Entertainment Tenants Don’t Bring Foot Traffic to Other Retailers in a Mall, Owner Says
Experiential real estate is a buzzword for getting shoppers to visit malls, but an executive for a major North American retail landlord said those types of tenants that offer customers something to do are not necessarily his company’s first choice.
Darryl Schmidt, vice president of national leasing at Cadillac Fairview Corp., the owner of 35 million square feet of retail space in Canada, said the trend toward entertainment to drive foot traffic to malls across his country and the United States following the pandemic has drawbacks.
“There is no question you are seeing more entertainment uses, but the cold, hard reality is they don’t want to pay a lot of rent,” said Schmidt in discussing on the evolution of retail at ICSC Canada in Toronto. “Selfishly, for Cadillac Fairview, our highest and best use is a much more traditional fashion-oriented store or a general-purpose store. That’s at the top of our pecking order.”
He said the real estate company, controlled by the Ontario Teachers’ Pension Plan Board, is monitoring Europe and the United States for what happens next with the trend toward experiential and entertainment tenants in retail spaces.
Everything from pop-up stores to immersive buying experiences to superhero exhibits are becoming part of the mall landscape that some call “retailtainment.”
“Large entertainment-type uses attract a lot of foot [traffic] but not a lot of cross synergies with the rest of the retail brands,” said Schmidt.
The Cadillac Fairview executive said the number of troubled companies in its portfolio is at a 15-year-low, so the real estate company is not in a position where it needs to look for leases to replace failing tenants.
But new tenants are looking for locations and bucking the trend of the past two decades that saw Canada mostly as fertile ground for expanding U.S. retailers.
“It really is a global marketplace. We try to source new leads globally,” he said. “If you look at a triple-A enclosed shopping [mall], whether in London, Los Angeles or Toronto, there is a homogeneity to the mix. Maybe 50% of the brands are global.”
Brick and Mortar Returns
The consensus among the retailers and landlords in one panel discussion was that brick-and-mortar stores are coming back as strong as ever, but the omnichannel nature of shopping that includes e-commerce is here to stay.
David Bianchi, vice president of real estate development with Canadian Tire, one of the country’s largest retailers with 500 locations, said he believes customers still need an in-person experience. However, he noted the Toronto-based company, which sells everything from automotive goods and tools to everyday items like coffee, expanded its online presence during the pandemic.
“Our largest competition right now is the online business. The Amazons. It used to be Walmart. But Canadian Tire is different. We still believe in bricks and mortar; the future is our stores,” said Bianchi, noting customer pickup is part of the company’s plan. “We know Canadian Tire customers prefer to be in-store. They use digital assistance but want to touch BBQs and sit on patio sets, and we don’t see that changing.”
Shawn Fujiki, regional director of real estate at Walmart, said the chain still plans to expand in Canada, including its retail presence as the chain continues to expand online sales.
“Physical retail is not dead. Right now, it’s about trying to make sure we can develop a successful formula for physical retail. We believe in our bricks and mortar,” said Fujiki. “The omni offering is an important part of investment. Any successful retailer is going to have the right mix.”
Oliver Harrison, senior vice president of leasing and tenant experience at RioCan, noted his real estate investment trust’s portfolio of retail properties is 98% leased. Demand is so strong that all 13 Bed, Bath & Beyond locations owned by the REIT in Canada have been leased following the U.S. retailer’s bankruptcy.
But Harrison also agreed the retail marketplace is changing, and for Generation Z, those born between 1996 and 2010, the population grew up in the digital-first world.
“Gen Z is online. It’s mobile. Bricks and mortar still plays a significant role, but it starts with digital-first,” said Harrison.
Lifestyle Fitness Company Plans to Introduce a New Brand to the Market
First Capital REIT has secured a new tenant for one of the most prominent retail locations in Toronto following Nordstrom’s exit from Canada earlier this year.
Lifestyle brand Altea Active, which focuses on fitness, wellness and social amenities and services, has agreed to lease 31,000 square feet at 1 Bloor East, once home to a Nordstrom Rack. Altea Active plans to introduce a new brand called Avant and bring what it describes as a unique high-design luxury wellness destination to the posh Yorkville neighbourhood.
The site, located at the southeast corner of Yonge and Bloor streets, where Toronto’s two major subway lines meet, has been vacant following the March 2023 decision by the Seattle-based retail chain to exit Canada. At one point, Nordstrom had 13 locations across Canada before winding down its operations here.
“This evolution is a major milestone as we continue to elevate our member experience and push the boundaries of what a fulsome wellness and social club should be with premium amenities and luxury hospitality infused at every touchpoint,” said Michael Nolan, co-founder and chief operating officer of Altea Active, in a statement.
Altea Active, which operates in Winnipeg, Toronto’s Liberty Village neighbourhood and is about to open facilities in Vancouver and Ottawa, said its new location in Yorkville would be about one-third of the size of the company’s other Toronto location but still feature strength and cardio equipment, private and small-group training options, and high-end amenities.
An Altea location in Toronto. (CoStar)
Avant says it is challenging the perspective of a traditional gym with amenities and premium offerings and taking a hospitality approach.
The Toronto facility, which will open in early 2025 and includes a long-term lease, will be designed by Chapi Chapo Design, with the company hoping to mimic features found in five-star hotels. Details of the lease were not released.
“We are excited to join this project, fusing our global expertise in luxury hospitality design with the unique essence of the Yorkville community to craft something extraordinary, drawing inspiration from the world’s most prestigious hotels and luxury experiences,” said Boris Mathias, partner & co-founder of Chapi Chapo Design, in a statement.
Eric Sherman, head of national operations at First Capital REIT, called Avant a revolutionary concept in luxury fitness.
Old Structures, Remote Work, Home Fitness Create a Challenge
Since the first visitor walked into North America’s maiden YMCA in 1851, millions of people have flocked to the charitable organization to work out or take a swim. But the facilities are now also attracting interest from real estate developers acquiring many of the properties they see as ripe for redevelopment.
The next YMCA facility that could be part of the redevelopment trend is in Montreal, the home of North America’s first and the city’s largest YMCA, at 1435 Drummond St. The owners have announced plans to sell and move to a rented premises in the same area.
Located within the city’s Golden Square Mile area, the Montreal YMCA blames an increase in remote work as part of the reason for its demise.
“We must tackle considerable challenges, particularly the drop in the number of people coming into downtown for work or other reasons, new work habits, and changes in fitness and workout” routines, it said in a note on its website.
The YMCA sits in the heart of downtown among some of Eastern Canada’s most valuable real estate and it has remained closed since Quebec’s pandemic curfew was put in place. It’s on pace to be the second major YMCA in downtown Montreal to close after a gym at the Guy Favreau Complex shut its doors. Its landlord, the Canadian federal government, canceled a deal to provide free rent in 2006, leading to its closing in 2017.
Redevelopment plans of former YMCAs are also rampant in the nation’s capital. The Orleans YMCA at 265 Centrum Blvd. was purchased by Toronto-based developer Bayview Orleans for $6.5 million in January 2022. The developer plans to build three high-rise towers up to 40 floors on the site.
This YMCA on Argyle in downtown Ottawa has gone up for sale. (CoStar)
Another Ottawa YMCA now ripe for redevelopment is at 180 Argyle Ave., located in the heart of the city, a 20-minute walk to Parliament. The YMCA there has announced plans to sell but will remain on the premises for the foreseeable future. “We are open to plans to sell and vacate but that will be years and years later,“ a representative told CoStar News.
Acquiring one of the roughly 140 YMCA fitness facilities in Canada can be done directly with local management.
“The YMCA in Canada is a federated model so each Canadian YMCA Association is an independent charity,” a representative of YMCA Canada told CoStar News in an email. “Any operational decisions that need to be made at a YMCA location are addressed at the local association level.”
Other Ottawa-area YMCAs that have closed in the past decade include one at 2121 Carling Ave. that was open from 1967 to 2021, and another that was in the Merivale Mall at 1642 Merivale Road closed after complaints of noise and vibration in the shopping centre. An attempt to operate a YMCA in the home of the National Hockey League’s Ottawa Senators also failed, as the YMCA at 1000 Palladium Drive closed due to lack of membership.
Older Buildings
The YMCA’s decline is more about buildings than brand, according to one fitness industry observer.
“Many of the YMCAs are located in buildings that were built over 100 years ago,” said John Atwood of the Atwood Consulting Group in an interview. “All over North America, there are YMCAs that frankly most people don’t want to go to because they are old, tired, moldy and whatever else. The dichotomy is that the YMCAs have done an extraordinary job of reinventing themselves.”
Pointing to the success of a newly built YMCA in Gloucester, Massachusetts, he said “new YMCAs all over the country are magnificent. I wouldn’t say the YMCA is a moribund organization. They’re doing a very good job of reinventing themselves with brick and mortar.”
Atwood does not believe that fitness outlets have suffered a dramatic overall decline, as he notes that gym membership is back to about 90% to 95% of pre-pandemic levels. He concedes, however, that about 5% to 10% of former gym members are not likely to return, with many opting to exercise at home on Peloton machines or other methods.
Canada’s YMCAs have suffered a significant recent decline in revenue, hinting that the trend to swap out the buildings for other purposes will continue. YMCA Canada’s revenue has declined by one-third, from CA$24 million in 2019 to CA$16 million in 2022, while expenses declined by over half, from CA$27 million to CA$12.6 million, according to its financial reports.
YMCAs in the U.S. suffered a similar decline between 2019 and 2022, as their total revenue fell from US$193 million to US$144 million during that period, according to their company reports.
Other Canadian cities that have seen their YMCAs targeted by developers include Toronto, home to the charity organization since 1853. The YMCA at 325 Burnhamthorpe Road W, was sold to RGF (Mississauga) Developments Inc. in 2020 as part of a plan to build five towers, ranging in height from 52 to 65 floors, with a total of 4,277 residential units. The Toronto YMCA situation is not entirely bleak, however, as a new YMCA opened at 907 Kingston Road in 2022.
In Calgary, the Eau Claire YMCA at 101 3 St. SW, which opened in 1988 and closed during the pandemic in 2021, was purchased by Telsec Property Corp., which now plans to redevelop the 430,000-square-foot-property.
In Vancouver, which is home to a downtown YMCA on Burrard Street and another on 49th Avenue, Concert Properties and Peterson Group have outlined plans to build on the 49th Avenue site as part of its Langara Gardens project, a major undertaking of 21 buildings, including towers of 16 to 36 floors. The project includes plans to include a newly built YMCA on the premises.
Redevelopment Plans of the Palace Arms Hotel Aimed at Conserving Heritage
The Palace Arms, one of Toronto’s oldest hotels, is being redeveloped into a rental building on the city’s downtown west side.
Greenwin, one of Ontario’s largest privately owned, full-service property management and development firms with 22,000 residential units, and Intentional Capital have formed a joint venture for the site at 950 King St. West that dates to 1890 with Toronto-based asset management firm Windsor Private Capital.
The redevelopment will see a mixed-use residential housing project, conserving and rehabilitating the building’s existing principal facades, heritage brick masonry, window openings, variegated roof lines and masonry chimneys.
Plans include a 14-storey tower with 219 rental units on a 15,000-square-foot lot, featuring a mix of one, two and three-bedroom units.
Under the approved plan with the city, the development will also incorporate a number of affordable studio suites. Kevin Green, president and chief of Greenwin, credited the city for supporting new developments.
Rod Bell, managing director and co-founder of Intentional Capital, a Toronto-based real estate company in the multifamily sector, called the need for housing in the city critical.
“By integrating the architecture of the existing structure with a reimagined contemporary rental experience, we hope to safeguard a treasured piece of Toronto’s historic landscape,” said Bell in a statement.
Details of the partnership were not disclosed. The property changed hands in 2017 for $13.4 million, according to CoStar data.
“This partnership is a natural extension of our companies’ shared vision and commitment to building and supporting some of the GTA’s most vibrant communities,” said Jordan Kupinsky, managing partner of Windsor Private Capital, in a statement.
Windsor Private Capital is a Toronto-based asset management firm focused on real estate lending and equity investments. It advises and manages assets worth over $3 billion on behalf of institutional and private investors, including the LiUNA Pension Fund of Central and Eastern Canada.
New York-Based Asset Manager Could Seek To Tap Population Growth With Multifamily
The head of Blackstone’s real estate group in the Americas says Canada’s growing population has the world’s largest alternative asset manager looking to step up investments in the country’s logistics and residential property.
Blackstone, with more than US$1 trillion in assets, has opened its first office in Canada in Toronto at 333 Bay St. with the expectation that it will be an important part of its expansion in the country.
“This is a market that we are really committed to and excited about. It’s been very active in the last decade,” said Nadeem Meghji, senior managing director in the real estate group at Blackstone, in an interview with CoStar News. “Canada is third behind only the U.S. and U.K. in global destinations for our investor capital.”
Blackstone made its first big deal in Canada in 2018, in a CA$3.8 billion acquisition involving Pure Industrial Real Estate Trust, partnering with Ivanhoé Cambridge, which continues to have a minority stake in Pure. Pure Industrial remains the vehicle for Blackstone’s industrial presencein Canada today. The company has about CA$27 billion of capital in the country.
“We want to continue to invest [in Canada] because of the long-term fundamentals, which we think are quite positive, including population growth five times that of the U.S.,” Meghji said.
Statistics Canada said the country’s population has continued to increase after reaching 40 million residents this year. For the 12 months ended July 1, the Canadian population grew by 1.2 million people, the largest for one year since 1957.
While there are opportunities, there are also challenges. Moving into any new market takes time to develop business relationships. And there’s already a well-established rival in Toronto-based Brookfield Corp., which controls Brookfield Asset Management and has US$850 billion in assets under management.
Meghji, who is based in New York but was in Toronto last week for the opening of Blackstone’s office, chuckled when asked whether there was any rivalry about being on Brookfield’s Canadian turf: “I don’t have a comment on that, and all I will say is we have enormous respect for Brookfield.”
Building Around Leader
Blackstone’s Toronto office has 10 full-time employees after announcing it had hired Janice Lin as managing director to head up operations in Canada about 18 months ago.
“We started by finding the right leader,” said Meghji. “We built a team around Janice, or she built it. We have folks from other parts of Blackstone, including our private wealth solutions team and our credit team, but fundamentally, having a team on the ground, we think, will make us more effective. We want to send a message that our commitment to Canada is long-term.”
By asset class, logistics and warehouses remain a priority for Blackstone. “Fundamentals remain as strong as anywhere in the world today,” Meghji said. “Supply is muted, and e-commerce penetration continues to grow.”
Blackstone is on the hunt for rental housing in the long term,and taxation rule changes last month, which lowered taxes paid on built units in some provinces by up to 13%, have only strengthened that conviction.
“We would love to find ways to invest in rental housing over time, especially if we can be part of the solution” to the country’s housing shortage, said Meghji. He emphasized that the investment philosophy does not target single-family rental homes in Canada, which is a very tiny asset class north of the border and is hard to profitably own based on housing prices in most cities north of the border.
Blackstone is considering whether to build multifamily and is ready for partnerships with Canadian developers. “There is nothing imminent, but we are open to it. We have been big investors in rental housing globally,” said the executive. “We have very modest exposure to rental housing in Canada at the moment. About 80% to 90% of what we own [in Canada] is logistics.”
The country’s change in apartment construction taxes, whereby developers are 100% exempt from the federal 5% tax and partially exempt or fully exempt in some provinces, did not go unnoticed at Blackstone’s headquarters in New York. “What we know is there is a big need for housing,” said Meghji.
Data centres are also on the agenda for Blackstone, which has been building a platform for them in the United States while being active in India and Japan. “Canada is another market we think presents a real opportunity over time,” said Meghji.
Other Investments
With the latest data from CBRE showing an overall 18.1% vacancy rate for office space in Canada, it is not surprising the sector is not a priority for the American investment giant.
“Canada is very similar to the U.S. in terms of office fundamentals and office utilization. We think it’s time to be cautious, and we were cautious even before the pandemic,” said Meghji. “We are going to be very selective on office.”
The company hasn’t bought a regional mall in Canada or the United States since 2011 because of the pressure from e-commerce. However, grocery-anchored shopping centers are still something Blackstone will consider.
With a long history of buying publicly traded vehicles, Blackstone isn’t ruling out buying a real estate investment trust, either in Canada or elsewhere.
“Globally, we have done over 50 public company transactions over our history in Blackstone real estate,” said Meghji.
He added that “there are moments in the cycle when public companies are mispriced and trade at a discount to the underlying value of their real estate. Given our scale of capital and privatizing companies, that is always something we are open to doing, especially in asset classes we believe in long-term. In moments of volatility, it can often present a company not fully appreciated in the public markets.”
Hepsor Expands Development Pipeline in Toronto With Downtown Purchase
An Ontario developer with roots in Estonia and Latvia is making its second investment in the Canadian real estate market and has two additional deals on the horizon.
Hepsor SPV I Ltd., an Ontario-based subsidiary of Hepsor AS, said it purchased an assembly of three properties in downtown Toronto at 164-168 Isabella St. with its Canadian partners.
No price was not disclosed, but the company said Elysium Isabella LP was founded to develop the property in which various Canadian and European investors are participating in addition to Hepsor and its Canadian partners. Fasken, one of Canada’s largest law firms, advised Hepsor on structuring the deal.
“Hepsor started developing its Canadian business in the spring of 2022 after the start of the war in Ukraine with the aim of finding new growth opportunities and mitigating the geopolitical risks associated with the current home markets,” said Andres Pärloja, chairman of the supervisory board of Hepsor AS, in a statement.
In June, the company made its first purchase in Canada, buying land around Weston Road in Toronto it planned to develop into housing. And Hepsor has more projects in the Toronto area in the works.
“In addition to the Isabella project and Weston Road project, two additional developments of a similar nature in Toronto and the greater Toronto area are currently under preparation,” said Pärloja.
The goal of the first phase of the Isabella Street development project is to assemble the three properties and apply for zoning approvals to permit a residential hi-rise tower on a podium with a projected gross floor area of 450,000 square feet.
The total value of the land and project costs equates to 41 million Euros, according to the statement. The assembly and zoning is expected to take between two and two and a half years, after which Elysium Isabella LP will decide whether to take advantage of the value it created and sell the land or move on to the construction phase.
“Toronto is one of the fastest-growing cities in North America. The city is in desperate need of new quality living space in order to keep up with the growing population. We, together with Hepsor and our investors, strongly believe that developing residential land in Toronto is a very attractive business to be in,” said James Torpey, one of Hepsor’s partners in Elysium Isabella LP and the owner of Canadian-Lithuanian development group VPH Group.
Hopkins Logistics Hub To Add Nearly 300,000 Square feet of Distribution Space in the Durham Region
First Gulf Corp. announced it has begun construction on the Hopkins Logistics Hub, a nearly 300,000-square-foot warehouse facility located at 901 Hopkins St. in Whitby, Ontario, scheduled for delivery in July 2024.
Developer First Gulf and Nicola Wealth Real Estate, the in-house real estate team of Canadian financial planning and investment firm Nicola Wealth, acquired the 13.5-acre industrial development property in 2021. Located within an existing industrial node on Hopkins St., close to downtown Whitby, the site is accessible to the 401 via the nearby Thickson Road interchange.
Leasing for the speculative industrial development is being handled by Cushman & Wakefield’s James Mildon, along with Peter A. Schmidt, Dan Hubert and D’Arcy M. Bak.
Oxford Properties Group Sold Building on Royal Group Crescent to Newmar Alpa Lumber Group for $81.5 Million
Alpa Lumber Group, one of the largest suppliers and manufacturers of construction products distributed across Canada and within the United States, accomplished a rare feat by acquiring a 281,265-square-foot industrial building in Oxford Properties’ Vaughan Industrial Park for $81.5 million in an off-market transaction.
Oxford rarely parts with properties in the industrial park, according to local brokers. The building at 81 Royal Group Crescent is located in Concord, north of Toronto. The sale was arranged by Lennard Commercial Realty broker Jonathan Gorenstein, MBA, SIOR, and reported earlier by Real Estate News Exchange.
The property, which occupies a 10-acre parcel and was built in the late 1990s, is currently tenanted by automotive supplier Martinrea, with five years remaining on its lease. A previous furniture supplier tenant went out of business and vacated the property earlier this year.
The Vaughan Industrial Park encompasses 3 million square feet situated around the Royal Group Crescent, and is owned and managed by Oxford.
Retail Investors Favour Secondary Markets Near Toronto
With retail properties performing well in the Greater Golden Horseshoe, investors bet on two malls in emerging urban centres with plans to densify. The sale of two super regional malls — Conestoga Mall in Waterloo and White Oaks in London, Ontario — signals confidence in outer retail markets near Toronto.
In recent years, a total of 15 malls across the Greater Toronto Area have proposed plans to add residential towers on their properties to create larger consumer populations surrounding their shopping centres.
This trend has expanded out into the Greater Golden Horseshoe and beyond into London, Ontario. In August, Westdell Development Corp. added White Oaks to its commercial holdings and plans a new to rejuvenate the center by renovating the facade, adding new stores on pads separate from the mall, and residential towers on-site. Westdell purchased the 698,500 square foot super regional mall from BentallGreenOak for $141 million or $202 per square foot. The site sits on 46 acres, translating to 35% coverage, lending to the new redevelopment plans by allowing plenty of land for intensification.
London, Ontario — a smaller city 200 kilometres west of Toronto — offers affordable urban living while still being in proximity to larger metropolitan centres accessible by major highways and transit. The city of London is investing more than $200 million in renewing aging infrastructure with projects focused on supporting growth, including two rapid transit projects. London is one of Canada’s fastest-growing cities and these investments will facilitate the city’s expansion and recent boom in population growth boosted by immigration and inter-provincial migration.
Similarly, the purchase of Conestoga Mall by Primaris Real Estate Investment Firm from Ivanhoe Cambridge for $270 million conveys assurance in Waterloo’s retail market. Conestoga Mall recently underwent a significant $46 million redevelopment in 2018 under its former owners. The mall was the first Canadian shopping center outside a major metropolitan region to see annual sales per square foot surpass $1,000 in 2018, according to the Canadian Shopping Centre Study 2018. At the time of sale, the mall was 94% leased and sits on 49.78 acres, covering just 31% of the property, leaving the potential for intensification. Conestoga Mall is a major transit hub connecting to the route of Waterloo’s new ION LRT, which was completed in 2019, making the site ideal for residential development.
Retail leasing picked up in 2021 in the Greater Golden Horseshoe, backfilling most of the spaces that were vacated during the pandemic, and many retail landlords are adapting to changing consumer behaviours. With a marked increase in online shopping, the amount of space required by retailers has decreased as consumers shift to an omni-channel approach to shopping. Brick-and-mortar locations are serving as showrooms for consumers to see products that they can purchase online and conveniently have delivered to their homes.
Overall retail leasing has since dropped by 17% year to date from the five-year quarterly average of 400,000 square feet and 83% down in the third quarter to date. Net absorption within shopping malls in the Greater Golden Horseshoe over the past 12 months slowed by 47% in the second quarter from a high of 165,000 square feet in the first quarter of 2023. Since the beginning of 2022, when adding the London CMA to the Greater Golden Horseshoe region, leasing activity increased by 22%, nearing 3 million square feet.
This elevated leasing activity bodes well for emerging retail markets surrounding the Greater Toronto area even as the market experiences a slowdown through the latter half of 2023.
Corktown to comprise 2 condo towers; Steelport a huge 800-acre industrial development
Slate Asset Management is bullish on the Hamilton market as it launches two major projects in the city – the two-tower Corktown condos and its 800-acre Steelport industrial development.
Corktown is Slate’s vision for a design-forward residential 27-storey tower and 14-storey mid-rise, with retail spaces at the ground level. It will have more than 700 condos on completion.
Steelport, on the historic harbourfront of Hamilton, was acquired from Stelco Inc. in 2022.
Slate has introduced the new name, along with a new identity and preliminary vision for the industrial lands and buildings. Its vision is to reshape the underutilized property into one of the largest, state-of-the-art intermodal industrial hubs in the country.
The redevelopment will bring new industry to Hamilton, create up to 23,000 jobs and inject up to $3.8 billion into Ontario’s economy over the next decade, according to an economic study conducted by EY.
Slate considers Hamilton a growth market
Brandon Donnelly, managing director of development for Slate, said the two projects are part of the company’s broader long-term commitment to Hamilton.
“We think of ourselves as city-builders, meaning we think beyond each of our individual projects and more about what we can give back to the communities we invest in,” Donnelly told RENX.
“With Corktown, not only are we bringing quality architecture and design to the region, but we are investing in jobs, economic development and the greater Toronto housing market. We think this commitment to the City of Hamilton is really the beginning of a renaissance and we’re excited for what’s to come.”
Slate is a Toronto-based global alternative investment platform targeting real estate assets. Its platform has a range of real estate and infrastructure investment strategies, including opportunistic, value-add, core-plus and debt investments.
Steven Dejonckheere, senior vice-president at Slate, said the company’s thesis for a while has been that Hamilton is primed to evolve and grow in a big way.
“I think that’s based on a number of things. Of course there’s the spillover from demand and affordability in the GTA,” he said. “But I think beyond that we’ve always seen Hamilton as the first major municipality outside the GTA that is kind of its own city. It has its own history, its own infrastructure, it’s less dependent on being a bedroom community of the GTA.
“I think along with that there’s all the underlying fundamentals of a growth story there from first-class universities that are bringing in high talent, to sophisticated medical systems, to a thriving arts and cultural system, to the affordability factor that’s bringing in a lot of young professionals. We felt that all of those elements sort of set up Hamilton to really grow when we’re looking out for the next decade or two.”
A “revolution” in the steel industry, which has been Hamilton’s calling card for decades, is opening up further opportunity.
“You fold into that all the changes happening to the steel industry and the fact that it is getting completely revolutionized over the next decade and really changed the image of the heavy industry that has been in Hamilton . . . we know that of course will continue to be part of Hamilton’s story but it’s going to evolve and change and open up room for a lot of new, exciting manufacturing and logistics industries and jobs that come along with that,” Dejonckheere said.
“That’s a complete picture of good momentum that we believe is going to be long-lasting in Hamilton and we believe makes it a good investment for all of our projects.”
Corktown a two-tower development
Corktown is a full city block development in the downtown. The first phase will be the 27-storey Corktown East tower.
Corktown West will be a 14-storey mid-rise building – an L-shaped building fronting on John Street. The first tower will include 372 condo suites and the second phase, which is yet to launch, will likely be about the same unit count.
Donnelly said the mix of units includes about 60 per cent one-bedroom and one-bedroom-plus-den and the remaining 40 per cent are larger suites including two and three bedrooms. The first phase launched in May.
“We’ve seen really great response to the offering, so we’re close to 60 per cent sold in that first phase,” he said. “We plan to start construction on that tower next year and then we’ll also launch sales in the future for the second phase.”
The first phase has a target completion of 2028 with the mid-rise completing later in 2028 or 2029.
The development is two blocks south of the Hamilton GO station and transit hub.
“That’s really something that we look for in all our development projects, especially our residential projects,” he said. “We’re focused entirely on infill projects. We look for existing urban centres where we can build on top of existing infrastructure like transit.
“We like transit. We like walkable communities, urban amenities. Those are the types of things we look for when selecting sites.”
Steelport to become major multi-modal hub
A rendering of the concept for the Slate Asset Management Steelport development in Hamilton. (Courtesy Slate)
Dejonckheere said Steelport will be a state-of-the-art intermodal and industrial hub second to none in Canada.
“It has north of 3.4 kilometres of actual water frontage. Half of that is deep-water dock wall,” Dejonckheere said. “From our knowledge, it’s the longest deepwater port on the Canadian Great Lakes. So really this is going to be a world-class manufacturing and logistics hub.”
Stelco will continue to operate a cold-roll steel mill on 75 acres near the centre of the site.
“That will open up a little more than 700 acres of new development surrounding that and we foresee it being a wide range of industrial and manufacturing uses,” Dejonckheere said..
“We’re anticipating somewhere between 11 and 12 million square feet of new industrial uses, everything from your large-scale big-box logistics uses down to new-age technologies and manufacturing, energy production, logistics that are associated with the port and the rail connectivity.”
He said the development will be interwoven with retail offerings and areas for use by residents and visitors.
“It really is the majority of the Hamilton waterfront,” Dejonckheere said. “So, interwoven through all the development we’re planning is a pretty extensive public realm network that will help bring people out to the waterfront and also currently is envisioning proposing retention of some of the steel manufacturing structures and potentially repurposing them into public amenities as well.”
Steelport will be a 10-plus-year project. Officials anticipate it will house everything from one-million-square-foot distribution centres to smaller unique spaces.
“We’ve designed the plan to centre the larger structures and locate those at the centre of the plan and urbanize the edges of the site some more,” Dejonckheere said. “What I mean by that along the waterfront for instance, which is pretty unique, we anticipate more flex office, small-bay industrial, perhaps opportunities to work with institutions for some sort of innovation, or knowledge or bio-tech based campus setups.
“We’ve also seen interest from creative industries and the film industry.”
Donnelly said Slate believes Steelport is the largest private investment in Hamilton, with a total investment of more than $3 billion when all the buildings and infrastructure are built.
The site is so large Donnelly said Steelport comprises three times the total area of downtown Hamilton.
