Jason Kraatz, the Calgary-based CFO of real estate conglomerate Hopewell Group of Companies, knows all about his industry’s not-so-stellar reputation. “Real estate is a transaction-based industry; the truth is, lots of people out there are cutthroat negotiators trying to squeeze every last penny out of any given deal,” he says.
At Hopewell, a regular penny just won’t do. Each of Hopewell’s five companies—that’s Hopewell Residential, Development, Logistics (distribution and warehousing), Real Estate Services and Capital Corp. (the strategic hub of all the rest)—operates according to a series of values (adaptation, leadership, relationships and teamwork) that all come together into one core concept management refers to as “Happy Money.”
“Happy Money is about shared success, within companies and between clients,” says Kraatz. “It’s the way in which we make decisions.” Because Hopewell is privately owned, it can be more patient than many of its publicly traded competitors in pursuing its objectives; as Kraatz puts it, “we prioritize repeat clients and long-term success over short-term, bottom-line victories.” And while Happy Money is perhaps a little less ample than regular money, pursuing it has helped Hopewell thrive.
Headquartered in Calgary, Hopewell began in 1991 as the single operating company of Sanders Lee, a Hong Kong–born businessman who now sits as executive chairman. These days, annual revenue exceeds $300 million; 300 people are employed over five divisions across Canada. “They’re all tied together strategically but operate autonomously,” says Kraatz.
Working together, Hopewell’s many factions can easily move a project from inception to completion. “We buy a piece of land and then build multi-family condos or rental units of single homes,” explains Kraatz. “If it needs coffee shops and shopping centres, we can do that too. We’re fully integrated to add everything that little node needs.”
Pushback to land development is often inevitable in real estate, but Hopewell works hard with communities and municipalities to build places people both want to live in and can afford. A current success story is Mahogany, the 1,000-plus-acre community in southeast Calgary set around the city’s largest freshwater lake. Mahogany is swank but not snooty (to accommodate the community it serves), and prices have remained stable despite Alberta’s otherwise tumultuous real estate economy. More than 10% of new homes sold in Calgary are in the development, which nabbed 2014’s Canadian Community of the Year award from the Canadian Home Builders’ Association.
“We’re not building custom homes or penthouses—we’re in the first-time homebuilders’ market, and we’ll always compete on value,” says Kraatz. In so doing, Hopewell is working to change people’s opinions of real estate development as home prices surge in many Canadian cities. “There are really two ways to look at any development,” he says. “The first is, ‘How much money can we make?’ But the second is, ‘How can we build places that people want to be?’” Hopewell shoots for the latter—happily.