The owner and manager of more than 15,598 rental apartment suites in Western Canada, Mainstreet Equity Corp. is not your average landlord. Nor is it your average real estate company. Rather Mainstreet, led by founder, president and CEO Bob Dhillon, is an altogether unique enterprise, one that has disrupted the real estate industry and carved out its own brand of radical social entrepreneurship. It’s a strategy that leaves both tenants and investors quite happy.
Need proof? Since inception in 1997, Mainstreet has enjoyed double-digit, organic, non-dilutive growth year-over-year. For 22 years. This past March 18, the stock hit an all-time high of $153 on the Toronto Stock Exchange.
“We are not a REIT,” says Dhillon proudly from Mainstreet’s head office in downtown Calgary. “We are an add-value creator. We take all our cashflow and reinvest it into our buildings. We create quality, affordable living while making lots of money for our shareholders. The product that we represent – mid-market apartment buildings – all need tender, loving care, which we give them. We improve the life of middle-class Canadians while making double-digit returns. It is unique.”
Mainstreet has implemented the model in apartment buildings from Vancouver Island to Winnipeg, the majority of which are in Alberta. “Eighty per cent of the product in the apartment building space are smaller buildings,” Dhillon explains. “And it’s where the majority of the workforce lives, including the tech workers. Our focus is on Millennials and Gen Z in the inner city.”
In Calgary’s inner city, for example, Mainstreet owns 73 locations (3,229 total units); in Edmonton’s ICE District and throughout the city it has 5,386 total units across 150 locations.
Middle-class Canadians, Dhillon notes, pay an average of $1,000 in rent. They comprise 50 per cent of working Canadians (or 70 per cent of the entire population) and make less than $50,000 per year. “So I’m focused on improving the life of that 50 to 70 per cent of Canadians,” he says. “And how do we do that? By renovating these buildings to a certain spec that is non-existent.”
Suites are renovated to match a company-specified model, which incorporates modern designs and open layouts. Renovations include upgraded flooring, kitchen counters, cabinetry, energy-efficient appliances, bathrooms, window coverings and LED lighting.
“The secret sauce of the apartment building or multi-family business is that it trades below replacement cost,” Dhillon reveals. “This is very important. If you build a brand new apartment building, it’ll cost you $400,000 to $500,000 per door to build. But you can buy them all day long for significantly less, at let’s say $150,000 to $160,000. So that allows you to get more supply until rents go up considerably. That’s the secret sauce to our business.”
There is a limited supply of apartment buildings, he adds, with local demand increasing from immigration, foreign students, interprovincial migration and local population growth, such that a supply/demand imbalance exists. Additional units won’t be produced until rents go up considerably.
Dhillon, who was born in Japan and grew up in Calgary, has spent his entire working career in real estate. “It’s the only job I ever had – flipping, wheeling and dealing, owning real estate from a very young age,” he reflects. “I saw this neglected segment of the market – improving and repositioning assets to make a sustainable profit – to be a social entrepreneur. Make a sustainable profit and reinvest it to compound the quality of life of middle class Canadians.”
After completing his MBA at the Ivey School of Business at the University of Western Ontario in 1998, Dhillon devoted himself to Mainstreet. “I didn’t have a rich daddy or a social network,” he recalls. “I came from the hood. I went through the school of hard knocks and created this model. And it was through trial and error and years of cycles: the 2004 oil boom, 2009 financial crisis, 2015 oil price crash, COVID pandemic. We’ve seen it all and at every turn we learn.”
“And I think the next cycle is going to be the greatest cycle in Alberta,” he predicts with a smile.
A huge proponent of his hometown, Dhillon is bullish on Calgary’s future. He acknowledges the rough patch we’ve gone through – from the economy, COVID – over the last seven years, but that Mainstreet nonetheless flourished the entire time. “Because of our capital structure, our systems, our management team,” he says. “But the key thing was not Mainstreet – it was Calgary. This city’s a great place.”
His company was counter-cyclical, Dhillon explains, doubling down on Calgary at a time when many considered it a no-fly zone: “And finally now, Alberta is being recognized. Oil is not disappearing. The population is growing, the economy is diversifying. Energy is security. Agriculture is security. We have the youngest population, the most educated population, the best quality of life. And most of all, we’ve got affordability, which the rest of the big centres in Ontario and B.C. don’t have.”
Crucially, he says, Calgary has great people. “One of the most unique things about Calgary is the lack of a glass ceiling,” he points out. “It’s not about who your father is or which private school you went to. Here you can have access to everybody and anybody. Because of this open culture and the ability to create entrepreneurs.”
Today, Mainstreet has over 450 full-time team members, plus a couple hundred contract workers. The company is vertically integrated and encompasses an operating platform, quality control, human resources, supply chain logistics, software and the Dhillon School of Business at the University of Lethbridge in Calgary.
“We developed a supply chain logistics software system, from factory direct in Asia to warehouse, which manages our operating platform,” he explains. “We also have a school that trains people right out of college and university into our management system. We train them and work them through a co-op program. We also have a co-op program with the Dhillon School of Business.”
In 2018, Dhillon made a $10 million donation to the University of Lethbridge – the largest in the institution’s history. It was, as Dhillon described then, a way to give back to the greatest country in the world. The School of Business was named in his honour.
Reflecting Dhillon’s open and accessible style, Mainstreet is a flat organization, inclusive and without hierarchy. “We symbolically only have glass doors and walls, for full transparency, so everybody has access to anybody,” he says. “For example, our VP Operation started out at the lowest operational position 20 years ago. We take people from the ground up, from our school and they go into senior positions. We don’t give them a job, we give them a career. Nobody’s a CEO and nobody’s a cleaner. We’re all equals. We are all transparent. And the greatest ideas come from the bottom.”
Dhillon also touts Mainstreet as being the most inclusive company in Canada: “Before inclusivity was a popular buzzword, and not because I’m a brown CEO, but because it’s something I believe passionately in. From religion, colour, LGBTQ+. We have badges and stickers showing a rainbow in every building we own. They represent inclusivity and a flat playing field.”
And while he has built Mainstreet to be a social entrepreneurial enterprise, Dhillon personally, is a social entrepreneur too. He has been a board member of the Canada Mortgage and Housing Corporation (CMHC) since 2015, a member of Premier Jason Kenney’s Alberta Economic Recovery Council since 2020, a board member of Invest Alberta since 2020, and on the Advisory Council for the Canada-India Business Council since 2021.
“One of my greatest passions is giving back,” he reflects. “I’m a global guy – so it’s a great opportunity to give an out-of-the-box global perspective.”
In addition to his historical donation to the University of Lethbridge, he donated $10,000 towards the creation of Sikh Studies Program at the University of Calgary (2021), apartments to refugees from Syria and Afghanistan (2019), established a $10,000 business studies scholarship for Lakehead University (2017), and donated apartments to victims of the Fort McMurray (2016) and Slave Lake (2011) wildfires. In March, the company did the same again when it began housing refugees from the ongoing war in Ukraine.
Dhillon, a cancer survivor, is currently also developing 3,000 acres in Belize, intended to demonstrate a model of environmentally-friendly destination tourism to investors.
In recognition of his many accomplishments, he was named an Officer of the Order of Canada in 2021 and received the Queen’s Diamond Jubilee Medal from the Governor General of Canada in 2012, among many other awards and recognitions.
Looking forward, Dhillon will continue to grow Mainstreet, particularly in Calgary. “We’re at a crossroads. With in-migration and post-COVID population growth, our products are going to fill. Rents will show great returns for our investors. And we’ll continue to grow this portfolio because we believe in Western Canada and Calgary. Particularly in the inner city.”
“Calgary has the greatest inner city,” he continues. “Bridgeland, Sunnyside, East Village, Inglewood, 17th Avenue, First Street, Mission. Look at all our little inner city pockets. They’re all amazing. The only thing missing is another 100,000 people to make it thrive. And they’re coming now. We’ve built it, and they’re coming.”
Disrupter. Radical social entrepreneur. Community leader. Dhillon and Mainstreet have earned many good descriptions over the course of 22 years. With an inextinguishable passion for what he does and for where he does it, Dhillon will add much to his, Mainstreet’s and Calgary’s reputation in the future.