A joint venture headed by Gazit Globe (GZT-TYA) has an agreement to purchase the York Mills Centre office complex in Toronto for approximately $250 million, the Israeli-based company announced Wednesday morning.
The new ownership group includes Gazit’s recently announced Canadian partnership with Dori Segal’s Gazit TripLLLe Canada, as well as an unnamed, private Toronto-based real estate investment firm. The Gazit entities will own 66.7 per cent of the centre, while the Toronto firm will hold the remaining 33.3 per cent.
The transaction is expected to close prior to year-end, subject to customary conditions.
In addition, Gazit TripLLLe Canada announced it has purchased three other low-rise commercial properties in urban locations in Toronto for a total of approximately $23 million.
The York Mills Centre
The York Mills Centre property is a low-rise office complex with approximately 570,000 leasable square feet, situated on 6.7 acres of land. It includes a 35,000-square-foot retail component.
The property is located in midtown Toronto, at the intersection of Yonge Street and York Mills Road, atop the York Mills subway station. It also has direct access to two bus terminals with more than 20 regional and local lines, and a nearby connection to Highway 401.
The property is 94 per cent leased, with a weighted average lease term of 8.4 years, anchored by “strong creditworthy tenants” such as Royal Bank of Canada and property developer, owner and manager Minto Group.
Building amenities include a GoodLife Fitness centre, restaurants and numerous medical offices.
The complex was built between 1985 and 1992 by York Trillium Development Group and has been owned and operated by Manulife since it purchased the property in 2011 from Ivanhoé Cambridge. The reported purchase price at that time was $161 million.
The North Yonge corridor
The North Yonge corridor is a growing, transit-oriented area. In Gazit’s release announcing the sale, it reports there are seven active and more than 10 proposed condo development projects slated for the area, totaling over 7,000 units.
Directly across the street from the property, there is a proposed mixed-use development planned to comprise 430,000 square feet of residential, commercial and retail.
The population within three kilometres and five kilometres of the property is approximately 82,000 and 347,000, respectively. That is expected to grow by 15 per cent during the next 10 years.
The average annual household income within three kilometres and five kilometres of the property is approximately $147,000 and $143,000, respectively.
The partnership expects to leverage the property with a 10-year secured mortgage at a loan-to-value ratio of 60 per cent.
About Gazit Globe
Gazit Globe is a global real estate company focused on the ownership, management and development of income-producing properties in densely populated urban areas in North America, Brazil, Israel, Northern, Central and Eastern Europe.
As of Sept. 30, 2019, Gazit Globe owned and operated 101 properties, with a gross leaseable area of approximately 26 million square feet and a total value of approximately $14.1 billion.