Canadian developers flex financial muscle. Olympia & York has projects in Toronto, New York, worldwide
Olympia & York Developments Ltd. is the largest property developer in North America, and the Reichmann family who own it are the richest people in Canada. The latest figures on who owns what in Canada came out this year in the Financial Post magazine. The Reichmanns are No. 1, with an estimated net worth of $6.3 billion (Canadian; US$4.9 billion), according to the magazine. Lord Thomson of Fleet is No. 2, at $5 billion. Others say that the Reichmanns are worth more but that since Olympia & York is a private company, no one knows for sure.
The Reichmanns' worth is of more interest these days as Olympia & York embarks on new real estate developments in Canada and prepares to open a complex of office buildings in New York that will contain the headquarters of some of the largest financial service companies in the United States.
For example, Olympia & York is planning a new office tower in Toronto's downtown core. It is a 30-story building on the site of the old North American Life Insurance Building, beside the Toronto Stock Exchange. The North American building has been emptied of tenants and is ready for demolition.
In New York, the World Financial Center is almost complete. The 8 million-square-foot project includes seven buildings in lower Manhattan which will be headquarters for American Express and Merrill Lynch, among others. Olympia & York says 90 percent of the World Financial Center's office space was leased before any of the buildings opened. The project took seven years to build, at a cost of US$2 billion.
Olympia & York's largest Canadian property is First Canadian Place, which serves as the company's head office and is also headquarters of the Bank of Montreal. The development also includes the Toronto Stock Exchange. Like many other downtown Canadian developments, First Canadian Place has underground shopping malls on the lower floors; here, it's three acres of enclosed public space and walkways and 300,000 square feet of retail and restaurant space.
Other recent Toronto property developments incude Queen's Terminal, an old grain elevator converted into offices and apartment buildings. The luxury condominiums overlooking Lake Ontario are among the most expensive in Toronto. The property, designed by Zelder Roberts, was named the Best Building in the British Commonwealth in 1984.
But while the company and the family operate from a Toronto base, many of their biggest deals have been outside this country.
Olympia & York's great coup was buying Manhattan real estate when everyone else was selling during New York's debt crisis of the mid-1970s. In New York City today the company owns and manages 24 million square feet of space. An additional 10 million square feet of space is under development in New York; San Francisco; Boston; Toronto; and Calgary, Alberta.
Olympia & York's worldwide client list includes Saloman Brothers, Citibank, Dow Jones, Morgan Stanley, and Daiwa Securities. All these and dozens more all rent office space from Olympia & York.
Another of Olympia & York's ambitious projects is Canary Wharf in London's Docklands. Eventually, it will include 22 buildings and 12 million square feet of space on 71 acres. Work began in November of last year and won't be completed until 1997. The estimated cost of the project runs from $6.5 billion to $8.7 billion.
Office buildings and other properties are the foundation of the Reichmanns' and Olympia & York's wealth. The Reichmanns are recent immigrants to Canada, arriving in the 1950s from North Africa. They are very private and almost never give interviews. When a local magazine - Toronto Life - did a family profile late last year, the Reichmanns did not cooperate. They sued the magazine, editors, reporters, and others for $102 million. In Toronto the Reichmanns do not flaunt their wealth and live a quiet, conservative existence in modest style.
Olympia & York continues to expand its property empire in North America. In addition, many of its stock holdings and passive investments are in real estate and assets related to real estate, such as oil and gas properties and the tens of thousand of acres of forest needed to churn out newsprint. Analysts in Toronto say almost all decisions in the company are made by Paul and Albert Reichmann, the brothers who run the firm.