It was 1989 and he’d just dropped out of McGill University, opting to run a toilet paper and cleaning supplies distribution company full-time rather than expose himself to the rigours of English literature and Psychology 101. But what he really wanted to do was build houses, and a family friend offered him the chance to learn the trade from the ground up if he was willing to volunteer as a labourer.
“I worked three months for free and then made $325 a month for three months,” says Mr. Freed, the president of Freed Developments Corp. “It was the only way they would hire me.”
He wasn’t even allowed to swing a hammer, but he now rules over a development empire that employs 600 people and has built almost a billion dollars worth of condos in the now-trendy King West neighbourhood. And there’s more to come – late last month, the Ontario Municipal Board ruled he could build ever higher in the area, granting developers permission to complete projects almost 60 per cent higher than originally permitted in the official plan.
They may be the backbone of his expanding empire, but as Mr. Freed sits in the bar of the Thompson Hotel, he’s quick to point out he’s moved beyond the staid condo market – Freed Developments is a part owner of the Thompson Hotel, five restaurants, almost 1,000 parking spaces and a Muskoka golf course that has a large residential component.
With another billion dollars of projects in the planning phase, he’s changing his focus from being a neighbourhood condo developer into growing what he likes to refer to as “Canada’s first diversified lifestyle company.” He imagines a world where his condo owners go for dinner in his restaurants, drink in his bars and buy memberships to his golf club.
“This has gone so far beyond what anyone could have envisioned,” says Mr. Freed, casually dressed, as he often is, in jeans and a sports jacket. “You just don’t see other companies that are able to offer such a range of lifestyle choices. I’m certainly not aware of any. But that’s what this is all about.”
From backyard forts to condo towers
Hazel Freed often tells the story of how her young son would boss around other kids in the backyard, getting them to build him an awesome fort while he supervised. With a real-estate lawyer for a father and a comfortable childhood spent in Forest Hill, Mr. Freed didn’t bother much with school, preferring to spend his time playing hockey with his friends and chatting up the girls.
“I wasn’t a bad kid,” he says. “But I always liked having a lot of fun, and school was a means to an end. I got the grades I needed, but it was more of a social platform for me.”
The 42-year-old hasn’t changed much since. He runs a company that generates hundreds of millions of dollars in revenue, but he isn’t often seen in a suit. He’s a regular fixture at the bars he owns, and as he sits down to dinner at the Scarpetta restaurant in the Thompson Hotel, it’s clear that he can work his way around a wine list.
His party schedule is down to a few nights a week, and he increasingly finds himself detached from the demographic he’s targeted since focusing on King West – it’s difficult to keep up with the young, wealthy Bay Street types he depends on to earn a living.
And there are plenty of opportunities – the Thompson Hotel has become a late-night hot spot since opening last year. Its rooftop patio is the most exclusive in the city, and celebrities such as Drake and Richard Branson are frequently spotted sipping cocktails in the lounge among the well-dressed twentysomethings out for a good time.
“I’ll tell you, there are plenty of nights I’m happy to be at home and in bed by 8 p.m. With this type of business you could be out every night, all night, if you wanted to,” he says, adding his one-year-old son with wife Lindsay has also changed his priorities. “You need to be careful not to get too caught up in all of that. Those days are mostly over for me.”
A costly learning curve
After his six-month stint cleaning job sites in the early 1990s, Mr. Freed went to work for a developer who was building 100 houses in Markham. He acted as site supervisor during the week, using what he had learned as a labourer for guidance. On weekends, he’d work in the site trailer selling the houses to any customers who happened to drop into the centre.
Ready to strike out on his own, he started assembling land in North York and Brampton, and used a connection to win an introduction to the well-connected Goldhar family, whose name is now synonymous with the big-box development company SmartCentres Inc. Mr. Freed would put deals together for custom-built homes, and Leo Goldhar would provide the financing needed to start construction. Together, they’d build about 1,000 homes over five years.
“I went out and found the deals, managed them, got zoning approvals in place and they’d bring in the financing,” he says. “I brought opportunities to them, and of course they are opportunistic. They liked me, so they cut me a break.”
Growing in confidence, he made what would turn out to be the biggest mistake of his young career when he raised $3-million from investors to open a warehouse store called Builders Unlimited in 1997. He brashly predicted it would render Home Depot obsolete with its “taste-educated, install-it-please niche,” but a lack of financing drove the store out of business shortly after it opened.
“The store was basically in business for three minutes,” he says. “It’s fair to say it did not work out as planned. But I did learn a pretty valuable lesson about the importance of proper financing, you can definitely say that much.”
Ambition, meet humility
Builders Unlimited was the kind of rash mistake that Stephen Pustil saw coming when he agreed to allow Mr. Freed to clean his job site all those years ago. Mr. Pustil, president of Penwest Development Corp. and a long-time developer, knew Mr. Freed as a friend of his son’s and has served as his mentor over the last two decades.
“Any of his failures have been because he’s so ambitious,” says Mr. Pustil. “He’s always been very impatient, trying to get to the next level as fast as he could. I’ve always been about pulling on his reins – allowing his entrepreneurial spirit to grow but making sure he did it all within the confines of reality.”
One of the key lessons Mr. Freed has taken from Mr. Pustil is to partner on the projects that he doesn’t understand completely. That’s how he met Tony Cohen, a partner in the ultra-trendy Hotel Le Germain, who Mr. Freed recruited to help him bring the Thompson Hotel to Wellington Street West.
“It’s actually one of the things that I like best about Peter – he knows what he doesn’t know,” says Mr. Cohen. “Maybe in the past he thought he knew everything, I have no idea. But I can tell you now, if you can make an argument about something, he’s willing to listen.”
The department-store failure may have been an embarrassment, but it did nothing to derail his ambition. He’d been visiting King Street bars since the mid-1980s, and was growing more and more convinced with each visit that the area – which, after decades of industrial use, was rezoned to allow for more residential growth – was ripe for redevelopment.
In 2003, he bought a site and began to develop what is now 66 Portland St. – a nine-floor, 85-unit condo that was completed in 2006. He’s launched eight more since, finding a target market among the city’s young, moneyed crowd anxious to live close to the core and in the middle of a burgeoning entertainment district.
“I spent a lot of time down there on the weekends visiting the bars,” Mr. Freed says. “It was a really rough area, everybody knows that. But I thought if we could do one building, even if it was risky, we’d know if we were right. But every year that has gone by, we’ve been proven more right.”
That said, he cares less about being right than he did when he started his career.
He developed testicular cancer when he was 30, and a little over a decade in remission hasn’t dulled the memories of six months of chemotherapy. As he prepares to announce a slate of new projects – he hints broadly that he’d like to package his income-generating properties into a separate company – he often reminds himself that there are other things in life that you can’t control.
“It really does teach you not to fret the small stuff,” he says. “You reflect back on any of the bad things that have happened or will happen, and all you can think is ‘You know, life really isn’t all that bad.’”