Bricks-and-mortar retail has performed better than many expected after lockdowns, increased online shopping and other challenges brought on in recent years by the pandemic and ensuing economic uncertainty.
A panel discussion moderated by National Bank Financial director and real estate research analyst Tal Woolley at the Sept. 12 RealREIT conference at the Metro Toronto Convention Centre examined how retail real estate owners have adapted and what they’re planning as they move forward.
Panel members also talked about redeveloping and intensifying their properties by adding residential components to create mixed-use communities.
Toronto-headquartered First Capital (FCR-UN-T) owns, operates and develops grocery-anchored open air centres in Ontario, Quebec, Alberta and British Columbia, and has $9.6 billion in assets under management.
It has a 22-million-square-foot portfolio and a density pipeline of more than 24 million square feet.
Executive vice-president and chief operations officer Jordan Robins said most of First Capital’s retail tenants provide essential services and its grocery stores, pharmacies, liquor and beer stores largely remained open during the worst of the pandemic, then ramped up their programs as the effects waned.
First Capital is about halfway through an enhanced capital allocation and optimization program that will see it sell off $1 billion of assets over a two-year period.
“We’ve had tremendous success crystallizing or monetizing the value that we created through our entitlement program that started several years ago,” Robins said.
While historically First Capital has done more portfolio sales, the current plan largely revolves around individual properties. Robins said most purchasers have been individuals, family offices and, to a lesser extent, institutions.
While there’s a strong demand for grocery-anchored assets, First Capital won’t be selling any as part of its optimization program – it is actually looking to acquire more.
However, there’s a wide bid-ask spread between buyers and sellers of retail properties which Robins feels has slowed transaction activity.
Given cost escalations and lengthy municipal approval processes, Robins said the cost of building new retail space significantly exceeds the value of existing space. The opportunity costs of tenants looking to move into new space have also risen.
“Renewal rents for those tenants who decide to stay have also escalated,” said Robins. “We’re seeing meaningful organic growth out of our portfolio because it is so time-consuming for tenants to find alternate space and so expensive for them to find alternate space.”
First Capital has looked at every property in its portfolio to identify which ones can be intensified and if the value of the density is greater than the income in place. For those that pass the test, it creates master plans that can be submitted for entitlements to extract that value.
Those properties could then be sold or intensified either by First Capital on its own or with partners.
Toronto-based Oxford Properties is a real estate investor, developer and manager that, along with its platform companies, manages $87 billion of assets on four continents.
That represents more than 158 million square feet of commercial space, more than 3,400 hotel rooms, nearly 10,000 residential units and a substantial credit portfolio.
Oxford’s Canadian portfolio is comprised of 52 assets in seven cities encompassing 30 million square feet and valued at $18 billion. The Canadian retail portfolio includes eight properties representing 10 million square feet and valued at $7 billion.
“There was a pleasant surprise with tenant demand very quickly after our doors started to reopen,” vice-president of operational strategy Claire Santamaria said.
“That went back to our strategy around the densification of our retail sites and also on the strategic leasing that we’ve had, particularly at Square One, Yorkdale and Scarborough Town Centre.”
There’s been a shift in the tenant mix away from fashion and increases in electronics and specialty retail. A bigger focus has been placed on experiential retail and educational spaces, according to Santamaria.
E-commerce has stabilized and isn’t growing exponentially as it did during the height of the pandemic, and retailers are realizing the value of physical spaces in their growth plans.
Since 2015, Oxford has been moving through the master-planning process with local municipalities for properties where it has excess land that can be intensified. These 20-year plans might previously have incorporated a large office component, but are now focused on adding housing.
“Our strategy around destination resilience and around our retail assets still remains at the forefront for us,” said Santamaria. “We’re certainly taking advantage of the tailwinds that the residential market offers.
“Those are capital-intensive, but our development team and the pro formas associated with the building of that residential is still something that we’re looking to zone and execute on.”
Fredericton-based Plaza Retail REIT (PMZ-UN-T) is a value-add-focused owner, developer and redeveloper of retail assets responsible for 240 properties totalling almost nine million square feet in six provinces from Ontario to Newfoundland and Labrador.
“We own open-air, central needs, value, convenience-style assets occupied by national retailers,” chief executive officer and president Michael Zakuta said.
“We’ve grown through development and redevelopment, whether it’s a new development based on tenant demand, converting an enclosed mall into an open-air strip or converting an empty box into a multi-tenant strip.”
Tenant demand picked up pretty quickly after lockdowns ended and it remains robust, particularly for quick service restaurants, according to Zakuta.
Plaza’s grocery and pharmacy-anchored strip malls aren’t for sale despite plenty of offers coming in.
Plaza has been actively selling small, non-core assets, which Zakuta said has been very rewarding as many of the purchasers have used low leverage or all-cash while paying a premium price.
“We’re taking that capital and we’re investing in land or land assemblies,” Zakuta explained. “We’ve been very active buying land for new developments and some of it gets sold off at a profit to residential developers for horizontal development, not vertical.”
Toronto-headquartered Primaris REIT (PMZ-UN-T) owns and manages 35 retail properties across Canada valued at approximately $3.5 billion.
This includes 22 enclosed shopping centres totalling approximately 9.8 million square feet and 13 unenclosed shopping centres and mixed-use properties encompassing approximately 1.6 million square feet.
Primaris is the only Canadian REIT specializing in the acquisition, ownership and management of enclosed shopping centres in Canada.
“One of the big drivers of the return of appetite for retailers to expand was resolving e-commerce and getting it integrated into their omni-channel offering,” chief executive officer Alex Avery said of the post-pandemic period.
“I think that that has clearly happened and we’ve got demand from grocery, drugs, pets, athletic clothing, cosmetics and footwear. It’s pretty much across the board.”
The closure of Sears and Target stores over the past eight years prompted Primaris to invest a large amount of capital in repositioning malls where those retailers were located.
Avery remains optimistic and Primaris is in acquisition mode, recently purchasing the 585,000-square-foot Conestoga Mall in Waterloo from Ivanhoe Cambridge for $270 million.
“I think what we’re going to see over the next couple of years is a much more normal operating environment than we’ve seen in seven or eight years,” he said. “What has happened over that intervening period of time is that the inventory of mall space per capita in Canada has declined by 20 per cent.
“That’s a function of both the demolition and redevelopment of some malls, but also the absence of any new construction or competition. So we feel like we’re pretty well-positioned.”
Primaris is in a unique place as a public company with a mandate to acquire enclosed malls, large assets with price tags at least as large as Conestoga Mall.
“It’s a platform type of investment where having one mall isn’t a terribly good business strategy,” Avery said. “You need to have multiple locations and relevance to retailers to build the platform to manage the assets.”
Primaris won’t develop anything more than two storeys as it sticks to its core asset class of enclosed shopping centres to maximize returns.
Primaris owns about 1,000 acres of land, with most properties in the 40- to 70-acre range, that it will consider selling. It’s currently selling three parcels and will use the proceeds for acquisitions or buying back stock at a discount to NAV.
Source Real Estate News Exchange. Click here to read a full story
Available units: #218 – 1,248 SF – $11.00 psf + $19.01 TMI psf #221 – 777 SF ̵ ...
Available area: 595 SF Lease rate: $1,800.00 Net Lease Located in Toronto’s upscale Leaside ne ...
Available area: 783 Sq Ft Asking Price: $300,000.00 An exclusive business opportunity awaits in Pete ...
Available area: 1,124 SF Lease rate: $17.00 Net Lease Perfectly located near the 401 with easy trans ...
Available area: 755 SF Lease rate: $1,800 Gross Lease CLICK HERE TO DOWNLOAD THE BROCHURE Prime Scar ...
Available area: 638 SF Lease rate: $1,700 Gross Lease CLICK HERE TO DOWNLOAD THE BROCHURE Prime Sc ...
Lease price: $23.50 Sq Ft Net + $17.68/2023/T.M.I. Available area: 3,901 Sq Ft 1,820 Sq Ft Elevate y ...
Size: 1.14 acres Currently has a commercial building whihc is built out for Resteraunt/Banquethall/ ...
Toronto Commercial Properties
Stephen & Mariya Lilly
Brokers
Office: 416-494-7653
Mariya Cell: 416-824-5078
Stephen Cell: 416-802-4228
Locations
RE/MAX Hallmark Realty Ltd., Brokerage
685 Sheppard Avenue East Suite 401, Toronto
Riverdale Office
RE/MAX Hallmark Realty Ltd.
630 Danforth Ave
Toronto, ON M4K 1R3
Office: (416) 462-1888
Fax: (416) 462-3135
Leslieville Office
RE/MAX Hallmark Realty Ltd.
785 Queen Street East
Toronto, ON
M4M 1H5
Office: (416) 465-7850
Fax: (416) 463-7850
Bayview Village Office
RE/MAX Hallmark Realty Ltd.
685 Sheppard Avenue East
Suite 401
Toronto, ON
M2K 1B6
Office: (416) 494-7653
Fax: (416) 494-0016
The Beach Office
RE/MAX Hallmark Realty Ltd.
2277 Queen Street East
Toronto, ON
M4E 1G5
Office: (416) 699-9292
Fax: (416) 699-8576
College Street Office
RE/MAX Hallmark Realty Ltd.
968 College Street
Toronto, ON
M6H 1A5
Office: (416) 531-9680
Fax: (416) 531-0154
Merton Office
RE/MAX Hallmark Realty Ltd.
170 Merton Street
Toronto, ON
M4S 1A1
Office: 416-486-5588
Fax: 416-486-6988
Richmond Hill Office
RE/MAX Hallmark Realty Ltd.
9555 Yonge Street, Suite 201
Richmond Hill, ON
L4C 9M5
Office: (905) 883-4922
Fax: (905) 883-1521
Newmarket Office
RE/MAX Hallmark York Group Realty Ltd.
25 Millard Ave West Unit B
Newmarket, ON
L3Y 7R5
Office: (905) 727-1941
Fax: (905) 841-6018
Ajax Office
RE/MAX Hallmark First Group Realty
314 Harwood Ave. South, Suite 200
Ajax, ON
L1S 2J1
Office: (905) 683-5000
Fax: (905) 619-2500
Pickering Office
RE/MAX Hallmark First Group Realty
1154 Kingston Road
Pickering, ON
L1V 1B4
Office: (905) 831-3300
Fax: (905) 831-8147
Whitby Office
RE/MAX Hallmark First Group Realty
304 Brock Street South, 2nd Floor
Whitby, ON
L1N 4K4
Office: (905) 668-3800
Fax: (905) 430-2550
Oakville Office
RE/MAX Hallmark Realty Ltd.
515 Dundas Street West
Oakville, ON
L6m 4M2
Office: 905-257-7500
Bayfield Head Office
RE/MAX Hallmark Chay Realty
152 Bayfield Street
Barrie, ON
L4M 3B5
Office: (705) 722-7100
Toll Free: (866) 606-2429
Fax: (705) 722-5246
Caplan Office
RE/MAX Hallmark Chay Realty
112 Caplan Avenue
Barrie, ON
L4N 9J2
Office: (705) 722-7100
Toll Free: (866) 606-2429
Fax: (705) 735-6980
Caplan Office
RE/MAX Hallmark Chay Realty
112 Caplan Avenue
Barrie, ON
L4N 9J2
Office: (705) 722-7100
Toll Free: (866) 606-2429
Fax: (705) 735-6980
Innisfil Office
RE/MAX Hallmark Chay Realty
2095 Thompson Street
Innisfil, ON
L9S 1T1
Office: (705) 431-7100
Toll Free: (888) 822-2606
Fax: (705) 431-7667
Alliston Office
RE/MAX Hallmark Chay Realty
20 Victoria St W Box 108
Alliston, ON
L9R 1T9
Office: (705) 435-5556
Toll Free: (866) 936-3500
Fax: (705) 435-5356
Tottenham Office
RE/MAX Hallmark Chay Realty
22 Queen St S Box 636
Tottenham, ON
L0G 1W0
Office: (905) 936-3500
Toll Free: (866) 936-3501
Fax: (905) 936-5356
Bradford WG Office
RE/MAX Hallmark Chay Realty
4-450 Holland Street
Bradford, ON
L0G 1W0
Office: (905) 778-0292
Toll Free: (866) 606-2429
Fax: (705) 722-5246
Innes Office
RE/MAX Hallmark Realty Group
Unit# 200 4366 Innes Road
Ottawa, ON
K4A 3W3
Office: (613) 590-3000
Carling Office
RE/MAX Hallmark Realty Group
Unit# 101 2255 Carling Avenue
Ottawa, ON
K2B 7Z5
Office: (613) 596-5353
Ottawa Downtown Office
RE/MAX Hallmark Realty Group
344 O'Connor Street
Ottawa, ON
K2P 1W1
Office: (613) 563-1155
Ottawa Central Office
RE/MAX Hallmark Realty Group
610 Bronson Avenue
Ottawa, ON
K1S 4E6
Office: (613) 236-5959
Kanata Office
RE/MAX Hallmark Realty Group
700 Eagleson Road
Ottawa, ON
K2M 2G9
Office: (613) 663-2720
Fax: (613) 592-9701
Richmond Office
RE/MAX Hallmark Realty Group
6159 Perth Street
Ottawa, ON
K0A 2Z0
Office: (613) 838-4040
Fax: (613) 596-4495
Greenbank Office
RE/MAX Hallmark Realty Group
100-1073 Greenbank Rd
Ottawa, ON
K2J 4H8
Office: (613) 596-5353
Fax: (613) 596-4495
Ajax
513 Westney Road South
Ajax, ON
L1S 6W8Office: 905-683-5000
Fax: 905-619-2500
Alliston
20 Victoria St W Box 108
Alliston, ON
L9R 1T9Office: 705-435-5556
Fax: 705-435-5356
Angus
2 Summerset Place
Angus, ON
L0M 1B2Office: 705-424-7200
Fax: 705-424-6940
Re/Max Hallmark Trends Group Realty
15004 Yonge Street
Aurora, ON
L4G 1M6Office: 905-727-1941
Fax: 905-841-6018
Aurora
15004 Yonge Street
Aurora, ON
L4G 1M6Office: 905-727-1941
Fax: 905-841-6018
Re/Max Hallmark Lind Group Realty Ltd.
15105 Yonge Street
Aurora, ON
L4G 1M3Office: 905-841-0000
Fax: 905-727-2230
Re/Max Hallmark Peggy Hill Group Realty
374 Huronia Rd.
Barrie, ON
L4N 8Y9Office: 705-739-4455
Fax:
Bayfield
152 Bayfield Street
Barrie, ON
L4M 3B5Office: 705-722-7100
Fax: 705-722-5246
Caplan
112 Caplan Avenue
Barrie, ON
L4N 9J2Office: 705-722-7100
Fax: 705-735-6980
Chilton Team
152 Bayfield Street
Barrie, ON
L4M 3B5Office: 705-722-7100
Fax: 705-722-5246
Bradford WG
450 Holland Street Unit 4
Bradford, ON
L3Z 0G1Office: 905-778-0292
Fax: 705-722-5246
Innisfil
2095 Thompson Street
Innisfil, ON
L9S 1T1Office: 705-431-7100
Fax: 705-431-7667
Re/Max Hallmark Ciancio Group Realty
190 Main Street Suite 203
Markham, ON
L3R2G9Office: 647-247-6000
Fax: 647-429-6100
Bayview Village
685 Sheppard Avenue East, Suite 401
North York, ON
M2K 1B6Office: 416-494-7653
Fax: 416-494-0016
Innes
4366 Innes Road Suite 200
Ottawa, ON
K4A 3W3Office: 613-590-3000
Fax: 613-590-3050
Carling
2255 Carling Avenue Suite 101
Ottawa, ON
K2B 7Z5Office: 613-596-5353
Fax: 613-596-4495
O'Connor
344 O'Connor Street
Ottawa, ON
K2P 1W1Office: 613-563-1155
Fax: 613-563-8710
Bronson
610 Bronson Avenue
Ottawa, ON
K1S 4E6Office: 613-236-5959
Fax: 613-236-1515
Richmond
6159 Perth Street
Ottawa, ON
K0A 2Z0Office: 613-838-4040
Fax: 613-596-4495
Greenbank
100-1073 Greenbank Rd
Ottawa, ON
K2J 4H8Office: 613-596-5353
Fax: 613-596-4495
Kanata
105-700 Eagleson Rd.
Ottawa, ON
K2M 2G9Office: 613-663-2720
Fax: 613-592-9701
RE/MAX Hallmark Pilon Group Realty
4366 Innes Road Suite 200
Ottawa, ON
K4A 3W3Office: 613-909-8100
Fax: 613-590-3079
RE/MAX Hallmark Jenna & Co. Group Realty
2255 Carling Avenue, Suite 101A
Ottawa, ON
K2B 7Z5Office: 613-596-4300
Fax: 613-596-4495
Re/Max Hallmark Jacki Lam Group Realty
1154 Kingston Road
Pickering, ON
L1V 1B4Office: (905) 831-3300
Fax: (905) 831-8147
Pickering
1154 Kingston Road
Pickering, ON
L1V 1B4Office: 905-831-3300
Fax: 905-831-8147
Richmond Hill
9555 Yonge Street, Suite 201
Richmond Hill, ON
L4C 9M5Office: 905-883-4922
Fax: 905-883-1521
Riverdale
724 Pape Avenue
Toronto, ON
M4K 3S7Office: 416-462-1888
Fax: 416-464-3135
The Beach
2277 Queen Street East
Toronto, ON
M4E 1G1Office: 416-699-9292
Fax: 416-699-8576
Yonge
3434 Yonge Street
Toronto, ON
M4N 2M9Office: 416-489-3434
Fax: 416-489-5445
College
968 College Street
Toronto, ON
M6H 1A5Office: 416-531-9680
Fax: 416-531-0154
Mount Pleasant
723 Mount Pleasant Road
Toronto, ON
M4S 2N4Office: 416-486-5588
Fax: 416-486-6988
Leslieville
785 Queen Street East
Toronto, ON
M4M 1H5Office: 416-465-7850
Fax: 416-463-7850
Re/Max Hallmark Batori Group Inc.
357 Eglinton Ave W
Toronto, ON
M5N1A3Office: 416-485-7575
Fax: 416-484-4448
Re/Max Hallmark Ari Zadegan Group Realty
3434 Yonge Street Suite 101
Toronto, ON
M4N2N9Office: 416-489-4287
Fax: 416-352-0118
Re/Max Hallmark Estate Group Realty Ltd
2277 Queen Street East Suite A
Toronto, ON
M4E1G5Office: 416-699-2992
Fax: 416-699-8576
Re/Max Hallmark Bibby Group Realty
723 Mount Pleasant Road Suite 105
Toronto, ON
M4S2N4Office: 416-481-0888
Fax: 416-486-6988
Re/Max Hallmark Corbo & Kelos Group Realty Ltd
785 Queen St. East Suite 301
Toronto, ON
M4M1H5Office: 416-462-4787
Fax: 416-463-7850
Re/Max Hallmark Elite Group Realty
685 Sheppard Avenue East, Suite 401-11
Toronto, ON
M2K1B6Office: 416-494-8557
Fax: 416-494-7653
Re/Max Hallmark Emerson Group Realty Ltd
2277 Queen Street East Suite 104
Toronto, ON
M4E1G5Office: 416-690-2727
Fax: 416-699-8576
Re/Max Hallmark Francis Group Realty
785 Queen St. East Suite 7
Toronto, ON
M4M1H5Office: 416-466-1888
Fax: 416-463-7850
Re/Max Hallmark Fraser Group Realty
685 Sheppard Avenue East, Suite 401-47
Toronto, ON
M2K1B6Office: 416-494-7686
Fax: 416-494-0016
Re/Max Hallmark Joy Verde Group Realty
723 Mount Pleasant Road Suite 104
Toronto, ON
M4S2N4Office: 416-481-5666
Fax: 416-486-6988
Re/Max Hallmark Kathy McLachlan Group Realty Ltd
723 Mount Pleasant Road Suite 103
Toronto, ON
M4S2N4Office: 416-486-6565
Fax:
Re/Max Hallmark Montano Group Realty
785 Queen St. East Suite 201
Toronto, ON
M4M1H5Office: 416-424-3038
Fax: 416-465-7850
Re/Max Hallmark Pierre Carapetian Group Realty
785 Queen St. East
Toronto, ON
M4M1H5Office: 416-424-3434
Fax: 416-465-7850
Re/Max Hallmark Richards Group Realty Ltd
2241 Queen Street East
Toronto, ON
M4E1G1Office: 416-699-0303
Fax: 416-699-8576
Re/Max Hallmark Yu Group Realty Ltd
685 Sheppard Avenue East, Suite 401-19
Toronto, ON
M2K1B6Office: 416-494-9858
Fax: 416-494-0016
Muskoka
C/O Yonge St. Office (3434 Yonge Street)
Toronto, ON
M4N 2M9Office: 416-489-3434
Fax: 416-489-5445
Re/Max Hallmark Jamie Dempster Group Realty
685 Sheppard Avenue East, Suite 401
Toronto, ON
M2K1B6Office: (416) 494-7653
Fax: (416) 494-0016
Tottenham
22 Queen St S Box 636
Tottenham, ON
L0G 1W0Office: 905-936-3500
Fax: 905-936-5356
Re/Max Hallmark Lino Arci Group Realty
3420 Major Mackenzie Dr Suite 103
Vaughan, ON
L4H4J6Office: 416-479-1550
Fax: 416-913-2044
Whitby
304 Brock Street South
Whitby, ON
L1N 4K4Office: 905-668-3800
Fax: 905-430-2550
Terms & Conditions and Privacy Policy
All information displayed is believed to be accurate but is not guaranteed and should be independently verified. No warranties or representations are made of any kind. Not intended to solicit properties currently listed for sale. The trademarks REALTOR®, REALTORS® and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA. The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by CREA and identify the quality of services provided by real estate professionals who are members of CREA.