TORONTO — As the newly appointed president and Chief Pensions Officer at Ontario Municipal Employment Retirement Systems (OMERS), Blake Hutcheson is no stranger to the hotel-investment world. The former president of Oxford Properties got his start at brokerage CB Richard Ellis and CIBC before moving to Oxford, a company with 2,000 employees and $50 billion of assets under management, including a stable of Fairmont Hotels & Resorts. Today, with more than $100 billion worth of equity invested globally, OMERS has employees in Toronto, across North America, the U.K., Europe, Asia and Australia.
Growing up in Huntsville, Ont., Hutcheson said “from the time I was six or seven, I was on development side,” pointing out that his father owned a lumber company and he helped on various fronts from a young age. At 23, Hutcheson and his family bought the Huntsville Courthouse, a project, he says, taught him about financing. “The project cost $1.1 million but we were eligible for financing of $1.3 million. I’ve never seen a deal like that since,” he quipped to journalist Bruce Sellery as part of a one-on-one interview at this year’s Canadian Hotel Investment Conference (CHIC) held April 24 at the Sheraton Centre Hotel in Toronto, where the charismatic leader talked about his business approach, future growth and market concerns.
Though Hutcheson is involved in myriad aspects of the job, he says he’s “most proud of our people,” adding there are two kinds of people — basement people and elevator people. I always look for attitude when I’m hiring. I’ll take a great attitude over brilliance any time.”
In terms of foreign investment, Hutcheson says he occasionally has to pass on some deals and city locations. For example, while he approved development in Berlin, he felt compelled to pass on opportunities in Chicago. “There are some cities that work for development because of a host of reasons,” he stated, explaining a city such as “Boston boasts thought leaders, educational institutes and technology; Washington is the political capital and has a need for office space, while when it comes to New York,” he said, “everyone wants to be there.” The company has also opted to develop in cities such as San Francisco and L.A. but Chicago didn’t hold any interest for the company.
While OMERS is diversified in its holdings, Hutcheson says “Hotels have been great to us.” The company’s portfolio of hotel assets is in excess of $2.5 billion and includes Hyatt, InterContinental and Fairmont Hotels, which OMERS purchased 12 years ago. “We did overpay but our strategy was right,” said Hutcheson, referring to the Fairmont assets, adding “the assets were tops in Canada. Fast forward to today, and we’re really comfortable with those assets.”
Asked to comment on the possibility of a casino being built in Toronto, as part of a proposed expansion of the Metro Toronto Convention Centre, on Front St. W., Hutcheson said he doubts it will come to fruition. “I wasn’t keen to see a casino but if there was to be one, it should be there,” he said. “Today, I highly doubt that will keep up.”
As about his feelings about the current state of the economic cycle, Hutcheson says “it’s important to remember the great lessons of cycles. Believe in the fundamentals and take the long view,” said the OMERS CEO, reiterating the lessons learned from his grandfather, who also happened to be his mentor. “You have to have the courage in down times when it looks bleak. Canada is steady as it goes right now.” But he advised hoteliers “be on your toes for new disruptors.”