BGO managing director and portfolio manager Ross Strowger told RENX the partnership grew out of an existing relationship with Hullmark president Jeff Hull. Their respective teams looked at ways they could work together because Hullmark had a niche in renovating and converting brick-and-beam assets while BGO was more downtown core office-focused.
Not every acquisition the firms make fits the mould for the partnership, but representatives of the two companies speak frequently about ways they can improve existing assets and expand the venture.
“We both bring different lenses to the table,” Strowger said of the partnership. “We bring more of an institutional lens and Jeff’s team is very entrepreneurial.”
The partnership has encompassed new acquisitions, repurposing of existing buildings and the construction of new assets.
The 250 Bowie Ave. acquisition
The most recent acquisition is a 7.7-acre site at 250 Bowie Ave. in Toronto’s Castlefield Design District near Eglinton Avenue West and Keele Street that’s occupied by a 263,000-square foot industrial and flex office complex.
The property was acquired for $100 million from a private ownership group, with BGO taking a 75 per cent share.
Canadian apparel company Canada Goose’s head office and manufacturing facilities are located on the site, along with signage, marketing, fitness and restaurant tenants.
A stop on the Eglinton Crosstown light rail transit line that’s under construction will be within easy walking distance.
Construction is expected to begin next year on the Caledonia GO Transit station that will be added to the Toronto-to-Barrie line and offer pedestrian access to Bowie Avenue.
While the 250 Bowie property is providing cash flow, there are longer-term plans for more intensification — probably mixed-use — to take advantage of the public transit access.
“We saw value in that area and were able to generate a yield,” said Strowger. “It’s a great story today and hopefully we can do more with it tomorrow.”
History of the BGO, Hullmark venture
Their first deal, in July 2016, involved BGO acquiring a 50 per cent interest in Toronto commercial properties at 545 King St. W., 619 Queen St. W., 100 Broadview Ave. and 60 Atlantic Ave. as well as development land at 80 Atlantic Ave., totalling 179,000 square feet, for $85 million.
BGO is a global real estate investment management advisor and provider of real estate services with expertise in the office, industrial, multiresidential, retail and hospitality sectors.
The company is part of SLC Management, the alternatives asset management business of Sun Life. It serves the interests of more than 750 institutional clients and had approximately $74 billion US in assets under management at the end of 2021.
Hullmark is a privately owned, Toronto-based real estate investment and development platform focused on cultural clusters and shaping urban neighbourhoods.
Other facets of the partnership
BGO sold a 50 per cent managing interest in 109 George St., which it originally acquired in 2006, to Hullmark in January.
The 49,000-square-foot, three-storey brick-and-beam office building in Toronto’s downtown east has a mix of tenants.
“There was some activity on neighbouring sites related to developments and we ended up securing a deal to dispose of the air rights,” said Strowger.
“Given the type of asset that it is, Hullmark seemed like the logical partner and operator for that site to us.”
BGO and Hullmark now have approximately 800,000 square feet of assets under management. The other parts of their partnership involve these deals:
– BGO acquired a stake in Radiator, a mixed-use, 87,000-square-foot office property on 1.85 acres of land on Dufferin Street south of Queen Street West in downtown Toronto’s west end, from Hullmark in December 2017.
– The two companies completed construction on 80 Atlantic, a mass-timber office building in Toronto’s Liberty Village neighbourhood.
Other BentallGreenOak partnerships
“From a strategic partnership perspective, the way that we approach it is that we definitely don’t focus on one-off partnerships,” said Strowger.
“We like to have partnerships that are programmatic to some extent and have the ability to expand and grow and symbiotically fit the needs of both groups.”
BGO is involved in several other strategic relationships with a mix of institutional and private partners, including Menkes, The Daniels Corporation, First Gulf, RioCan REIT and Healthcare of Ontario Pension Plan (HOOPP).
“They’re all very different, depending on what the groups do,” said Strowger.
“A group like RioCan is very much focused on retail, but they’re expanding into the residential side of the equation so there are ways that we fit into that world and both of those asset classes with them.
“Menkes was the developer of our One York location, which BGO has its office at and Sun Life has its head office at as well.”
Strowger stressed BGO’s partners must be aligned on asset strategies, return expectations and core values that focus on environmental, social and governance and equality, diversity and inclusion initiatives.