Commercial Title Insurance: How Are You Managing Risk?

Title insurance protects you and your portfolio from the hard-to-anticipate risks present on every property.

Some of Canada’s Top CRE Execs Examine Industry Trends

Industrial and office portfolios

While Diamond said the rapid industrial rent escalations of the past five years weren’t sustainable, the sector still offers good margins. He doesn’t believe there will be a major slowdown with the asset class.

Developers can still profitably build industrial facilities as long as their land costs are reasonable, according to Diamond.

More employees have returned to offices in Asia and Europe than in Canada and the United States and, while Canada is going through a period of adjustment with hybrid work models and some people working from home at least a few days a week, Welch believes that offices still have a major role to play in society.

Diamond said Choice itself uses a hybrid model. He said its offices are 80 to 90 per cent full from Monday to Thursday, but that number drops down to 20 per cent on Friday.

RioCan has a mandatory three-days-per-week in the office policy for its over 600 employees, and Gitlin said it’s working reasonably well.

He feels real estate companies should be leaders in office attendance, however, since their business is based on getting people into buildings.

Source Renx.ca. Click here to read a full story

Transforming Office Buildings To Livable Space

Key considerations for office-to-residential and office-to-hotel conversions.

The pandemic was been a key driver for reimagining our relationship with the built environment and is presenting new opportunities across portfolios and sectors.

With a surplus of office space resulting from evolving workplace strategies, owners in conjunction with teams of developers, city planners, architects and engineers are actively managing a variety of complex conversions of these commercial building types into viable living spaces.

But not all office buildings are candidates for conversion. A feasibility study is required to assess the economic, aesthetic, environmental, structural, engineering and market viability for a successful conversion. Consideration must also be given to livable residential uses that range from apartment rentals and condos to affordable housing and hotels.

In this Insight Article, we provide our perspective on key drivers and considerations that are shaping the transformation of commercial office buildings to livable spaces based on our experience leading more than 20 completed, under construction and in-design projects in Canada, the US and UK.

1. Economic viability

The staying power of hybrid and remote work is presenting a real challenge for commercial office owners and developers. While the industry is managing a post-pandemic era, the reality remains that a percentage of existing office buildings are finding economic renewal in converting to livable or mixed-use spaces.

Eroding tax bases due to vacant office buildings can be a lightning rod for adaptive reuse in downtown cores. City planners and local municipalities often greenlight office conversions far faster than new builds to secure a stable tax base. Tax incentives for market-rate and affordable housing also contribute to the benefits of repurposing commercial space and offer developers more avenues to realize economic viability.

These measures help municipalities realize their ultimate goals of returning residents to the city’s most vibrant places. Activating dormant commercial neighbourhoods and reigniting downtown cores only happens with urban regeneration strategies and densification. Existing office buildings are often near transit hubs and retail centres, making them an attractive option for livable uses. Location is key and walkability is high on the list to command desirable units for future tenants.

While each region and municipality has planning approvals and guidelines for such conversions, most cities in North America, including Toronto and Calgary, are offering incentive programs to drive economic recovery in the core. These incentive programs vary based on specific goals.

The UK announced a provision through Class O Permitted Development Rights. This provision removes the requirement to make a formal planning application as development is automatically deemed approved, with the exception of listed buildings of historic interest. These projects are provided with a certificate of lawfulness, usually prior to development, which enables them to be funded or mortgaged, and work can progress in very short timeframes.

2. Environmental and carbon considerations

Converting existing office space to residential-type units often requires adapting existing plumbing, electrical, mechanical and building systems – and in some cases, an entirely new building envelope. Not only do these enhancements improve the energy performance of the existing building, but they help to lower the operational carbon over time, therefore reducing the carbon footprint of the building.

The carbon-reduction effect on the environment by repurposing rather than demolishing or rebuilding cannot be overstated. As architects and engineers, we have a great responsibility for a sustainable future. With aligned interests, a carbon emission analysis at the start of a project informs decisions to reduce both embodied and operational carbon. As energy costs increase in response to climate change the repurposing of existing structures begins to make greater economic sense.

3. Location, characteristics and structural integrity

The location of the target building will have a dramatic effect on its suitability for conversion. The neighboring infrastructure is critical to the initial selection of a suitable conversion.

Many office buildings are simply not suited for residential adaptation. Large commercial office floor plates (10,000 SF2 / 1000 SM2 or greater) result in lightless cores, outdated electrical, plumbing and HVAC systems – all contributing to a costly and exhaustive undertaking. These buildings may be suitable for other adaptive uses with more open floor plan characteristics. However, if development proformas pencil-out, creative solutions are available for most repositioning challenges. Often, smaller and older buildings offer more manageable space for conversions and come equipped with features like higher ceilings and larger windows that are highly desirable for residential use. Hotels are arguably even more appropriate for conversion to senior residences or affordable housing models.

Historically significant buildings may also be able to take advantage of preservation funding which will assist the economics of the conversion and add to the urban fabric of older neighborhoods.

Preparation and pre-analysis of the existing structure is imperative. Once the basics are understood it is a matter of building flexibility into the design layout, ensuring minimal shifts to the core to avoid compromising the structural integrity. Post tension structures can be particularly challenging as are several other systems including clay tile slabs and other older structures. An integrated design approach with a deep knowledge of the systems and understanding of the market conditions of residential planning metrics is paramount to a repositioning success.

Modern technologies like laser scanning and 3D point-cloud modeling mean a faster, less intrusive way to work with existing structures. As we continue to find new ways to repurpose buildings for multiple sectors, the lessons learned are transferable from each conversion project.

4. Market trends and social impact

Residential design excellence provides personalization and pride of place, and the flexibility for different living patterns and household demographics. Premium amenity spaces must be integrated using open areas with direct connections to circulation spaces (stairs, elevators, entrance lobbies, mailrooms, etc.). Fortunately, many older office buildings have amenity spaces that can easily be converted for residential users and may be conveniently located to other neighborhood amenities. This is very much about supporting and fortifying the idea of a 15-minute neighborhood as urban cores continue to repopulate creating livable, walkable, sustainable neighbourhoods.

It is incumbent of any conversion project to respect the adjacent neighbours, yet firmly establish itself with the ideals of its new identity, knitting itself into the existing architectural characters of the streetscape and surrounding fabric. Fostering diversity and inclusion of tenants and space types will support thriving micro-communities and evoke an excitement that will draw people in. Developments have not been without their controversy when space standards, amenities and quality of space are not properly considered. When approached responsibly, conversations can provide an answer to what to do with unoccupied buildings, how to reduce the use of embodied carbon and help provide a solution to the shortage of quality housing within our urban centers.

The conversion of commercial buildings can be viewed as filling the gap, or could be a trend that advances livable communities, but it is a reminder that flexibility is needed to respond to our evolving world. As long as the need for housing abounds, we all have accountability to investigate existing opportunities.

Source Renx.ca. Click here to read a full story

Feel Like Toronto Has Way More Cranes Than It Used To? That’s Because They’ve Doubled

Toronto Restaurant Real Estate Putting A Squeeze On Owners

With today’s climate of sky-high interest rates, pricey lease costs and lingering pandemic recovery, being a Toronto bar or restaurant owner isn’t for the financially faint of heart.

Running a restaurant in Toronto is no easy feat – it never has been. Add today’s climate of sky-high interest rates, pricey lease costs and lingering pandemic recovery to the mix, and being a Toronto bar or restaurant owner isn’t for the financially faint of heart.

With the city bustling back to life post-pandemic, however, a healthy handful of buzzed-about new restaurants open their doors each month throughout the Greater Toronto Area (GTA). And many – from Dundas West to King Street and Yorkville – are packed with patrons. Some older spots, however, are still feeling the pinch of the pandemic.

Rob Eklove, Vice President of Urban Retail at The Behar Group Realty Inc., owned a handful of popular former Toronto bars (Supermarket, Tempo, and Lava) and now specializes in helping chefs and owners find real estate for restaurants. He says the general consensus is that Toronto’s restaurant sales are down 30% compared to pre-pandemic levels.

“But that’s dependent on the market you’re looking at,” explains Eklove. “In the Financial District’s core, they may be suffering more than that because office attendance is nowhere near where it was prior to the pandemic. The suburban markets may fare better because people are working from home and staying there.”

In the years rife with pandemic-inspired lockdowns and restrictions, Toronto’s beloved bars and restaurants took a major beating, resulting in the fight of their lives for countless owners. Of course, some didn’t survive. So, the reawakening of Toronto’s restaurant scene – complete with this slew of new additions – is cause for celebration. But that doesn’t mean life’s any easier for the city’s restaurant and bar owners.

A High Price With Little Wiggle Room

Rents for commercial real estate – especially in the downtown core – remain costly. According to the most recent figures from the Toronto Regional Real Estate Board, the average commercial/retail lease rate in Toronto is $26.32 per sq. ft.

Eklove lays out the math with a real estate acronym: GROC (Gross rent occupancy cost). “In a restaurant setting, you want your gross rent to be 10% or less of your sales, in terms of a business model,” says Eklove. “If you’re paying $100K in gross rent annually, you need to be doing $1M+ in sales. So, if you signed a lease where you were paying $300K in gross rent annually, but pre-pandemic, you thought, ‘No problem, I can do $5M in sales,’ then you’ve got it made in the shade. But, post-pandemic, your sales are $2.5M, then you’re getting squeezed.”

As he highlights, some Toronto restaurant owners locked into leases made pre-pandemic may indeed be in a particularly vulnerable spot. “I think that some restaurant groups downtown that did deals at premium rates pre-pandemic are feeling the pressure,” says Eklove. A handful of restaurants throughout the city have subsequently made headlines as of late for their closures due to their inability to afford rent.

For those entering the bar and restaurant market, while rent costs may be down in some cases, Eklove says that deals are harder to come by these days.

“There has been an uptick in activity; there has been an uptick in people engaging landlords and figuring out if deals are possible,” he says. “But, with borrowing costs up and construction costs up, deals are very hard to come by — that’s the bottom line. People have to have a very sharp pencil when it comes to figuring out whether deals make sense. You’d assume that landlords would be more flexible with lease rates rather than continuing to have vacancies, but that’s not always the case. There are other metrics involved that have an impact on the valuation of particular properties. So, landlords are reluctant to do deals because it could adversely impact the valuation of their property.”

Chef Roberto Marotta, who owns downtown Toronto restaurants ARDO and DOVA with his wife, Jacqueline Nicosia, says that something shifted with the pandemic and its devastation on the city’s food and beverage industry when it comes to commercial real estate. “Following COVID, more than ever, the restaurant industry is seen as high-risk,” says Marotta. “It’s extremely challenging to secure a new location because property owners and managers are looking for significant collateral. If you are new to the industry, it can be an extreme challenge to negotiate and secure the property you are interested in.”

The pair have experienced opening a restaurant both pre and post-pandemic. They opened ARDO in 2015, and DOVA in 2021. “Prior to the pandemic there were far less vacancies, so landlords were more willing to negotiate with you on the terms of the lease,” adds Nicosia. “The real estate market took a huge hit during the pandemic so landlords became incredibly strict on their terms for restaurants. Interestingly, despite the pandemic, rental costs have remained high and insurance costs continue to mount. We recently secured the space for our fourth business and third restaurant and these challenges continue.”

Location, Location, Location

For what would become DOVA, Nicosia says she and Marotta were drawn to the private patio of the real estate at 229 Carleton Street, as well as the opportunity it offered to have a unique private dining room. “They were both features our first restaurant, ARDO, didn’t have,” says Nicosia. “We could see the potential in each space and picture what it could become. We took our time looking as it had to feel right and tick all of the boxes.”

The spot is located in the city’s rapidly up-and-coming Cabbagetown neighbourhood. “We wanted to bring something new to the Cabbagetown area that was missing,” says Marotta. “We love the east end of Toronto and wanted to stay in that neighbourhood. We saw DOVA’s current location a few years prior and when it came on the market again the timing was right.”

Local entrepreneur and beverage expert Evelyn Chick, on the other hand, wasn’t looking for bar space at all when she stumbled upon the Parkdale spot that would later become Simpl Things Cocktail & Snack Bar. “I was actually looking for a secondary event space, but Simpl Things came along and it was such a unique space and my vision was so clear as to what I can do with it – to span across two different addresses, with a massive footprint for a patio that will double the size of the restaurant,” says Chick. “The area is difficult because it’s Parkdale, which to some can be rough around the edges, but with the right aesthetics, unique concept, and good hospitality it can be a destination spot. It is a bit tucked away from the chaos of Queen Street, so often people refer to it as a ‘hidden gem.’”

 

Securing a place to call home is just the first of many challenges for restaurant and bar owners. “It’s challenging in terms of everything being extremely expensive to maintain, including labour, maintenance, insurance…even if the base rent is ‘cheaper,’” says Chick. “New restaurant owners may find a property that they like, but once they get into the build-out stage, budgets are tight as the cost of materials start to increase rapidly and it’s much harder to make your investment back.”

Preparing For An Ever-Changing Market

Eklove calls it “a wash” when asked whether the GTA is gaining or losing wining and dining spaces. “We are losing some spaces downtown, and gaining some spaces in the suburban markets,” says Eklove. “I think we’re in the middle of some uncertainty, but in the long term, there’s no doubt that we’re going to gain more food and beverage spaces.”

Along with this, commercial rents and property values will continue to rise, says Eklove. “It may not be in the foreseeable future, but long-term, I’m confident this is the case.” For those currently in the market for restaurant or bar space, available supply varies throughout the GTA, says Eklove.

“Supply is limited, especially in the suburban markets, because construction costs and borrowing costs have increased significantly, so builders are not building new plazas,” says Eklove. “So, there’s certainly a shortage of supply in the suburban markets, where landlords are getting multiple offers for 1,200-sq.-ft USR space. In the downtown core, there are more options, but people are still quite nervous. The population in the downtown core is nowhere where it was pre-pandemic. People are being careful; they don’t know if a recession is going to hit, and lending and construction costs have increased, so people are being judicious.”

For those looking to secure bar or restaurant real estate, doing the research is key. “Do your homework, research the market, have a solid concept and stick with it, even if small parts of it need to be flexible,” says Chick. “Think about variables and costs involved, as it’s often much more than anticipated. Go through the proper channels, cover your bases, and don’t be frugal with things that have to be done properly – like licensing, plumbing, electrical etc. It will save you a lot of headache in the long run.”

Hiring an in-the-know professional or two also doesn’t hurt. “Hire a seasoned lawyer who is an industry expert and don’t be afraid to push back to secure terms that make sense for you and your business,” says Nicosia. “Know what terms you are willing to negotiate and ones that are off the table because they will directly affect your business. The terms you are able to negotiate will make or break your success.”

Marotta also stresses the importance of finding a strong real estate agent that you trust completely and who has dealt with restaurant locations and negotiations before. “You need to find the right person you can count on,” says Marotta. “We are so grateful we have found the right fit. Finally, don’t be afraid to reach out to industry peers. It will surprise you how much anyone in the hospitality field wants to see fellow restaurateurs thrive.”

For diners, today’s uncertain culture may mean higher food prices – something patrons are just going to have to accept (or stay home). But at the end of the day, most of the city’s restaurant owners are driven by passion over profit. And, if we have to dish out a few more dollars to experience their culinary creations, so be it.

“Despite the uncertainty, I’m very bullish about Toronto,” says Eklove. “It’s a great city. I think with all the immigration that the government is promising, the city is going to continue to explode. So, although there are some short-term growing pains in the food and beverage industry, I’m very optimistic about the city in the long term.”

Source Storeys. Click here to read a full story

RioCan, Allied Announce Retail Tenants Coming To The Well

The joint venture partners unveiled the initial roster of retail on Friday, and said that retail tenants from Structube to Sephora are expected to “physically open in phases” through 2023 and into 2024.

Ten years after construction kicked off at The Well — a 7.75-acre mixed-use development coming to Toronto’s King West district — RioCan and Allied Properties have unveiled the initial roster of retail tenants set to open up in the space.

The joint venture partners announced the roster on Friday and said that retail tenants are expected to “physically open in phases” through 2023 and into 2024.

In the coming months, The Well will welcome recognizable brands like Adidas, Indigo, Structube, The Bone & Biscuit, Bailey Nelson, Le Creuset, Sephora, Frank & Oak, and Shoppers Drug Mart.

Meanwhile, boutique retailers like Black Rooster Décor, Design Republic, Giotelli, Gotstyle, Groovy Shoes, and Suetables will lean into the area’s “King West character.”

As well, three new Oliver & Bonacini restaurants will open doors at The Well, including Aera restaurant, La Plume, and The Dorset.

The Wellington Market (with a diverse assortment of 55 vendors), National (a beer market “inspired by North American tastes”), and a variety of “new concept” restaurants and bars (including Bridgette Bar, Mandy’s Gourmet Salads, L’Avenue, and LuLu Bar) will also be joining the dining mix.

In the health and wellness niche, The Well will welcome fitness and wellness boutique Sweat and Tonic and a full-service medical clinic HealthOne Medical & Wellness.

Finally, a number of cafés (De Mello Coffee, Fix Coffee + Bikes, and Quantum Coffee), bank branches (Bank of Montreal, Royal Bank, and Scotiabank), and beauty and salon services (Etiket, Room1six, Vie Nail & Beauty Salon) — as well as a fully automated, cashier-less grocery store, known as Aisle 24 — will help establish The Well as something of a one-stop shop.

“As we finalize additional lease deals, more announcements of exciting retailers opening at The Well are forthcoming,” said Friday’s announcement. “To celebrate the openings, a ribbon cutting event is scheduled for November 17, 2023 at The Well.”

RioCan and Allied also gave an update on the office and residential components of The Well on Friday, saying that 98% of the 38-storey, 1.2-million-sq.-ft office space is presently leased.

FourFifty The Well — one of three residential rental buildings in the development — commenced pre-leasing in March 2023 and is currently 21% occupied and 30% leased. The remaining rental buildings have achieved 65% leased in aggregate.

Occupancy also commenced for two of the three condominium buildings that will be encompassed in The Well.

Source Storeys. Click here to read a full story

Million-Square-Foot Ontario Industrial Portfolio For Sale

Eight properties spread across the Greater Toronto Area being marketed by RBC, CBRE

Oshawa Distribution Centre To Be Lactalis’s Largest Globally

Broccolini will develop, build, own and property manage a 379,000-square-foot distribution centre for Lactalis Canada Inc. in Oshawa.

The project at 1680 Thornton Rd. N., part of the growing Northwood Business Park, has broken ground and is scheduled to open in late 2024.

Lactalis Canada is a subsidiary of France-based Lactalis Group and is behind such dairy brands as Cracker Barrel, Black Diamond, Balderson, Astro and Lactantia. The company has signed a long-term lease for the new facility, which will become Lactalis Group’s largest distribution centre in the world.

“We are seeing a lot of demand from users who, more so than in the past, are actively in the market early on in the process,” Broccolini director of real estate development Toni Wodzicki told RENX.

“They’ve learned in the last five years with the rate that some rents have escalated that if they can get in the market early enough, and they have specialized needs, they can work with a group like ours to find a solution that’s more specialized and not just spec.”

The Oshawa building will consolidate multiple shipping locations used to service Lactalis Canada’s cheese and tablespreads category, including an internally operated Belleville, Ont., distribution centre, into a central, modern facility to accommodate the company’s long-term growth while increasing capacity and efficiency.

The lease agreement for the GKC Architecture and Design-designed building was facilitated by CBRE.

The centre is expected to create approximately 80 jobs and will be able to store up to 60,000 pallets in both cooler and freezer environments.

Building will have several green features

Environmental, social and governance considerations are currently playing a bigger role in industrial real estate development, especially among institutional investors and users with specialized needs.

The Oshawa facility will be zero-carbon ready, with the potential to be Zero Carbon Building certified, as are all new Broccolini industrial developments. It will also incorporate a number of other environmentally friendly features.

The use of energy-efficient lighting controls, equipment and high insulation values will reduce the power load imposed on the refrigeration system.

Heat generated from the refrigeration system will be fully reclaimed and used to heat the facility’s offices and melt snow on the truck apron.

A white roof will reduce the heat island effect and solar panels that can be installed on the roof in a future phase would provide renewable power to partially or completely offset reliance on the power grid.

Broccolini has a large industrial pipeline

The Oshawa distribution centre for Lactalis Canada is just one of several industrial developments Montreal-headquartered Broccolini has underway or has future capacity for in Quebec and Ontario.

Other projects scheduled for completion next year include: a million-square-foot Amazon distribution centre in Cambridge, Ont.; and a 140,000-square-foot commercial warehouse and CAT remanufacturing facility in Bradford, Ont.

The 74-year-old, third-generation family-owned business has a pipeline of more than 2,300 acres of land with the potential to develop more than 20 million square feet of industrial space.

“Given our expertise in development and construction, and some of the relationships we’ve built with some leading global companies, we’ve been quite tactical about finding near-term, large-scale development sites in secondary and tertiary Ontario markets,” Wodzicki noted.

“We don’t have plans to develop on spec on those sites, but to be patient and find the right partners for them.”

Speculative and design-build developments

Broccolini is speculatively developing about 700,000 square feet of industrial space and also has numerous design-build projects totalling a few million square feet under development.

“We’re generally a little bit more cautious on spec development right now, but it is case by case,” Wodzicki said. “It’s dependent on the market and the site.

“In Montreal we currently have one project under development on spec and in Toronto we have two. We do not have any in what I would consider secondary and tertiary markets.”

Wodzicki said there’s a growing appetite from companies to have buildings designed specifically for their needs which they can acquire and own.

Broccolini’s position as a privately owned builder, developer, fund manager and property manager gives it flexibility on how it approaches the market and the ways it can accommodate the needs of occupiers.

“We own and manage over 21 million square feet of real estate between Quebec and Ontario, but we’ve built over 50 million square feet of industrial space,” Wodzicki said.

“Some of that is third-party construction because that is also an element of our business.

“But from our development side, we can certainly be nimble and flexible in terms of the solutions we can provide our clients.”

Industrial real estate outlook

Wodzicki said there has been a resurgence in manufacturing in Ontario and Quebec, particularly in the automotive and food sectors, so it’s not just distribution and logistics centres driving industrial real estate demand.

High immigration numbers, especially to major Canadian cities, should ensure continued demand for industrial space as more people will need more goods in a timely manner.

The slow municipal approval process in many Ontario markets has delayed development applications and, in turn, constrained supply.

There’s been significant industrial rent escalation over the past five years as demand far outstripped supply, but the market seems to be moderating.

“As the market begins to stabilize and get to a more natural demand and supply balance, you will see a flight to quality if the tenants have choice, which for the past five years many tenants haven’t, so they were forced into renewal scenarios,” Wodzicki said.

“I think what you might start seeing, and why we remain bullish on our ability to deliver new projects, is that higher A-class rents will hold.

“But what you might start to see is a higher rental spread between A-class and older-generation product.”

Source Real Estate News Exchange. Click here to read a full story

Coppley Building Restoration Enhances Hamilton’s Historic Downtown Landscape

Mazyar Mortazavi loves to quote urban theorist Jane Jacobs, who in her landmark book The Death and Life of Great American Cities remarked: “Old ideas can sometimes use new buildings. New ideas must use old buildings.”

As chief executive officer of Toronto-based real estate developer TAS, these eight words, penned more than 60 years ago, guide Mr. Mortazavi whenever he considers a new project or investment.

Repositioning and retrofitting commercial properties for adaptive mixed reuse is TAS’s raison d’être and what led Mr. Mortazavi to invest in the historic Coppley building in Hamilton.

The neglected 167-year-old pair of attached buildings, on the corner of York Boulevard and MacNab Street in the downtown core, had sat empty since the former textile factory, which produced made-to-measure men’s wear, moved its operations three years ago four blocks away to 107 MacNab St. N.

Constructed by Scottish stonemasons, the building is one of the few surviving pre-Confederation commercial structures in the city. Thanks to TAS, which purchased the building in November, 2021 – along with minority owner the Hamilton Community Foundation (HCF) – the site is being reimagined into a sustainable social and economic hub.

A second-generation development company, TAS uses real estate not just for profit, but also for a social purpose. This is TAS’s first Steeltown project. What attracted them was the site’s potential to bring new ideas to an old building and protect one of Hamilton’s oldest structures from the wrecking ball.

“There is a deep culture and context to the Coppley,” Mr. Mortazavi explains. “I’m a big believer in maintaining the cultural fabric of a city and its cultural foundation. To paraphrase Jacobs, ‘old buildings give new ideas.’ I see lots of that in Hamilton.”

“Our aim is to retain as much of the existing building’s character while creating updated spaces that are functional and highly accessible,” he adds.

The HCF drives positive change by connecting diverse people, ideas and resources to create an inclusive city; it makes sense that they are a founding minority investor – and the anchor tenant – of the reimagined Coppley building.

“This landmark has meant so much to the vibrancy of our city’s core and the lives of many Hamiltonians who once worked here,” says Terry Cooke, CEO of HCF. “[The building] is going to be fabulous when it’s finished. We look forward to working and partnering with TAS to deliver a new hub for commercial and social activity in downtown Hamilton.”

TAS looks not just for historic buildings, but locales with a rich history already well on the renewal path. Gentrification it is not. Rather, TAS’s goal is the integration and revitalization of unloved pockets of cities. One of its core objectives, Mr. Mortazavi says, is to use social capital to create neighbourhoods – and ultimately cities – where people can thrive and belong.

This is the case with the Coppley, which is another piece of the continuing urban renewal of Ward 2 (Hamilton’s downtown core), which is once again becoming a vibrant community hub.

Across the street from the former luxury clothier is the historic Farmers’ Market at 35 York Blvd., which, along with the Central Hamilton Public Library that shares the space, has been in this location since 1980. Nearby is another heritage building – the global headquarters of G.S. Dunn Ltd., the world’s largest dry mustard miller, founded in Hamilton in 1867.

The redevelopment of commercial spaces in Hamilton’s core also includes the planned $500-million new entertainment hub that incorporates FirstOntario Concert Hall, the FirstOntario Centre, the Hamilton Convention Centre and the Art Gallery of Hamilton.

The Coppley building will house the new HCF office, along with a mix of other community-centred businesses, not-for-profits and retailers on the ground floor that might include a microbrewery and an independent coffee shop.

Another feature of the historic building is a pair of interior courtyards, originally designed for horse-drawn carriages to bring in supplies. TAS plans to reimagine these spaces as a year-round covered community gathering spot for art crawls, public events, lectures and live music.

“It’s a unique project,” says Cameron Kroetsch, councillor of Ward 2. “I’ve toured the building and talked to others about TAS’s vision and how they want to make it an inclusive space, not just by housing the Hamilton Community Foundation, but they also have plans to include BIPOC groups as tenants.”

Before blueprints were drafted, TAS solicited feedback from more than a dozen local community organizations. Themes that emerged from these meetings included several conclusions that TAS is taking to heart as it begins design.

“Heritage is important,” Mr. Mortazavi explains. “This is a local landmark that needs preserving. Collaboration and connectedness are keys in designing the space, along with affordability and access for all to shared amenities. This fits our community hub strategy, which we’ve used to lead the adaptive reuse, lease-up and operations of underutilized warehouse spaces across the GTA.”

Mr. Kroetsch says he’s happy the Coppley is being preserved “as almost every other building around there is being demolished.”

“We went through a similar redevelopment 50 years ago when the entire downtown core around city hall was demolished to make way for Hamilton Place and the convention centre and it did not go well if you read the history; there was a lot of acrimony, construction delays and problems with the developer,” he explains. “There is so much construction planned for the downtown over the next five years. I’m glad they are staggering these projects and taking their time.”

Originally set to reopen as part of Phase 1 in 2023, the pandemic and a few other delays lengthened the project’s timeline. With the removal of the old textile equipment, the interior demolition work is now complete, and the new target for completion of Phase 1 (mostly office space designed to promote interaction between tenants with some ground-floor retail) is mid-to-late 2024.

“We see ourselves as just a piece of the puzzle, not the solution,” Mr. Mortazavi says.

Source The Globe And Mail. Click here to read a full story

Canadian Retail Rent Survey Reveals Mixed Results and Optimism Amidst Economic Challenges

The Canadian retail landscape experienced positive but mixed results in the first half of the year, with stronger performance being reported in select formats or nodes, according to the CBRE’s H1 2023 Retail Rent Survey.

“The current economic climate, inflation and elevated interest rates have paused leasing activity amongst some retailers, but not all. The most active category groups vary by market and are most frequently led by QSR and personal services. As has been the case, good real estate continues to be leased quickly, resulting in limited vacancy amongst the most in-demand formats, particularly those that are unenclosed,” said the report.

“This is expected to continue, and when paired with a softening supply pipeline – a byproduct of higher construction costs – could result in further rental appreciation over the next six months.

“Select cities have noted challenges with downtown areas, citing slower foot traffic from reduced office occupancy. This sentiment and its subsequent impact on urban retail formats are not uniform across the country; however, this category represents the greatest share of rent increases reported in this survey. In fact, five of 11 markets saw rental appreciation in two or more key urban nodes. High streets in Toronto, namely Bloor-Yorkville, remain a top destination for high profile retailers. Meanwhile, Sainte Catherine Street West in Montreal has seen an uptick in activity with initial phases of construction of the street revitalization nearing completion.

“More upward market movements were reported in H1 in comparison to prior editions of this report with 29 noted increases and only one reduction in benchmark rent prices. Geographically, Montreal and Calgary reported the highest number of rental rate increases, respectively up in eight and six formats or key urban areas.”

Key findings of the report:

1. Open-air centres are reigning supreme with community (unenclosed), neighbourhood and convenience centres noting increased rental rate ranges in three of 11 markets. Demand remains strong for space in these formats, especially if grocery or food anchored;
2. Key urban areas face various headwinds, however demand remains strong for the most desirable nodes: 30 per cent of high streets or streetfronts included in this report saw rental rate appreciation;
3. Mixed-use, both urban and suburban, is gaining traction with each noting rental rate increases in three of 11 markets;
4. Montreal and Calgary reported the highest number of rental rate increases, respectively up in eight and six formats or key urban areas. This was followed by Halifax (+5) and Toronto (+4); and
5. Sentiment remains optimistic across markets despite economic conditions. Activity remains positive, with best- in-class locations leasing quickly.

“We’re back in retail,” said Kate Camenzuli, Vice President of CBRE and Practice Lead, Occupier for Retail, Canada and Cross-Border. “Good real estate is moving quickly. We’re seeing growth in the retail sector. High streets are continuing to grow.

“We’re excited to see how it continues to be a very tight market. The difficulty is that when it’s not a tight market it’s usually not super active. So it’s a very active market and across all metropolitan markets.

“I think we are seeing really good growth back into the cores of the city. I think we are seeing continued growth in community-based areas and suburban malls and streets.

“Overall high tides rise all ships and that’s one of the stories for this quarter that we are definitely seeing.”

Camenzuli said one trend that the retail industry is experiencing is groups that are traditionally street and new innovative street retailers are now coming back to the market.

“So we might see high street, suburban high street and sort of the out of enclosed malls outperform enclosed malls only because those are the new retailers right now that are coming into the market,” she said. “But the enclosed mall landlords have done a great job at attracting those traditional street retailers into the malls.”

She said moving quickly on good real estate is going to continue to be important.

Source Retail Insider. Click here to read a full story