The 24.34-acre site within the Sheridan Research Park at 2395 Speakman Dr. in south Mississauga, was purchased by First Gulf for an undisclosed price from Element in a short-term sale-leaseback in December. London-headquartered Element uses it as a materials testing laboratory specializing in construction products and assemblies.
Spear Street recently became a partner and the redevelopment project is already underway.
The existing building on the site is approximately 225,000 square feet and fully occupied. It has about 100,000 square feet of wet lab space and 40,000 square feet of office space, with the balance having industrial and storage uses. It will eventually be demolished and replaced.
“It’s an older building that has a ton of infrastructure in it and we just couldn’t wrap our mind around a program that would include a renovation,” First Gulf vice-president of strategic initiatives and operations Roman Brailovski told RENX.
“Nor are we certain that the market requires a building of this size. We believe that the campus will be better served by a newer product that’s more specialized.”
Plans for the life sciences campus
The entire property is being redeveloped by the partners into a campus that can accommodate up to 350,000 square feet of laboratory, office, innovation and technology space.
The initial phase will consist of approximately 145,000 square feet and is expected to be delivered in the southeast corner of the site in the Q4 2023 or Q1 2024.
Leasing demand will determine the timelines of following phases, according to Brailovski.
“We’re in the market for tenants right now and we’ve had some very productive conversations,” said Brailovski. “We’re trying to capture quite a bit of pent-up demand for new life sciences space in the market, but we would build the buildings on spec.”
Some other buildings in Sheridan Research Park incorporate life sciences facilities as a small portion of their overall use, according to Brailovski, but nothing to compare to what First Gulf and Spear Street are planning.
“Part of that urgency to market that we’re pushing is to ensure that we’re bringing this product to a very hungry market as soon as we can,” said Brailovski.
It’s expected that, upon completion of the life sciences campus, some buildings will likely have single tenants while others will have multiple tenants.
“Down the line, we wouldn’t object to having more of an incubator space,” said Brailovski, “or a kind of a lab-sharing space, which is becoming increasingly popular.”
How the partnership works
There was an existing relationship between senior executives of First Gulf and Spear Street, so partnership talks on the project began and progressed quickly until they closed in late May.
“Spear Street is the majority owner of the project,” said Brailovski. “They allocated resources to help move the project along.
“Our first goal is going to be as the developer, builder and property manager.”
Brailovski said both companies are highly entrepreneurial and have aligned philosophies and values, which makes them good partners.
First Gulf and Spear Street
Toronto-headquartered First Gulf is part of Great Gulf Group and a fully integrated development company that’s involved in all aspects of real estate development, including land acquisition, planning approvals, design-build, construction, leasing, financing and property management.
First Gulf has developed more than 30 million square feet of office, retail, industrial and mixed-use real estate and has assets valued at more than $5 billion.
Spear Street was founded in 2001 and has offices in San Francisco and New York City. It’s an owner, developer and operator of healthcare, research and technology-oriented properties in the United States, Canada and Europe.
Spear Street focuses on assets and portfolios valued at more than $25 million and targets properties it can help succeed through creative leasing efforts, physical improvements, entitlement changes or the realization of adaptive re-use strategies.
The company’s Canadian portfolio also includes: the 120,000-square-foot 510 West Hastings and the 77,300-square-foot 929 Granville Street in Vancouver; the 367,000-square-foot O Mile-Ex and the 98,200-square-foot Tisserie 6750 in Montreal; the 356,000-square-foot The District at Beltline in Calgary; and the 630,000-square-foot Northfield Park in Waterloo, Ont.