Rising to meet challenges of short supply

As the pandemic of 2020 swept the globe, countries closed their borders and focused their efforts on protecting their citizens from the virus known as COVID-19. The change was swift and sudden and caused countries such as Canada to rethink the way they access products and services beyond their borders.

Shane Baghai, founder of Baghai Development Limited, describes it as a “lesson in crisis management.”

Known as a leader in luxury residence development in the Toronto area for more than 40 years, Baghai remembers the economic downturn of the 1990s.

“At that time, I tried to learn everything I could about finance. When you are faced with major change, there is so much to be learned,” Baghai says. It is this philosophy that has guided Baghai and his team through a host of challenges facing the construction industry over the past year.

As countries closed their borders and focused on protecting their citizens from the deadly virus, shipments of such products as air conditioning units and furnaces made in the United States and marble from Italy came to a standstill.

According to Canadian Forest Industries, sawmills and lumber resellers across North America were poised for a year of high-volume sales and high prices in 2020. When the pandemic hit last March, the momentum of lumber manufacturing, sales, and prices plummeted as confusion erupted around lockdowns, and workplaces grappled with new requirements for social distancing and other health measures.

At the same time, the demand for lumber supply for building projects not only continued but surged to unheard of levels over late spring and early summer. The resulting sustained rush of lumber buying caught sawmills and wholesalers by surprise, which then pushed prices up to never-before-seen heights.

Dave Wilkes, president and chief executive officer for the Building Industry and Land Development Association, has been watching the supply shortage closely and notes that, while lumber supply has had a significant impact on low-rise building, condominiums rely more heavily on concrete and steel. The real impact for high-end developers has been the availability of unique finishes that buyers want in their luxury home and additional health and safety precautions introduced at the work site.

“The Ontario government designated some construction sites as essential early on in the process and it was a responsibility that was taken very seriously by developers and their teams,” Wilkes says.

“It’s been very impressive to see so much creative thought invested in protecting workers and keeping potential buyers safe. Many have introduced check-in points at their sites for contact tracing and volunteered to conduct rapid testing for their staff. They have also paid attention to public health guidelines for their sales offices. As advocates and educators for the industry, our organization was integral to helping relay that information to developers from government and collecting feedback from developers for government throughout the pandemic”

Baghai says he sees the many challenges of 2020 and early 2021 as an opportunity for his company to learn and grow. As a self-professed lifelong learner, Baghai has studied the lifestyles and behaviours of buyers and the luxury real estate industry for more than 45 years. “Life is all about challenges. To come out of it victoriously you have to embrace the change and deal with it.”

Baghai Homes has done just that with the construction of Leaside Manors, a gem located at 3 Southvale Dr. in the heart of Leaside. While using his knowledge of supply chains and his many relationships with suppliers worldwide to work through the supply challenges, Baghai also paid careful attention to the health of his team.

“For me it has been about the care and safety of our workers and I am pleased to say there have been no cases of COVID in my building,” Baghai says.

Wilkes says he is proud of the industry for its commitment to safe worksites throughout the pandemic. “Results of their efforts paid off with only 1 per cent of all Workplace Safety and Insurance Board (WSIB) COVID-related claims coming from construction sites in the GTA. That is a huge accomplishment and one the industry should be proud of.”

While uncertainty related to the pandemic continues to be a reality, condominium sales have picked up, according to the Building Industry and Land Development Association, with January and February 2021 sales in the Greater Toronto Area returning to traditional 10-year levels.

Wilkes says the challenge now is to meet the growing need for housing.

“The demand for new homes in the GTA continues to be strong. Bringing enough homes to market continues to be a challenge for our industry, given the impacts of the pandemic,” Wilkes says. “We all need to work together to ensure we can deliver homes to the GTA families that are waiting for them.”

Leaside Manors has only a few suites available left. “The location is great … it’s such a dynamic environment. I wish we had more!” Baghai says.

Advertising feature produced by Globe Content Studio. The Globe’s editorial department was not involved.