Monday, October 8, 2018

TORONTO


TRENDS

The Mink Mile - Bloor Street

Toronto’s Yorkville neighbourhood has come a long way from the 1960s, when cheap rents for its Victorian row houses attracted artists and trendsetters who populated the area with galleries and music clubs that featured up-and-coming talents such as Gordon Lightfoot, Joni Mitchell and Neil Young.
Today, the Bloor-Yorkville area’s eclectic low-rise streets are ringed by high-rise office and condo towers whose tony retail tenants including Holt Renfrew, Gucci, Birks and Tiffany – and attract so many fashionistas, the zone is nicknamed the Mink Mile.

According to a new study by Chicago-based commercial real estate brokerage Jones Lang LaSalle Inc. (JLL): “The luxury stretch of Bloor Street West between Yonge Street and Avenue Road boasts Canada’s highest retail lease rates, which averaged in 2019 about $285 a square foot, putting Bloor Street ahead of Robson Street in Vancouver (at $225 a square foot) as well as in line with upscale streets such as Newbury Street in Boston, and Lincoln Road in Miami.”

High-end retail experience is pushing its boundaries

With its abundance of luxury retailers, the area is nicknamed the Mink Mile.
Wallace Immen/The Globe and Mail
The affluence of this retail location influences nearby streets, spilling north to the area’s namesake Yorkville Avenue.

Turns out this northern stretch of Yorkville Avenue between the Hazelton Hotel at 118 Yorkville Ave. and Bellair Street has seen rents nearly double over the course of three years, currently averaging between $250 and $275 a square foot, JLL found.

By comparison, leases on Toronto’s Queen Street West average $100 a square foot, Robson Street in Vancouver $225 and Saint-Catherine Street in Montreal $210, JLL reports. Of course, those numbers pale in comparison to New York’s upper Fifth Avenue, where rents can reach US$2,720, the Beverly Hills triangle in Los Angeles that can command US$1,100 and Oxford Street in London where prime rents are the equivalent of US$775.

Growth in upscale shopping area isn’t an accident

Yorkville’s launch into the upper echelons didn’t happen by accident, though. Even a few years ago, there was speculation that with shifts in retailing toward more online shopping and a retrenchment of brands that the zone north of the Mink Mile would fall into decline.
Yorkville was getting decidedly shop worn by 2011, when First Capital Properties, a subsidiary of First Capital Realty Inc., acquired Hazelton Lanes, a 1970s shopping mall at the corner of Avenue Road and Yorkville Avenue.

To pump life into the area, First Capital developed a long-term vision for Yorkville that started with a total renovation of the old mall – to give it more street presence. The redevelopment also allowed for a rebranding and the mall became known as Yorkville Village.
First Capital rechristened Hazelton Lanes as Yorkville Village.
Over the past eight years, First Capital has purchased and reconfigured several stretches of Yorkville Avenue where Victorian homes had been converted to shops in the 1970s and 80s. The property redevelopment and management firm also took a majority position in the Hazelton Hotel, which was redesigned and relaunched as a preeminent luxury boutique hotel that is at the core of Yorkville’s luxurious experience.

“We are reinventing ourselves every day,” says Gregory Menzies, executive vice-president of First Capital Realty Inc., and project lead for Yorkville Village.

“Yorkville is almost a perfect storm, where you have tremendous amount of density and tremendous amount of high-net worth,” Mr. Menzies says.
With the number of condo units in the area expected to double in the next two years, Yorkville retailers can tap into an expanding base of potential customers.
Wallace Immen/The Globe and Mail
There are about 11,000 condominium units in the immediate area and that’s destined to double in the next two years based on what is planned for the area and what is currently under construction.
Add to this the tourism and the business community along Bloor Street and the University of Toronto, and the area is rich in potential customers, Mr. Menzies says.

Trend in high-end retailing requires ongoing community support

In the past, many brands shifted their flagship stores into enclosed malls, but there’s now a shift back to brands – particularly the higher-end and exclusive name brands – having their main flagship stores at street level in Yorkville, the JLL study found.
For example, the 102-108 Yorkville Ave. block of properties, which are new builds done by First Capital Properties, boasts flagships of many of fashion’s most exclusive names, including Brunello Cucinelli’s largest North American store at 8,200 square feet spread out on three levels of retail space and Versace with two floors of retail space totalling 3,000 square feet.
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Chanel's Toronto flagship store is housed in a heritage structure that was once home to Mount Sinai Hospital.
First Capital/Handout
According to the new report, the Canadian luxury apparel market will increase by 5.8 per cent in 2019 and by 18 per cent from 2019 to 2023, to reach $3.2-billion in sales within the next five years.

More importantly, report authors predict that the luxury sector growth rate will be nearly twice that of the overall clothing retail sector.

That should translate into more luxury store demand for Yorkville, Ms. Lemm says.
“It is an incredibly exciting time for Bloor-Yorkville,” she says. “There has been a real renaissance to the area that will continue to propel other luxury interest and activity and help to continue the growth of this destination-shopping area.

Top 10 Transactions of 2018

https://renx.ca/top-10-cre-transactions-toronto-2018/
By Kelly Roche


The top two transactions

Topping the chart in 2018 was the sale of a 50 per cent interest in downtown Toronto’s Bay Adelaide Centre, owned by Brookfield Properties (BPY-UN-T ). Private firm Dadco investments paid $850 million for its share of the property. 
“That’s one of the best assets in Canada,” Wong said.
British-Canadian businessman Victor Dahdaleh, who heads Dadco, made the investment in March. The 51-storey, 2.2-million-square-foot property takes up an entire city block in the heart of the financial district at 333 Bay St.
“It ranked as the biggest transaction in Toronto last year,” said Wong.
A redevelopment site deal came in just behind, at No. 2. Bombardier sold the Downsview airport site at Dufferin St. and Sheppard Ave. W., to PSPIBDownsview Investments (Public Sector Pension Investment Board) for $825 million. 
At the moment it’s unclear if the ICI land will continue to be used for industrial or manufacturing. Wong predicts possibly seeing a mix of commercial, office and retail in the next five to 10 years as the site is redeveloped. 

What’s driving buyers, sellers?

They were by far the two largest transactions during 2018, a year when Wong said investment activity remained at a constant level. He cited three key motivations for investors and sellers:
* Focusing on core assets or core investment strategy. For instance, RioCan REIT (REI-UN-T) has decided to focus its retail and redevelopment efforts in major markets such as Toronto, Vancouver, Montreal, Edmonton, Calgary and Ottawa “and less so . . . on the tertiary markets.” 
* Value-add. Investors seeking real estate or investment properties to which they can add value, such as improving an existing asset. For example, Timbercreek‘s acquisition of an apartment portfolio from the Wynn Group: “They’re looking to invest into those apartment buildings to increase potential rental rates or returns off of those properties.”
* Realizing gains. “They’re acquired this asset over a number of years and they’re looking to take some profit off the table,” said Wong. He offered the $850-million deal for Bay Adelaide Centre as an example: “In that situation, it’s perfect for Brookfield because they still manage the premises and they’re also taking some profit off the table, and they’re still getting the revenue from being able to manage the facility and as well as own half the asset.”
Here are the rest of the Top 10 GTA transactions, according to Altus data:

3. Lakeview Lands

Lucrative South Mississauga lands make two appearances in the Top 10 transactions, including the Ontario Power Generation sale of the Lakeview Lands for $275 million. The buyer was Lakeview Community Partners Limited, a consortium comprised of TACC Construction, Greenpark Group, CCI Development Group, Branthaven Homes, and Argo Development Corporation.
Locally, the brownfield site is referred to as the “Four Sisters,” a nickname spawned by the chimney stacks which stood above the former generating station. Lakeview was one of five OPG coal-fired power plants shut down to reduce the province’s greenhouse gas emissions. 
The lands are located at 800 Hydro Rd., east of Cawthra Road and south of Lakeshore Road E. The 177-acre site is being transformed into a mixed-use community with parkland.

4. Queen’s Quay Terminal

Queen’s Quay Terminal at 207 Queen’s Quay West was sold by Brookfield Properties to Quebec City-based iA Financial Group for $261 million. Wong called it an opportunity to “pick up a really good asset” in Toronto.

5. Parkway Place

Tigra Vista Inc. paid $256 million to acquire North York’s Parkway Place from Agellan Commercial REIT (ACR-UN-T). The deal for the office space at 235-245 Consumers Rd. is among a trio of the GTA’s 10 largest transactions which were sealed during the fall. 

6. 55 University Ave.

Back in the downtown, Cominar REIT (CUF-UN-T) sold office space at 55 University Ave. to Investors Group for $195 million. Cominar’s strategy “last year was basically to focus on core assets,” said Wong. 

7. 3575 Elgin Mills Rd.

Pemberton Group acquired 3575 Elgin Mills Rd. in Markham for $187 million in April 2018. The residential land play means “they’re looking to develop those lands down the road,” Wong said.

8. Starlight buys Wynn Group portfolio

The Wynn Group sold the Riverside Apartments in Etobicoke to Starlight Investments for $183 million. The property is at 2737 and 2757 Kipling Ave. “I think they were looking at opportunities to be able to improve that site or improve that asset,” said Wong.
(Riverside is part of the Wynn Group / Starlight Investments’ GTA Apartment Portfolio, which consists of nine total properties — eight in Toronto and one in Brampton. The portfolio was purchased for $402,137,237 and contains a total of 1,527 residential units, representing an aggregate price per unit of $263,351).

9. Dixie Outlet Mall

Cominar REIT made the Top 10 a second time with its sale of Mississauga’s Dixie Outlet Mall. The 406,000-square-foot retail property at 1250 South Service Rd., was sold to Slate Asset Management in a $181 million transaction. The mall is located just south of the QEW between Cawthra Rd. and Dixie Rd.
“They’re probably looking at all different options at this point,” Wong said, to improve the site or increase returns. “Right now, I think it’s going remain retail.”

10. West Lodge Apartments

The Wynn Group sold its West Lodge Apartments in Toronto to Timbercreek Asset Management for $170 million. The properties are at 103 and 105 West Lodge Ave. It was also part of a larger portfolio transaction, which included 21 properties across Ontario.     -  2019 Jan 2019

Toronto | Office
The World's hottest Luxury Market

The Canadian city of Toronto was the hottest luxury real estate market in 2014, bucking a slowing trend in the world's top property hubs, according to a new report from Christie's International Real Estate.
In 2014, year-on-year luxury real estate sales slowed in the nine of the world's top 10 property markets, which top-end international realtor Christie's ranked by sales prices, average prices per square foot and number of luxury sales. Homes priced at $1 million or more were classed as "luxury."  -  CNBC
MORE FACTS:

Other

Harbourfront

The challenges of connecting Toronto's south core
This community is shooting skyward with creative upgrades at street level and below

http://www.theglobeandmail.com/report-on-business/industry-news/property-report/the-challenges-of-connecting-torontos-south-core/article16209321/


While the skyscrapers of Toronto’s booming south core show no signs of slowing their climb, the equally impressive work taking place at and below ground level is what will define the area.

About 1.6 million square feet of new office space has been added to the south core market in the past five years. New developments under construction will inject a further 23,000 workers and almost another 10,000 residents into the already teeming south core district. As a result, infrastructure has never been more important to the area, particularly one that has undergone a dramatic role change

Bordered east-west by Bay and Simcoe streets, the south core area stretches south from the railway tracks that run along Front Street to the shores of Lake Ontario. “So part of the revitalization of the waterfront is creating infrastructure that serves more modern, mixed-use communities rather than the type of infrastructure that was needed when the waterfront was a busy industrial port,” Mr. Knoeck adds.

The Toronto waterfront is currently halfway through a 25-year redevelopment plan that is now estimated to cost approximately $34-billion, twice its original budget. In addition to surface-level improvements for residents and visitors – with a particular emphasis on the 2015 Pan Am Games – it also includes less visible but equally vital improvements underground. Many of the aging sewer pipes in the area will be replaced – nearly 20 per cent of all sewer pipes in Toronto are more than 80 years old.

Toronto Hydro is also doing its part with a $195-million transformer station being built under the west side of the railway roundhouse next to the Rogers Centre. Set to open in 2014, the Clare R. Copeland transformer station is the first built in the downtown core by Toronto Hydro since 1955, and will add 144 megawatts of capacity, enough to power 70 condominium towers, while freeing up the company’s 64-year-old Windsor transformer station at Wellington and John Streets for a needed equipment upgrade.

As Tanya Bruckmueller, spokeswoman for Toronto Hydro, puts it, “A lot of the infrastructure, including our station, is significantly past its life expectancy.”

While some in the real estate business warn that a lack of infrastructure could be the undoing of the downtown core, the rapid growth of the south core makes it a prime target for investment.

“I don’t know of another place in Canada where you’ll have this much employment [in] office buildings, a very significant number of new and existing residential units, a tremendous amount of new retail being added at the base of most of these buildings, obviously there’s entertainment in the Air Canada Centre and Rogers Centre – it’s all here,” says Dermot Sweeny, president of Sweeny Sterling Finlayson & Co Architects Inc.

Mr. Sweeny is one of the architects on the One York Street and Harbour Plaza Residences project, a mixed-use development costing more than $550-million on the south side of the Gardiner Expressway consisting of a 35-storey office tower and two high-rise condominium buildings that will open in 2016. While One York is a collaboration between Menkes Developments and the Healthcare of Ontario Pension Plan, which will be a tenant in the tower, the two residential buildings are being jointly developed by Menkes and Oxford Properties.

The design of One York Street threw up a unique infrastructure challenge when Mr. Sweeny was asked to extend Toronto’s indoor PATH walkway system south of a rather large obstacle – the Gardiner, a crumbling, controversial elevated expressway that dates back to the 1950s. Teaming up with the architects from Oxford Properties, WZMH Architects, who are developing the Royal Bank of Canada’s Waterpark III building to the south of One York Street, the collective knew the importance of making a successful PATH connection – RBC stated it wouldn’t go forward without it.

As Peter Menkes, president of the commercial/industrial division of Menkes Developments, put it, “Any downtown tenant that’s from the traditional King and Bay area, to come to this location, expects to have a PATH connection.”

Unable to go underground owing to low-lying sewer systems and with going above the Gardiner ruled out as it would have put the walkway 20 metres in the air, Mr. Sweeny and his fellow architects responded with a novel concept by planning for the PATH to go under the Gardiner but above Lakeshore Boulevard. Because of the constant need to keep up the concrete underbelly of the Gardiner, the PATH connection will be built on gaskets so it can be moved sideways and still be usable while repairs are going on.

The south core portion of the PATH will come further into focus once the redevelopment of Union Station is complete. Canada’s busiest transportation hub is undergoing a massive facelift which conservative estimates peg at anywhere between $700-million and $1-billion.

“For the first time ever in the history of Union Station it will actually have an entrance that faces south,” says James Parakh, acting director, urban design for the City of Toronto planning division. “That’s important because we can easily get pedestrians from Union Station or from the TTC subway down into this neighbourhood very conveniently.”

One York Street and the Harbour Plaza Residences project will also help to improve that neighbourhood for those pedestrians. With the developers paying rezoning fees under Section 37 of the Planning Act, the City of Toronto now has the funds to follow through on its plan to adjust the layout of the Gardiner Expressway and other roads in the area.
The Gardiner off-ramp that originally deposited vehicles gradually at Bay and York streets will now terminate more sharply at the foot of Lower Simcoe, allowing the freed-up area to the east to be used as green space with a widened eastbound Harbour Street.

“That was the whole intent,” Mr. Parakh says.“We had done a study many years ago, long before the Menkes application, that took a look at removing that ramp and of course Menkes, as part of their approval, provided Section 37 contributions by way of funds that removed that ramp.

“So it’s sort of a win-win. If that ramp is not needed, it’s a great location for a park, right in close proximity to the waterfront.”

Despite concerns that the new layout will increase congestion in the area when it’s finished around 2016, Jared Menkes, director of development for Menkes, believes the opposite, and says that the city’s new “Live Work Play” mantra is firmly in play. “A lot of people are moving downtown because they want that urban lifestyle, they don’t want the car,” he says. “So I think from a car perspective it’s going to ease that congestion but I think foot congestion is going to continue to grow."



Millionaire's Row on University Avenue



The Shang in Toronto












Rosedale 
My sister-in-law in Toronto is downsizing and listed their Rosedale home for sale


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