Five years ago, Allied Properties REIT discovered a winning formula – forming joint ventures with other real estate companies.
“What we realized was that we had so much opportunity inherent in our existing portfolio that the best way to take advantage of it in terms of managing risk and achieving the best possible outcomes was to collaborate with other best-in-class organizations,” explained Michael Emory, president and CEO of the Toronto-based company (AP.UN-T).
“So JVing with RioCan (REI.UN-T) brings us tremendous retail expertise, JVing with Westbank brings us tremendous residential expertise, both in the condo and rental apartment area. It has definitely become a way for us to do more and to manage the risk associated with doing more development.”
Allied, which is currently working on five joint ventures, has imposed a 15 per cent maximum on development relative to its book value. Therefore, bringing in joint venture partners allows it to enter more new projects.
Collaborating with Westbank
Allied currently has three joint ventures with Westbank Corp., which is headed up by developer Ian Gillespie.
The first was Telus Sky, a 66-storey mixed-use tower of office, retail and residential space that is backed by Allied, Westbank and Telus. The Calgary skyscraper currently under construction is slated for delivery in early 2018.
The Allied-Westbank alliance also includes 19 Duncan St. in Toronto’s entertainment district, a brick and beam heritage building that will feature a new tower at the back of the building for rental-residential and is expected to be completed in 2019.
Most recently, Allied purchased a “big piece of underdeveloped property” at King and Spadina in Toronto (511-539 King St.). It has been integrated with the adjacent property at 489 to 599 King St. for a single site that will host retail, office “and a lot of condo residential.”
Allied and Westbank will have plenty of space to work with as the King & Spadina JV will have 620 feet of frontage on King St..
“I think what is happening in the real estate industry, with the intensification of the inner cities and land being so valuable, the only way to optimize the land is to pursue a well-conceived mixed-use vision,” said Emory.
“That is really forcing different organizations to collaborate. Some organizations can do everything but the best organizations tend to have specialization.”
Other JVs in the works
Allied has a 50-50 joint venture in Toronto at King and Portland with RioCan REIT a mixed-use office, retail and residential complex with up to 220,000 square feet of office, 110,000 sq. ft. of new residential space and 20,000 sq. ft. of retail.
The King and Portland development located at 602-620 King St. West is a project that “Again integrated with a heritage building that Allied acquired years and years ago,” said Emory.
The partners are now actively pre-leasing the office component on the corner of Front of Spadina which is about 800,000 sq. ft.
The 7.7-acre development will include nearly one million sq. ft. of space across 15 buildings.
Michael Emory, Canada’s Design Thinker of the Year
Emory was recently named a co-winner of Canada’s DesignThinkers of the Year by the Association of Registered Graphic Designers.
The Allied REIT chief said he was nominated by one of its graphic designers, Whitman Emorson, which touted Allied’s quarterly Block magazine and its recently completed QRC West building at 134 Peter St., Allied’s new headquarters.
Emory is a proud of Allied’s accomplishment when it comes to speaking of QRC West.
“What we did was actually built a new 250,000-square-foot structure on top of two existing structures. And the combination of old and new and the way we engineered the structure I think are both really interesting.”
QRC West plays a starring role in a short video featuring Emory.