Entrepreneur: Steve Gupta
This article originally appeared in the Financial Post.
In 1971, 20-year-old Steve Gupta landed in Toronto from his native India. He had $108 in his pockets, a BSc. and an absolute passion for hard work. Canada, he says was his land of opportunity. It was a place he had dreamed of for years.
He moved into a series of rooming houses along Bathurst Street and Bloor Street West. The rent was cheap, just $10 a week, and so were the houses. They sold for about $16,000, he recalls.
It was not long before he began buying and selling them.
While his friends spend evening watching television or going to movies, he took a pass in favour of work. He took factory jobs and went off on his own as an insurance agent and prudently tucked away his money. When he had enough for a modest down payment, he started buying and selling real estate, starting with single-family homes and slowly expanding to apartment buildings.
Buy, flip and roll the profits into the next deal. The deals go bigger; Steve Gupta became more sophisticated. Steve Gupta became rich.
Today, his companies, gathered under the banner of The Easton’s Group, have total assets in the $350-million range. Thanks to an ambitious expansion program, next year they will likely top $500-million.
The group now has seven hotels in southern Ontario with another eight underway. It owns four restaurants and leases another three. It operates the largest service station in Canada at Highways 401 and 28 east of Toronto and still owns several hundred apartment units in the greater Toronto area, a business Easton is slowly moving out of.
Today, his companies, gathered under the banner of The Easton’s Group, have total assets in the $350-million range. Thanks to an ambitious expansion program, next year they will likely top $500-million.
“Too much government interference; too many regulations,” Mr. Gupta says. “It is hard to manage them properly because of things like rent controls. There are far better opportunities for us today.”
Those opportunities are mainly in hotels, he says. Granted, Mr. Gupta still has those restaurants, but three of them are situated in that giant service station: It has 18 filling stations, a Harvey’s, Swiss Chalet and Tim Horton’s. He owns another Swiss Chalet in Cobourg. Then there are the three restaurants he leases: a Kelsey’s in Peterborough, a Casey’s in downtown Toronto and a Tim Horton’s in Port Hope.
“They are great businesses but there are only so many hours in a day and so many resources to devote,” he says. At the same time, he points out all of his new hotels will have restaurants and they are an integral part of what Easton’s still does.
The hotel expansion program is ambitious indeed. Mr. Gupta has hotels under brand names such as Comfort Inn, Hilton and Marriott in Toronto, Peterborough, Brampton and Vaughan, but will add to them – town in downtown Toronto, two near Toronto’s Pearson International Airport, one in Mississauga, one in Markham and one in Kingston.
All will be mid- and upper-mid range hotels because that is where he sees the market heading.
“I have always been a long-term thinker,” he says. “Even with my first hotels. In the 1980s, often driven by the tax-shelter aspects, people were building low-end properties with very few amenities. When the market shifted, you could not do anything with them.”
“We always built with an eye toward adding to and improving the properties as the market changed.”
Toronto and other southern Ontario cities are ripe for upper and mid-range hotels, he says: hotels with suites instead of rooms and kitchens instead of around-the-clock room service. He has two underway in Toronto – a 256-suite Marriott near the CN Tower and a 224-room Hilton in the city’s entertainment district west of University Avenue.
“We always built with an eye toward adding to and improving the properties as the market changed.”
“No one is building mid-range downtown. You either have dumps or high-end properties. Toronto needs that range of choice; it is now established as an international city,” he says.
Occupancy rates across his properties bear this out. In downtown Toronto, they run 72%; other areas range from 65% to 75%.
“Anything in the 70% range means you are in good shape,” he says.
Mr. Gupta has been a quiet force in Toronto since the early 1980s, when he and a group of partners picked up 2,500 apartment units formerly owned by Fidelity Trust. A few years later, again with partners, he added another 5,700 suites when the provincial government forced the sale of real estate holdings acquired by Lenny Rosenberg, Bill Player and Andrew Markle from Cadillac Fairview.
Toward the end of the decade, he moved sideways into hotels. His first was a hotel in Port Hope in 1988, not far from the service stations that he acquired in 1979.
The service station, he says, was a bit of an anomaly.
” I looked at the figures, saw a chance to expand, saw the volume of traffic steadily rising and it all made sense as a long-term investment,” he says. “So I bought it and it is now one of the biggest in Canada.”
The Port Hope hotel was followed by a Comfort Inn in Peterborough in 1992, In 1997, he turned heads by acquiring the former RCMP building on Jarvis Street in downtown Toronto, an area more associated with red lights than quality hotels.
“People thought I was crazy, but I could see the way the city was reshaping itself,” he says. “This was a site right next to the heart of downtown.”
That vision, combined with proven management skills, has won him a wall full of awards including Ernst & Young’s Entrepreneur of the Year award in the hotels category.
Easton’s Group is very much a family affair, he says. Two of his three daughters either have or do work with him, both have business degrees. He son, the youngest of his children, is planning to attend law school before finding a future working alongside his dad.
Just 56, he sees decades of excitement and growth for Easton’s Group.
“That is what I love about Canada,” he says. “Work hard and work smart and you can do almost anything.”