First, Allied and Westbank announced they are moving forward with the development of a mixed-use downtown property at 19 Duncan St. after revising their plans earlier this year.
In a separate announcement, Allied also said it has purchased 70 The Esplanade, adding to a significant portfolio of properties it owns along that downtown Toronto block.
The site at 19 Duncan includes 24,803 square feet of land, with 111 feet of frontage on Duncan Street and 250 feet of frontage on Adelaide Street West.
The decision to move forward with 19 Duncan also allows Allied and Westbank to expand a relationship which, according to Allied Properties president and CEO Michael Emory, is working very well on several fronts.
“It is proving to be a productive and successful collaboration between two different organizations — one a public REIT and the other a private developer — that share a common vision for city-building in major urban centres,” Emory told RENX.
The 19 Duncan development includes a new 57-storey tower which will be built to incorporate an existing heritage office building, originally known as the Southam Press Building. Constructed in 1908, the Southam building has 62,000 square feet of gross leasable area.
“Integrating heritage buildings with new structures is something Allied and Westbank believe makes for better city-building,” Emory said. “Done correctly, it also makes for decidedly more interesting and beautiful buildings.”
Office, retail and rental apartments
19 Duncan’s integrated buildings will be comprised of approximately 146,000 square feet of office space, 21,000 square foot of retail and 462 residential rental units.
“Allied and Westbank continue to believe it’s the optimal use of this particular piece of land, both economically and socially,” said Emory, who declined to reveal more specific details about the three components.
The structure has been designed to a LEED Core and Shell Gold standard. Construction is expected to start this year.
The office space has been pre-leased to an unidentified user. The apartments won’t be leased until the structure is completed, which is scheduled for early 2021.
Allied will manage the office and retail components, while Westbank will manage the residential component.
City of Toronto recommended changes
The City of Toronto‘s planning department released a report earlier this year that recommended changes to the way some heritage aspects were handled and also sought changes to the tower. It was designated a heritage property in December 2016, more than a year-and-a-half after Allied and Westbank’s proposal was first submitted.
“The office component was enlarged and reconfigured with a view to providing even better urban work space,” said Emory.
Toronto-based Allied is an owner, manager and developer of office environments and specializes in the adaptive reuse of light industrial structures in urban areas.
Vancouver-based Westbank has more than $25 billion of residential, office, retail and hotel projects either completed or under development in Canada and the United States.
Allied purchases 70 The Esplanade
Allied announced on Monday it had entered into an agreement to acquire 70 The Esplanade in Toronto for $17 million in cash from a private family ownership group. The property is immediately adjacent to 56 The Esplanade, which Allied purchased in June.
The new acquisition was built in 1880 to manufacture flour milling equipment and has been renovated and retrofitted over the past three decades.
It includes 6,109 square feet of retail at grade subject to a long-term lease with the recently renovated and expanded Bier Markt. Above that, there’s 19,590 square feet of office space. The building is 88 per cent leased.
Allied now has an assembly of seven income-producing buildings comprised of 35 to 49 Front St. E. and 56 to 70 The Esplanade that includes 227 feet of uninterrupted frontage on the south side of Front Street and 251 feet of uninterrupted frontage on the north side of The Esplanade.
The one- and two-storey buildings from 41 to 49 Front St. E. and at 56 The Esplanade have no heritage value and can be replaced with new structures which can be integrated with the heritage components of the assembly.
Allied doesn’t expect to pursue this intensification opportunity in the near term.
Changes to King Portland Centre development
Allied and RioCan REIT (REI.UN-T) also announced changes to the residential component of their King Portland Centre mixed-used development in downtown Toronto at the corner of King Street West and Portland Avenue last week.
Instead of building approximately 133 rental apartments as originally intended, the partners will now sell them as condominium units. The suites are expected to be offered for sale in Q4 2017, with residents taking possession in early 2019.
“The decision to sell the residential portion as condominium accelerated following the recent regulatory changes to the rental residential market in Ontario,” RioCan chief executive officer Ed Sonshine said in a media release. “We fully expect that the sale of these units, that are already under construction, will be very well- received in the market and generate significant gains for the venture.”
King Portland Centre includes approximately 59,000 square feet of office and retail space in a heritage structure at 602 and 604 King St. W. that’s fully occupied.
It will incorporate approximately 256,000 square feet of incremental office space which is under development and is 93 per cent pre-leased to Shopify and Indigo Books and Music. It will also include 13,000 square feet of incremental retail fronting on King Street West.