Jimmy is saying here is that if you get halfway through the construction process, but you are 15% beyond your anticipated schedule, it means that you've already had borrowed that money longer than you planned. 24:27 And, and then that compounds, right, really quickly that starts to add and, and they're going to add more interest because you're going to carry that capital longer and therefore, in their eyes, take more risk. So if you reach a 50% of your completion, but you're 1515 percent extended on your schedule, they might pump the brakes on your project and say, Hey, you've, you've now gone above our threshold, our comfort level of risk. 24:53 And we need you to ante up. We need you to put more cash in to bring that back down. Or, or essentially, you know, you're, you're, you're at a standstill. Is that? 25:01 Speaker 2 Right, That's exactly right. Yeah. So cost overruns, which is ultimately defined as any additional, you know, cost or expense on the project beyond what had been originally approved. 25:16 So just coming back to, you know, my, my example of a $10 million budget, you know, if through this process, whether it's because of, of delays in, in timing and now there's additional interest reserve requirements or, you know, there's just additional hard or soft costs that you've had to incur since the beginning of the project that were beyond the, the original scope. 25:37 Let's just say that the, you know, the project now goes from 10 million to to 10,250,000. The, the, the, the lender had originally approved a loan based on that $10 million. Their loan in, you know, most cases will not change. 25:55 So that 7.5 million that I had, you know, mentioned before that will remain the same, but there's now an additional 250,000 of, of cost. So that $250,000 needs to be covered by the the borrower and that money needs to be spent or injected back into the project before a lender will complete their next advance. 26:17 So they're not going to finance any more of their loan until you've, you know, like you mentioned, brought the risk back down, meaning that they've invested that $250,000 in the development. 26:29 Speaker 1 OK. So let me you know word of caution for all the developers out there, right? Like this is there's massive risk here. You have to manage things so carefully and you need to plan for worst case scenario, right? You need to underrate your projects, assuming you're going to go over cost, the number of budget. 26:47 Now, maybe that's not you know, this is this is this, you know, don't take this as this total legal advice by any means, but but this is a friendly consideration that you you need to have a buffer and, and at multiple steps of the way. 27:03 You need to to make sure you're monitoring that very carefully and paying very close attention because So what happens in that situation? This must happen all the time. You get halfway through the project, all of a sudden the cost of the project goes up a little bit because of justice, time overruns. What a most developers end up doing in this situation? 27:19 Speaker 2 So I mean, they have no choice but to to invest that money into the development. So what lenders you know, trying to ensure upfront is that, you know these groups that are are building that they have additional resources and specifically that they have additional, you know what they call liquid assets. 27:38 So that could be in the form of of Cash, Cash equivalents, marketable securities, essentially access to capital very quickly that can be injected into the development. 27:50 Speaker 1 So the insurance for the insurance. 27:52 Speaker 2 Exactly. So, so most lenders will will you know we'll look for for liquid assets of about, you know, 10 to 15% of the hard cost budget. So if you know, just coming back to to my example, if your hard cost budget was $6 million, that would mean liquid assets of about 600,000. 28:11 So they want to make sure that you do have, you know, the, the resources to cover, let's say this $250,000. And you know, the things need to move quickly when it comes to developments and especially, you know, cost overruns because if you don't cover your expenses in a timely manner and trades don't get paid within a specific time frame, they have the ability to file a lien on the project. 28:44 Now a lien is essentially a, a legal charge on the title that ranks ahead of all other charges, meaning that it would go ahead of the lenders mortgage and that causes, you know, detrimental legal obligations to the, to the owner. 29:04 So you want these liens to be cleared as quickly as possible. But but even more importantly, you wanna make sure that liens don't get filed in the 1st place, which is which is why you know, verification of of a bores, you know, resources prior to the project even beginning and getting approved is important. 29:21 Speaker 1 Build within your means. 29:22 Speaker 2 That's exactly it, yeah. 29:24 Aligning Policies for Modern Methods of Construction Development Yeah, So, OK, I want to bring this back to offsite construction and and prefab components. And, and actually before we get too far, and I meant to say this earlier and I was just trying to pull it up, but on my on my last, on our last episode, we had Brandon Cyrill and he's from University of New Brunswick O CRC offsite Construction Research Centre. 29:45 They just launched the MC or the modern methods of construction framework. The reason that that's so important is because it's giving the industry the framework to operate within. So for lenders, it gives them categories that are now well defined and language that aligns with each of those categories. 30:02 And so at the top of the call, you were mentioning things like precast concrete components versus, you know, wood frame panelized wall components versus ICF, you know, port in place foundations or, you know, there's, there's tons of different components within the category, general umbrella category of offsite construction. 30:24 So I just want to, I want to keep referencing this over the next handful of episodes. So that everybody is aware that this exists and that it's likely going to become the standardized adopted framework across, across the industry because the government asked for it and they went out and created it. 30:41 And, and I think they've done a great job. They're, they're also going to launch a, an update to it really quickly here, which is exciting. So they're on top of, they're motivated to keep it, um, fresh and accurate. And I guess relevant really is the key thing. And this is going to be really valuable because, you know, when you've got politicians at the federal level saying modular in regards to a panelized wall system, I mean, it's just so factually incorrect. 31:08 It's a major problem. And they're, they, they need help, You know, they can't be experts at everything. But the nuance is so critical because the difference and, and, and, and, and so to bring this all back, the difference is the level of risk during the construction process for each of these different categories of MMC. 31:28 And, and, and that's what I think is going to be if we can't get that really clearly defined, then the insurers like CMHC, well and you know, nobody talks about the other two insurers, right. So we've got CMC who will insure mortgages in Canada. 31:44 We have Canada guarantee And the third one is Genworth. Genworth, is that right or no? Yes. Sagan. Sagan. Yeah, yeah. And the other two are are not as well known, but they've been around for a very long time, right? 32:00 Speaker 2 They have so, so those two are, are private insurers in the residential space. And, and what I mean by that is primarily single family homes or at least like you know, residential homes that are defined as you know, 4 or less units within a building. 32:22 Whereas you may see and the the industry in general would define multifamily as five or more residential units within a building. 32:30 Speaker 1 Now this is changing right now. 32:34 Speaker 2 Right. It's, it's changing. Um, well, there was language in the most recent federal budget around expanding the scope beyond just 4 units For I anyways, for, for, I guess what is defined as, as you know, maybe a residential unit, but that's still very new and, and not well defined yet. 33:00 Speaker 1 OK, so it really has not been enabled even though it is being discussed and being marketed by the feds are lovely liberals. They actually haven't. They actually haven't put this into the rubber has a method Rd. 33:14 Speaker 2 Yet. Not yet, no. But I, I think, you know, I mean, if I had to, you know, I have one ask, you know, for, you know, I guess every level of government, but also through, through the industry is, you know, aligning specific policies on the ground with, you know, those at a higher level. 33:33 So what I mean by that is, you know, a lot of, you know, some municipalities have have now expanded the scope of, of as of right developments to let's say 8 units. But you know, 8 units is not as you know, clearly aligned with, you know, other segments of the, of the industry. 33:53 So it's just again, what is being, I think what needs to happen is, you know, full alignment across the entire spectrum. So whatever municipality allows or is, is trying to achieve on the ground, having that supported through government policies at the federal level. 34:10 And then you know, furthermore, you know having the, the financing at the end of the day supportable for those, you know those projects. 34:18 Speaker 1 It just makes me think of the, I was at the Missing Middle Summit in Toronto earlier this week. And for anyone who hasn't been, it's a really great event. I think this was the 4th annual event and, and it's, you know, sort of 100, I guess it's probably more like 2, maybe maybe 300 people now. 34:38 So anybody who who's in the space or wants to be in the space of developing what's called the missing middle housing, which is more than more than duplexes, triplex, quads, but less than multifamily apartments. It's kind of the in between. It's the stuff that everybody is saying, this is what we need to start building because it's attainable and it's a good fit. 34:58 You know, I think like the, you know, my take away at the end of the day, and there's so many good speakers. I mean, I always learn a bunch, but my take away was it's messy and we would love to wave a magic wand about what we'd love to see. 35:16 And and I'd love to think that there are some people at the federal level or or from Simisear build cannon homes listening to this. Let's be optimistic about that. Maybe. But I think though, the thing that I took away from the from the conference is that we will probably always say from our lens of today what we want to see tomorrow. 35:37 And it will always be something different. Like I don't think we'll ever say like no, you know what, it's just all really working great and everything we needed we have now. I'm only saying that because I'm optimistic, but all the stuff that's coming down the pipe, you know, we've got this new program from CMHC, which we'll get into here shortly. 35:54 We've had massive improvements in as of right zoning across the country, especially in the major cities like Toronto Makeover and even in the province of Ontario. You know, they've done a pretty good push to allow three plus ones as of right, meaning on any residentially zoned property, you can have 3 units in the main residence plus a backyard unit without needing to get a zoning bylaw amendment. 36:17 So those are, those are really meaningful improvements. Excuse me, but what, what I think what you're saying to me is that those are only one side of the coin. As a developer, when you have your, you know, your whiteboard in front of you, you've checked off 1 out of 100 boxes when you get those changes and you still have to navigate this really complex process of connecting, you know, the demand of the market, the realities of construction and trade pricing. 36:42 It's a super macro and microeconomic stuff that that's all, you know, converging in one project at different scales. And so we need a lot of different tools and a lot of different forms to actually, you know, really speed U um, the process and, and, and, and the planning for developers to, to let them really. 37:04 Speaker 2 You know, pick up their pace. Exactly. Yeah. And, you know, at the end of the day, and and this will always, you know, be the case, but, you know, it takes time for, you know, the financing world and, you know, in some cases even longer for for the government to catch up with innovative ideas. 37:23 Now, you know, modular is is not necessarily a new concept, but it is a new publicly spoken idea. And, and now we're finally starting to see, you know, the financing and the, and the government piece coming together to support, you know, at least this, this new publicly spoken innovation. 37:43 Speaker 1 Hmm. 37:44 New CMHC Initiatives and Manufacturer Qualification for Modular So, OK, so do you want to talk about the CAC program that just came? 37:47 Speaker 2 Out yeah. So for context, last year CMHC launched a pilot program relating to modular development. So they, they created a, well, you know, it was a twofold approach. One, they were trying to create a framework to allow for modular development to take place through CMC construction financing. 38:11 And then second, they were also trying to get input from the industry in terms of, you know, ensuring that this can be a more permanent fixture within their, their program framework. So finally, after, I mean, just shy of a year, this pilot program is now a permanent fixture through semi C multifamily. 38:34 And to my understanding also through their residential programs of a four or less units. 38:40 Speaker 1 Yeah. So, so the the residential program just for clarity is called the Prefab Plus program and that's going to offer some not incentives, but what's a better way to say that Like it's going to grease the wheels on small residential prefabricated construction projects. 38:59 So and I think they've got a real focus on modular units for that. 39:03 Speaker 2 That's exactly right. And, and same thing on the, on the multifamily side is, um, specifically, you know, targeting modular construction, but it is now as of last week, a, like I mentioned a formal policy within, you know, there are multifamily program. 39:23 Before it was, you know, lenders could opt in to the pilot program, but now it is available to to all lenders who are, you know interested and willing to to finance modular developments. 39:36 Speaker 1 So let's just quickly touch on that again too. We talked earlier about the fact that CMHC is not the lender. They are ensuring loans. I think the thing that everybody needs to remember is that this is not a guarantee, right? This is just CMHC saying we will offer this to the private market and they have the opportunity, but they are not mandated by any means to actually lend money on these types of projects. 40:00 So you might see just trying to make it less risky and more in enticing to them. 40:04 Speaker 2 Exactly. I mean, whether it's modular or even just standard construction through, you know, wood frame or concrete developments, you know, yes, there's these programs available and they're, you know, fantastic, but ultimately you do need to to qualify for them. 40:21 That means that, you know, as you know, developer and owner, you need to have the experience, the financial capacity, the resources and obviously the, you know, the project metrics to actually qualify and get approved for financing. 40:37 Yeah. 40:37 Speaker 1 It still has to just make sense. 40:39 Speaker 2 Mathematically exactly, and you know, it's the exact same thing for this, you know, new modular construction initiative, but now it goes beyond just the scope of, you know, the, the owner and developer. It now also reaches, you know, the manufacturer of these modules. 40:57 So, you know, Simi C wants to ensure that, you know, 1 they're Canadian based, that, you know, they have the, you know, appropriate facility and manufacturing prowess to actually support, you know, that specific development that they're, you know, CSA certified that they've built or at least supported the development of, you know, these types of projects in the past. 41:23 So is, is very similar, right? I mean, they, they want to make sure that you know, that not only can the, you know, the developer themselves, you know, build this project successfully, but they want to make sure that the manufacturers can support this development. 41:39 Speaker 1 Success that they're credible to exactly so much to unpack here I want to be mindful of our time and so I'll try to pick out the stuff that I think is the most helpful for everyone to understand but but I think like but generally here's the point that I want to hit on is that we've talked a lot about the conventional process of funding construction and I think that's helpful to give everybody context and justice understand at a basic level the mechanisms that are at play here and it's really 42:07 about risk so during the riskiest part of construction, people get really excited about prefabrication and you know for the last 10 years we are running a simple life homes, which is prefab panelized components. We mostly served the residential market and as you know, Jimmy, we did a little bit of, of multifamily work and we faced this constantly. 42:30 People would think that they would call us and they'd say, hey, you guys can prefabricate my building, right? That'll make it so much easier and so much faster. It's going to be a total silver bullet. And I mean, and 1 lens. Yeah, that that's true sort of in theory that it will make things a lot easier and we become sort of like a super subcontractor all packaged in, in, in one nice bundle. 42:53 And, but, but the reality is that the lending and the insurance escape just wasn't allowing for that to to come to fruition. And so this program is, is hopefully going to help do some of that. And, you know, the residential side is important. 43:08 But, you know, I think there's an argument to be made that we all need to reconsider the way that our housing is shaped and the way that it looks and, and, and, and, you know, look, look to the Europeans, you know, for, for so long who have built way more livable cities. 43:24 I don't want to get too into the weeds on planning and that sort of thing because everyone has the right to just, you know, choose what kind of housing they want for themselves. But there were some really wonderful conversations at the messy Middle Summit this week about that that had me, you know, I was already convinced on it, but but even more so now just about having community around your yourself. 43:49 And So what I want to do is I want to focus on the commercial multifamily side because the reality is that that's what we need to build. That's what the developers are focused on. That's what the feds are focused on right now. That's what they want to enable with things like Build Canada Homes and and I want to talk about the funding gap, which also ties right back to the same sort of insurance world or the insurance gap. 44:11 So here's what I saw in the multifamily world. We, we, we struggled to participate in commercially financed multifamily projects because of what we've been talking about this whole time. The developer or the owners lender wasn't comfortable taking the risk and lending them money to give to us as a manufacturer to build the prefabricated building components and then ship them to site and then have them assembled on site into what ends up becoming not individual components, but becomes a building and real property. 44:45 And so that's, that's the, that's the, the gap that we need to bridge. And so I spent a lot of time thinking about this and, and as you know, I've, I've made the move and I've been acting as an MMC technical integrator, trying to help developers just manage this process and understand it and, and, and just sort of hold their hands through the whole thing. 45:08 And I've been really focused on the BIM modeling, the planning. A lot of people will call it DFMA designing for manufacturing ability. But it's funny, really quickly after 10 years, I made this pivoted consulting on this stuff. And now after four months of consulting, I've made another big pivot into the world of finance. 45:25 So we're not, we're not, we're not exiting the consulting work. It's just that I think I'm going to split my time and, and our team about 5050 in this work between the consulting and the lending or, or or we could maybe say the brokering of the lending. Because I've realized that all of the recommendations I'm making up front to help the developer enable the utilization of prefab or offsite components is left on paper, if not really carefully connected to the pro forma, meaning that you know, the project budget and viability and actual execution. 46:02 And so the reason for that again, is because the manufacturers need to, you know, typically the manufacturers aren't in a position to to bankroll the developers scope, right? 46:17 So maybe to some extent they can. But you know, on a project we're working on right now, the prefabricated scope is about $6 million on a, on a pretty big project. And the manufacturer's not going to carry that, you know, on behalf of the developer. 46:33 It's just, it's just an unnecessary level of risk for them. So this is again where the developer needs to ante up and put some equity in and use their cash or somebody's to, to cover those costs until it gets to site. And once it's on site and it's assembled and then the quantity surveyor comes out and sees it. 46:48 And then the IT recommends to the lender that, yeah, go ahead and advance the next draw. That could be 6 months. 46:55 Speaker 2 Yeah, the, you know, one of the biggest, you know, issues and, and that's what you know, CMC has tried to solve here is when it comes to whether it's, you know, prefabricated panels or even, you know, actual modules is that a lot of the cost is front loaded. 47:14 Whereas you know, a, a typical wood frame or even, you know, concrete development, you know, those costs and, and you know, the supplies of the, you know, materials being used on site is for the most part spread out over a long period of time. 47:30 So your, your risk in terms of, of paying for those materials or the labour to, to install those materials. Similarly, is is spread out when it comes to, you know, prefab module development, like you mentioned, you know, somebody has to bear the cost of, of starting to to build, you know, these panels or modules that usually requires, you know, sizable deposits to be paid by, you know, the developer. 47:57 And then you also have, you know, the fact that all of these panels, which we've, you know, we've already talked about, but you know, a lot of these panels are being, you know, built early in the process and they're stored off site. 48:12 And, you know, more importantly, but you know, is the the cost of, you know, these materials being that, you know, the the panels are the modules make up a sizable chunk of your overall construction budget. So again, that increases, you know, the the risk at the end of the day. 48:31 And it's twofold, you know, it's trying to figure out, OK, well, who covers, you know, the deposits and, you know, these upfront costs before they're even installed on the site. And how do we de risk that project? Because let's just say, you know, you had mentioned $6 million, you know, contract. 48:50 Well, if you know that manufacturer says, OK, well I need a $2,000,000 deposit to start on this, on this work. And let's say me as developer, I pay them $2,000,000. If they, the manufacturer start building these panels and something goes awry with that manufacturer and they can't finish the, you know, the development of these panels, well, now I'm out potentially $2,000,000, right? 49:15 Because I've been counting on you to build that those panels to be delivered to site and installed on site. But who's going to cover that, You know, $2,000,000 if something goes, if something goes wrong. Whereas in, you know, the traditional, you know, the development world. 49:33 For example, if I, if you deliver, if I pay you $200,000 to, to deliver, you know, wood on site. And I do that in increments as you, you know, deliver and install it. Well, now I'm, I'm only out let's say $200,000 if you, if you miss a delivery or something goes wrong, right, instead of this, you know, $2,000,000. 49:53 Speaker 1 So we're talking about trying to take what is currently being viewed as a, a lump sum of risk and finding a way to increment Alize. 50:06 De-risking Offsite Projects with BIM and Surety Bonds So here's a, here's my take on this. And I and I want your honest to goodness thoughts. We, we've been working really hard up front with clients to, to do BIM modeling. So we're 3D modeling the building itself. And during that process, what happens is that we find the collisions And so we do the clash detection and we generate an RFI request for information. 50:28 And then we, we, you know, we send that, we assign that RFI to whoever is relevant. It's the architect and, and, and very often it's the same stuff. It's, you know, there are columns and beams throughout the building and then there are HVAC components. You know, plumbing, ductwork, fire sprinklers on large buildings are big one and, and there are others, but those ones, the reason they're so critical is because things like plumbing, for example, have to follow the path of gravity. 50:53 They have to be sloped at 1%, you know, in certain areas. So, so their pathway for which they can install a plumbing is pretty rigid. And so they kind of take priority in the building, right? Whereas an electrician has a little more flexibility. They'd hate me hearing, hate to hear me say this, but they do, they do have more flexibility in their components just physically. 51:13 And So what we're looking at is trying to help developers address this because that really can help with just with cost overruns, right? Surprises like this is pretty basic. Conceptually, this is pretty basic. The cost of doing this work is it's not, it's not inexpensive, but what we're finding is that it's less than 1% total project costs and the ROI is absolutely massive. 51:38 But here's the problem. As we're finding that there are things like contract structures and lending and insurance that are blocking the developers from actually being able to, to deploy the recommendations that we're giving. And so especially when it comes to prefabrication and off-site construction, they are, no matter how excited they are about, you know, embracing offsite construction, there are other things in the way. 52:05 And you talked about this earlier, sort of the broader infrastructure and the connectivity of all these things. I think that's really that's where everybody's struggling right now is If we were just talking about can offsite construction and prefab components help us build housing faster, excuse me, the answer is definitely yes, but that is only one component of actually executing a development and we have to address all of those things. 52:30 But it's a really broad spectrum and it's just messy and there's just a lot of it all changing really quickly right now that we have to deal with. So I mean, all of this stuff is good. It's all going in the right direction, but I just think it's so helpful to have you and the other guests that I've I've previously had or I have upcoming for people to understand that like this isn't going to be easy and it's going to take a long time for the industry to. 52:54 Speaker 2 Just improve it is, I mean, it's, it's an evolving process, right? And I know that, you know, a lot of conversation lies right now in, in modular development. And I think it's important to talk about, you know, modular, yes, but also all kinds of other, you know, innovative. 53:13 Speaker 1 Development of other MC categories that you can find in the framework. 53:16 Speaker 2 Exactly because I think that, you know, for, for a very, very long time, you know, construction was was set in its ways and and you know, that was to no fault of anybody because I was just the the best in in the easiest way to to build. But I think that, you know, we now live in a world where, you know, technological innovations will permit new concepts. 53:39 And it's not to say that they're gonna be, you know, supplanting the, the current framework of of the industry, but I think if we could start layering in, you know, new concepts, new innovations, it'll be for the betterment of, you know, the, the industry. 53:56 Speaker 1 Well, I made a note here earlier because I feel like all we've done is talked about all the negative things, all the blockers and, and I don't want to, I don't want to exit on that note. But but ultimately, what are we, what are we trying to do here? Is we're trying to build more housing more quickly and more affordably. 54:11 And, and you know, I'm, I'm an entrepreneur. I think it's really important that everybody has an opportunity to earn money, you know, to earn a living that developers are not big bad wolves. They're they're just really hard working folks very more more often than not. And, and they deserve to, to make a good living because they're taking a massive level of risk and they're providing housing and, and, and that people should not view them as, you know, sure, there's always bad actors in every, you know, every industry, but there's a lot of good ones too. 54:41 And, and, and same with all the trades that participate in that project, right? Like this is, this is all good stuff. We want to enable this. And ultimately, what I made a note here while you were, while you were making some really great points earlier, we want to avoid increasing the barriers for developers. 54:58 O, if prefabrication today in May of 2026 is if a developer has to choose, they're going to take the easiest pathway, every single fork in the road, they're going to say which one, which one is a better fit. And, and sometimes they can make longer term bets. 55:15 Um, you know, that, that, that maybe they can hold the building longer and they'll, and they'll, they'll see their return on an, on a decision made earlier that maybe in the short term is more expensive, but clearly is, is a better long term decision, particularly on things like the, the actual quality of the building. 55:30 So they have, you know, they don't want to just kick the maintenance can too far down the road because it will catch up with them. And, and that's a bad thing. But you know, as a huge pro prefab person, I totally get why some developers don't do it because you have to also just look at the performance and say, well, does this make sense today? 55:50 Because I'm building this house today and, and, and you know, there was at the summit again, there was a fella and forgive me, but I forget his name and, and maybe I can track it down and put it in show notes. But he just said that. He just said the funniest thing. He goes, guys, you know, that housing that we're all bashing from 1975 in 1975, That was great housing. 56:11 And it made a lot of sense on the day that those people made that decision to build that building that way. And we're doing the same thing, right. And, and you know, there's the, the guys who host the event. They made a great point. They have a lot in the city where they just developed 3 multiplexes, I can't remember, maybe 1015 units each, each Multiplex all side by side by side. 56:31 And he said, you know, it makes me think about this project we have on the go right now because in a couple of years from now, if we were making, if we were starting this project at that time, this is the perfect opportunity to just build 1 cohesive Multiplex where it became a 30 or 40 unit building across four or five, six stories, you said. 56:51 But we're just not taking that path because today, based on the policies in front of us and the funding available and the structure around all of these things, it makes, this is what makes the most sense right now. And so you can really see history evolve in our buildings as you walk down the street like Young St. in the city where you've got 150 years of, you know, history in, in like things like policy and, and finance and economics. 57:14 And I just thought, well, it sort of takes a bit of pressure off in, in in a sense of like, we're never going to make it. We will never hit like peak perfect policy and funding landscapes. You just ride the waves of all of those things together and you make the best decisions you can at that time with the information that you have available. 57:32 Um, and I just think that, you know, because there's so many like Nimbys and naysayers and stuff, it's, it's an important thing to think about and consider. And even as a developer, this is just say, like, you know, you can't predict the future, but here's what we've got to work with and here's what we're trying to achieve. And so for me as a big prefab supporter, I'm excited about it. 57:49 I'm still, you know, rooting for the industry and I'm still supporting a lot of people. I'm just wearing different hats these days. But I also, I do understand why it's not always working. And I think that I hope what I can do, and with people like you, experts inside of their own niche, is that we can help developers navigate this as the landscape changes. 58:12 I mean, we're talking like month after month since you know, 20, let's say 20/21/22 until 2026, massive changes in the landscape development across the country, right? 58:25 Speaker 2 Yeah. I mean, I think, you know, I'm not a developer myself, but I would imagine that, you know, the one of the greatest gifts that you could give a a developer is clarity and stability through, you know, the process, right? Whether that's, you know, stable cost, clear processes from a planning and financing standpoint. 58:48 I mean, I think that if you, if you created, you know, that's clear and stable framework, you know, it would allow for developers to to thrive. And, and, you know, I think the one of the issues is that things are they're constantly evolving. 59:05 And obviously that's that's no fault to to anybody. It's just that's the world that that we live in and and unfortunately, you know well. 59:13 Speaker 1 That's a sign of progress, too. 59:14 Speaker 2 It is, yeah. But you know, if, for example, like somebody like CMC can create at least some clarity around, you know, modular and how it can be supported, then it would at least allow people to entertain it. It's not to say that it's going to work for every project, but it at least means that they could have a conversation. 59:33 They could at least start to understand how does it, how would it work for my project? Does it make sense? And, you know, can we move forward with the framework that we have in place? You know, one thing I, I do just wanna touch on quickly coming back to, to see Macy's, you know, modular construction policies is, you know, I had talked about, you know, the manufacturers experience and ability to execute. 59:58 But one thing that is, you know, critical to the entire process is that CMC will require, you know, bonding of that manufacturing. Agreement. 1:00:06 Speaker 1 I'm so glad you touched on this. Yeah, this is. 1:00:08 Speaker 2 Critical to ensure that like I had mentioned, the manufacturer will be able to execute on it. And if they if something happens through this process and they could not execute on it, that that you have this policy in place or the surety bond in place to allow the, you know, the developer and the lender to, to pivot and find a new manufacturer to perform based on the requirements of the. 1:00:34 Speaker 1 Project. So I'm so glad you brought up 30s and bonding. It's another form of insurance, AKA it is, right, it's just insurance, but it's very specific. I think there are at least I know there are three distinct types of surety bonds that cover different parties and it's a 3 and it's a three party thing. 1:00:51 It's the lender, it's the owner and then the the supplier, right? And so again, this is just a specialized insurance policy for a really specific set of time on a specific scope of work. But, and correct me if I'm wrong, Jimmy, but right now the market that places the surety bonds is spooked because there's been so many defaults. 1:01:13 And so am I right that it's becoming very difficult to get surety bonds on projects right now? It is. 1:01:22 Speaker 2 You know, just like the, the, the financing landscape, it comes back to, you know, experience, resources, financial capacity. And the same goes for, you know, surety bonds on the manufacturer side, right? 1:01:37 You know, these groups, you know, yes, you know, maybe bonding is available within the industry, but you know, those people that are supporting, you know, those bonds are putting those bonds in place. Want to make sure that whoever you know they're they're you know, they're they're essentially getting in bed with, you know, can perform based on the obligations of you know, the the contract. 1:02:01 Speaker 1 Yeah. Well, again, it's about risk. Yeah, Yeah. 1:02:05 Navigating the Evolving Landscape of Offsite Construction Financing I think there's more to unpack there, but I, we, we should, we should wrap it up shortly. You know, I bet learning so much about this and just eating, breathing and sleeping all the different, looking through all the different lenses and talking to so many people lately, it's been really, really fun. 1:02:23 And I, I, I'm starting to see what the pathways through this are. And so I want to, I want to have one sort of positive note here to end on and keep people some guidance, which is that if you want to utilize offsite construction or prefabrication in your development project or even on a residential scale too, you just, you absolutely have to explore it at the very beginning of, of your project and make a decision. 1:02:50 You cannot flip flop. I think it's possible to, to, to, to change your mind part way through and, and then say, you know what, we want to turn, turn to pivot to prefabrication. But there's so much infrastructure and, and groundwork that you need to lay to get through this unscathed and make sure you have all the right policies in place, that many, many layers of insurance policies, all the funding is aligned and, and, and it's complex. 1:03:15 And so, you know, even coming back to the surety bonding like that, the whole idea behind CHC's new prefab program is to sort of address that, which is that right now the private market is, is trying to manage that risk and CMC is stepping up and saying we'll help lenders manage that risk when components are off site. 1:03:34 And you know, we're, we do something called the scope governance. Um, shoot, I should really know this off top my head. What do we call this? But basically, um, we're, we're, we're managing the very specific scope of work underneath the timeline. 1:03:53 And so loin is the acronym level of information need, which is what component is getting done to what level of detail and at what point in the progress project. And that very specific set of information is the scope governance model that we we're trying to package that in a really formal way that will help enable the lenders underwriting and decision making and evaluation of a project to be a tool for them to say, hey, this, that info at this given time at that level of detail is sufficient for enough for us to take the quote UN quote risk and lend it to this project. 1:04:30 And so I think that, that's going to, I think what that will do is it will make it way easier for the underwriters to do their job when the developer is prepared and they know what they're talking about and they actually understand what components it is that they're utilizing and how that enables their project to be more efficient and what impact does it have on the funding. 1:04:49 So it's not, if you just go to them and say, well, we're like roughly 15% of our project and, and it's going to be all done off site. It's going to take about 6 months. And it can't be done like that. It's going to be no, this is the exact schedule from the manufacturer and, and we can say at any given day, plus or minus a few percentages, what, what part of the project has been completed and, and, and where is that going in the building. 1:05:13 And so it may be the case where it's more efficient to do all the wall panel manufacturing. But instead what we'll do is we'll have the manufacturer do all of the level 1 components, all the walls, then all the floors, because that just helps everybody manage risk on a more incremental scale. 1:05:30 And so I think that this is going to be evolving over time. And you know, this is a bit of a shameless plug. We didn't get into this side of the business because of any reason other than I saw the issue and wanted to address it because I lived the pain as the manufacturer downstream. 1:05:46 And you know, we're not going to get through this with surety bonding like that's just not not going to the runway on that is I think too short and too difficult. And so we need all of these different tools, the CMHC program. And so those are those are the things that are on my mind that we're trying to to solve from our end anyways right now. 1:06:03 So. 1:06:04 Speaker 2 No, exactly. And I think at the end of the day is having more options available just creates more opportunities. 1:06:11 Speaker 1 Hmm. Yeah, Yeah, maybe what we need to do is just start a prefab, Mick. All we do is fund off-site construction components and. 1:06:21 Speaker 2 There you go, that's an idea. 1:06:23 Speaker 1 Yeah something like that anyways, this has been super, super fun. I could do this honestly all day. So thanks for taking the time and bringing your expertise. Is there? I, I found that in my last few conversations. We, we'll wrap up the podcast and then I'll have a fantastic 15 minute rant with the guest after we stop recording. 1:06:42 So I, so I want to give you the opportunity to whatever else, what other cars do you want to lay on the table before we wrap up, if anything? 1:06:50 Speaker 2 You know, at the end of the day, I would just say that, you know, the, the world is evolving quickly. We, you know, we've seen it the, you know, the last few years and you know, I know there's a lot of conversations around AI and, you know, I think that, you know, maybe that will start to play into, you know, the development world in the coming months or the coming years. 1:07:12 But at the end of the day, I think it's just, you know, let's continue to be innovative, you know, however that looks and let's try from a, you know, financing and policy standpoint to to support these new innovations as quickly as we can. 1:07:26 Speaker 1 Awesome. Yeah, I think that's great advice, Jimmy. Where can people get a hold of you and what kind of work can you help them? 1:07:34 Speaker 2 With yeah, I mean, I help facilitate any commercial real estate financing, so whether that's construction or term of apartment buildings as well as, you know, any other asset class and you know the best place to find usisgreenberg.ca. 1:07:51 Speaker 1 Super. OK. Well, thanks again for the time. This has been a real pleasure. This is the MC podcast where we're just doing our very best to help the industry navigate their way through what is an ever evolving and complex process. 1:08:06 But, you know, collectively, we will get there and we'll keep building the right thing at the current time. So good luck to everyone out there. And if you think there's a way that we can help you, please reach out and let us know. Thanks for listening. I'm Jeremy, your host, and this has been the MC podcast Chao.