DCR/Phoenix Group of Companies
With support from his father’s family trust, Cuckoo Kochar founded the DCR/Phoenix Group of Companies, a comprehensive land development and residential home building operation. Kochar had many years of experience in the business to prepare him for owning such a group. Kochar began his career 38 years ago as a land development engineer in Montreal. He later became the manager of the Canada Mortgage and Housing Corporation’s Land Division. “It was a great honor to serve the people of Canada. It’s also where I learned a lot about the development and financing of projects,” Kochar says.
Then, in 1988, Kochar founded DCR/Phoenix and became its president and CEO. “It primarily started off as a land development company. We buy land, process it, and then once we service the area [put in roads and sewers and municipal services] we sell the lots. We are the only company in Ottawa that is selling developed land to third-party vendors,” Kochar says. “So, if you’re a builder and you want serviced lots to build on, you really have no other place to go. Most developers in this city are also builders, so they service their lots then build on them. The difference with us is that we sell lots to others.”
In 1996 DCR/Phoenix opened another division; for housing. “The housing division also buys lots from the land division. They are under the same group, but are separate profit centers, so they are forced to buy lots at the same price as we sell to third parties.” Kochar explains.
The housing division is simply called Phoenix Homes. “It does roughly 300 to 400 units per year. Then we have another division for commercial work. It covers revenue-producing properties. It could be a shopping center, office building or rental apartment buildings. It buys lots from the land division and develops then into income-producing properties,” Kochar shares.
The last addition to the DCR/Phoenix group is the manufacturing division, which is dedicated to granite. “We are the only builder in Ottawa that offers granite as a standard material for kitchen counters. No one else does this. We have to keep the price down, so this division pulls exotic granites from all over the world. That part of the company is growing fast. We have a contract to do granite for the Export Development Corporation building. It is a huge stride for us to go from residential to commercial now,” says Kochar. The granite division works for other housing companies as well, such as Richcraft Homes, in addition to Phoenix Homes.
The First, The Only
As DCR/Phoenix’s divisions have grown, so have its employees. “We started with two employees and today we have 120. And we’ll probably finish this year with $160 million or $170 million in sales,” Kochar says proudly.
A common theme that has evolved during DCR/Phoenix’s history is being the first or the only company providing particular services. “We were the first to make extensive use of stone, maintenance-free balconies and Victoria styling in Ottawa in 1996,” Kochar gives as an example. “We’re doing a lot of properties in a combination of wood frame and concrete. We are always introducing new designs, new concepts.”
Currently, Phoenix is in the middle of building a model home that will introduce solar heating for regular homes. “It a combination of new technology to preserve hydro, water, and heat. It’s gone beyond being just a green house. This house will be open to the public in November; it will be the first house in Ottawa that can demonstrate such a large amount of new green technologies,” Kochar says. But this is not the first time DCR/Phoenix has designed a house of the future. “Back in the year 2000 we built a house called the Millennium Home. It was the first house which was completely wired and avant-garde. We were the first ones in Ottawa to use concrete in single-family homes for all walls and floors. Again, I could go on listing these firsts; we’re a company that’s always looking for an edge or something special that puts us ahead of the other builders in Ottawa.”
As of the summer of 2010, DCR/Phoenix was developing or building 12 sites in Ottawa. It also has one site under development in Toronto, though the company only develops land in Toronto and does not build there. Although most of its work is in Ottawa, supplemented with a sprinkling of work in Toronto, DCR/Phoenix has also done commercial office buildings in India. Regardless of where it works, DCR/Phoenix prides itself on its variety of products. “We were the first to introduce a townhouse in the $200,000 range; nobody had heard of that in 2009. So from the common person to those able to afford the most expensive homes, our customers are offered the widest choices of homes. We offer the most designs, varieties, range, locations and avant-garde designs,” Kochar says proudly.
To complete these innovative homes, DCR/Phoenix uses mostly in-house talent. “Our vice president of development has his masters of architecture from McGill and masters of planning from Harvard. I have a Masters in engineering from Concordia. My son has his MBA. We have a whole bunch of experienced senior people,” Kochar explains.
Never closed off to fresh ideas, however, DCR/Phoenix does sometimes utilize some assistance from external professionals, such as a Toronto architect for inspiration. “Toronto is always a little bit ahead of Ottawa in designs, so we tap into this architect in Toronto for new ideas that have been germinating in Toronto and incorporate them into conservative Ottawa,” Kochar shares. “We also use another architect in Ottawa for infill designs, which brings in a product that is economical to build and would be interesting product.”
An example of an infill project is DCR/Phoenix’s Daly Square. “It’s a beautiful location with 47 units. 45 of them are presold and we haven’t even broken ground. We were able to bring in an interesting product for downtown,” Kochar explains. DCR/Phoenix was the first company in Ottawa to introduce a co-op way of building apartments for investors. The company brought together a group of investors who collectively bought a piece of land.
“We took the lead for designing the building and outsourcing construction of that building to a third party, and because there was no management fee, no profit involved, no marketing fee, the investors got a price that was almost $120-per-square foot lower than anywhere else in the marketplace. We want to do this again for investors in other locations, as well,” Kochar hints.
As is evident through this project, DCR/Phoenix uses subcontractors for the construction part of the project. “When we do a house, there are almost 50 major trades, those are all subbed out. But we have our own managers, so every site will have our manager, foreman and labor that control the subs. But we are very careful at picking our trades and making sure they perform well onsite,” Kochar says. To ensure top-notch performance, DCR/Phoenix tends to stick with a large group of contractors it has relationships with, “but we aren’t exclusive,” Kochar explains. “Because we are so spread out in Ottawa we try to have at least two to three companies for each trade trades. If one has a problem with a style or whatever, it doesn’t hold up the whole project.”
Preparing for Change
These subcontractors recently went to work on several major projects for DCR/Phoenix. “There’s Heritage Hills in Kanata, a community we started in 1997 that is now going on to the last phase of another 300 or 400 homes. It is a terraced community with designs that have walkouts and reverse walkouts. Those are three storeys in front and two in the back. These are things that are new in Ottawa,” Kochar shares. “This was the only piece of land in Kanata with topography. Instead of leveling the whole thing to build equal homes, we left it the way it was to have an interesting character. Each house has a different level, very complicated, but interesting design. We’ll sell lots in there to other builders as well, but we are the primarily builder.”
Other recent work includes a development mimicked in Strandherd Meadows of Barrhaven and Jack Pine in Bells Corners. These similar developments offer three-storey townhomes with a ground-floor office for a very low price. “This was developed at a time last year where the housing industry was bad and the people needed an entry-level product lower than the others. This product did very well; it sold almost 150 units in less than a year from the two sites. Investors bought that product as well, because it was lower priced and could rent very well,” Kochar explains.
With successful projects like these completed Kochar looks to conceiving plans for DCR/Phoenix’s future. His main focus is creating a succession plan. “My son, Rahul Kochar, has undergraduate degrees in commerce and human resources and an MBA. He has been working with us since his high school days. He will slowly but surely take over the entire operation; he runs the housing division now. He will take over the land division at some point. So there is a succession plan in place,” Kochar shares.
This plan goes beyond just passing the company from one Kochar to the next. “Our biggest challenge right now is various division leaders are in their 60s. The challenge is to train new people to replace them eventually when they retire. The succession planning has to go far beyond ownership. We have to find people, train them, and replace the older people,” Kochar says.
DCR/Phoenix faces other challenges in regards to three major changes Kochar sees occurring in Ottawa. “One is the population is aging, so we are looking for more and more housing designs that are for the aging population. That does not mean just retirement homes and senior residents. It means people that are aging but still want to live in independent homes, so we’re looking at designs to cater to that,” Kochar explains.
To stay connected to the community, DCR/Phoenix is involved in philanthropic organizations. In 2000 the company charged $2 per person to view the Millennium Home, and the money raised was given to Children’s Hospital Of East Ottawa. “It had huge lineups because it was so new. We got about $30,000 out of that. The new Green Home will also have a fee like that and all funds will go to Habitat for Humanity,” Kochar shares. “We also donated a quarter-of-a-million dollars to Ottawa Hospital Foundation. We are always helping with a number of leagues, junior leagues in hockey or soccer, all community leagues as far as we can to give back to the community that buys homes from us.”
The second change Kochar sees in Ottawa is the high-rise or mid-rise that people are accepting more and more as a housing form. "The big challenge is pricing. High-rise concrete construction is in an extremely expensive price range. So we’re always looking for new technologies that will bring the price down. We are now investing in a concrete building, but we will be able to keep the price a little bit lower because it’s a new technique,” Kochar says. “We’ll probably be the first or second one to build with that technique.”
The third change is more attention on sustainable design. “We have to find a way to make housing more energy efficient. My son, Rahul, is at the forefront of these advancements. The Green Home was his brainchild and will demonstrate items that are currently feasible and will continue to be of even more value in the future as costs for these new technologies drop and the cost of utilities rise,” Kochar Says.
Kochar sees Phoenix Homes as the most high-tech company building homes in Canada. “Another innovation that my son has been developing is the connectivity of our firm. Every site is in real-time communication with the office. From the sales process to the construction document preparation in-house, to the field operations (foremen using wireless tablet PCs) to the service department – all departments are integrated through a single software solution,” he says.
Looking toward the future, “we would like to stay in Ottawa as our base and we have been doing work in Toronto for the last 10 years and will continue to do that. Maybe we’ll look into building homes in Toronto as well,” Kochar contemplates. “We’ll also take a look at going overseas to the U.S. Sun Belt [the region of the U.S. stretching Southern California across the Southwest and Deep South] or in the Caribbean. But those would be joint ventures. We wouldn’t do them outright ourselves, but would look for partnerships.”
With these innovative designs and expansive partnerships in mind, Kochar has the DCR/Phoenix Group of Companies established as a leader in turnkey land development and new home construction that will further its legacy under a new generation of leadership.