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

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.

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

As a successful commercial real estate investor, you know how to assess and manage your risk as you grow your portfolio. But not all risks on a deal are apparent.

Every transaction comes with unknowns, and those unknowns can come with price tags. Title insurance protects you and your portfolio from the hard-to-anticipate risks present on every property. As your portfolio expands, those risks compound. Here are three examples:

1. Title fraud

Purchasing title insurance as part of closing lets you move forward knowing that, if the worst happens, your investment is protected. The seller may not be who they say they are, and not every discharge on the title may be legitimate. Every deal carries the risk of substantial losses, because ID theft and title fraud in Canada are getting more sophisticated.

But so are we. FCT is the leader in fraud detection and prevention among title insurers in Canada. Our ability to react to new fraud trends, techniques and technology lets us keep your protection up to date. FCT’s underwriters monitor deals we receive for signs of fraud, and step in to inform buyers and lenders of red flags.

Fraud continues to pose risks to your investment long after point of sale. That is why FCT’s commercial title insurance covers up to $5 million in post-policy losses from fraud. Without that protection, it can be difficult or even impossible to recover any part of your loss from a fraudster registering a mortgage on your property or transferring its ownership.

2. Gap coverage

Even the most straightforward deals have gap periods—points in a transaction where an intervening interest can, even unintentionally, cause losses. Two gaps in particular pose risks for investors:

The work order gap
When you purchase a commercial property, your lawyer will submit municipal searches to check if any work orders have been issued. While the search is in progress, a new work order could be submitted, and you might not find out about it until after the closing date. FCT’s commercial coverage includes an endorsement to protect against losses from work orders submitted after your lawyer’s search and before your closing date.

The title registration gap
When your lawyer submits your transaction documents to a Land Titles Office (LTO), you are still at risk until those documents finish certification. If there are issues with the documents themselves, or worse, an intervening registration is submitted before certification completes, the LTO can reject those documents. Depending on your jurisdiction, this can happen even after you have transferred the funds and received the keys. This is why registration gap coverage is included in every FCT title insurance policy.

3. Errors in government responses

Your lawyer conducts thorough searches on the titles of the properties you purchase. They protect you by conducting due diligence, writing to applicable authorities to verify status and reviewing all the documents attached to your new property’s title to ensure you are aware of potential risks.

If government responses contain any errors, you could take on significant losses without warning, following closing or even years later when you sell. To help prevent this from happening to you, FCT’s commercial policies include a government response endorsement that provides coverage for losses from errors in written off-title responses from government that deal with deficiency notices, outstanding work orders or zoning.

It’s our duty to defend you

Title fraud, gap coverage and errors in government responses are not the only risks you face on every property you purchase—you may also have to defend your title, when the time comes. Your title insurance policy outlines dozens of covered risks, and FCT’s underwriters work to find new ways we can protect our insureds. Defending your interests is an important part of that protection, separate from coverage itself.

Every title insurance policy from FCT carries a duty to defend. That means that if someone claims an interest in your property, we take on the costs of defending your title, even going to court if necessary.

Title insurance is valuable because it can cover losses thousands of times higher than what you paid for the protection. It helps de-risk your position, letting you deploy more capital, with lower reserves.  But, possibly most importantly, it provides peace of mind. It lets you focus on what really matters: growing your portfolio. Unexpected risks can always arise—FCT will be there to meet them with you.

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

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

CanFirst Capital Management has put eight Ontario logistics and industrial assets totalling 1.05 million square feet on the market through RBC Capital Markets Real Estate Group and CBRE.

The properties are in key transportation corridors near 400-series highways, and in close proximity to good labour pools in Burlington, Mississauga, Scarborough, Etobicoke, Markham and Cambridge.

There are four single- and four multi-tenanted properties and 89 per cent of the warehouse space is mid- and large-bay.

The properties have extensive shipping and receiving capabilities, clear heights providing ample warehousing capacity, and varying unit configurations to accommodate a variety of occupier types.

Good income growth opportunities

The portfolio is 99 per cent leased to a high-quality and diverse tenant roster representing the energy, transportation and logistics, construction and building materials, and chemical technology sectors, among other industries.

Average in-place minimum rents across the portfolio are $12.51 per square foot, approximately 55 per cent below market rates.

The properties have a relatively short weighted average lease term (WALT) of 2.5 years, allowing a future owner to drive meaningful net operating income growth in the near term as leases expire and rents are rolled to market.

The Greater Toronto Area’s industrial leasing market continues to experience historically high average net rents and had a vacancy rate of just 0.8 per cent in the second quarter.

These factors are expected to spur strong interest in the properties from different types of investors. The preference is to sell the portfolio in its entirety, but consideration may be given to the right offers for either individual properties or clusters.

No bid deadline has been announced for the properties.

The eight properties

Here’s a rundown of the eight properties:

• 71 Maybrook Dr. in Scarborough is a 44-year-old, 136,340-square-foot building on a 7.19-acre site that’s fully occupied by one tenant with a WALT of 4.5 years. Its clear height ranges from 18 to 60 feet and it has three truck-loading dock doors and eight drive-in doors.
• 81 Maybrook Dr. in Scarborough is a 37-year-old, 72,721-square-foot building on a 3.66-acre site that’s fully occupied by two tenants with a WALT of 1.5 years. It has a 22-foot clear height, six truck-loading dock doors and two drive-in doors.
• 400 Cochrane Dr. in Markham is a 39-year-old, 187,204-square-foot building on a 7.5-acre site that’s fully occupied by two tenants. Its clear height ranges from 18 to 25 feet and it has 12 truck-loading dock doors and two drive-in doors.
• 71, 81 and 91 Kelfield St. in Etobicoke is a 63-year-old, 113,178-square-foot complex on a 6.84-acre site that’s 96 per cent occupied by 10 tenants with a WALT of 2.2 years. It has a 14-foot clear height, 22 truck-loading dock doors and five drive-in doors.
• 6811 Goreway Dr. in Mississauga is a 48-year-old, 107,000-square-foot building on a 4.85-acre site that’s fully occupied by one tenant with a WALT of 0.9 years. It has an 18-foot clear height, 12 truck-loading dock doors and two drive-in doors.
• 1180 Corporate Dr. in Burlington is a 36-year-old, 70,639-square-foot building on a 4.35-acre site that’s fully occupied by one tenant with a WALT of four years. It has a 20-foot clear height, four truck-loading dock doors and one drive-in door.
• 1121 Walkers Line in Burlington is a 65-year-old, 288,161-square-foot building on a 14.87-acre site that’s fully occupied by two tenants with a WALT of two years. Its clear height ranges from 24 to 36 feet and it has 17 truck-loading dock doors and six drive-in doors.
• 400 Jamieson Parkway in Cambridge is a 20-year-old, 75,072-square-foot building on a 5.02-acre site that’s fully occupied by one tenant with a WALT of 1.1 years. Its clear height ranges from 22 to 40 feet and it has eight truck-loading dock doors and one drive-in door.

CanFirst and its funds

Toronto-based CanFirst, founded in 2002, is a commercial real estate private equity company that co-invests with institutional and private high-net-worth investors in industrial and office properties that have growth potential.

It’s involved with development, redevelopment, asset and property management, financing, leasing and construction.

The properties in the Ontario industrial portfolio that’s on the market were acquired through CanFirst’s closed-ended CanFirst Industrial Realty Fund (CIRF) program.

Seven CIRF funds have closed and CanFirst has recently been fundraising for CIRF VIII.

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