Greybrook Realty Partners and Tribute Communities have partnered to purchase a 2.17-acre property along Toronto’s The Queensway for $40 million. The two companies are in preliminary planning stages to build a twin-tower, 37-storey condo development connected by a podium of up to 11 storeys at the site.
Greybrook has 85 per cent of the equity in the property, while Tribute Communities owns the remainder.
The acquisition is debt-free, Sacha Cucuz, the chief executive officer of Greybrook Securities and a partner in Greybrook Capital, said during an interview with RENX.
Greybrook raised $43.46 million for its new Greybrook Queensway III Limited Partnership. Cucuz said the balance of the money from the offering will be used for pre-construction soft costs, including planning, designing and marketing.
The parcels of land at 1325 and 1361 The Queensway are currently occupied by commercial businesses such as Hakim Optical, Mister Transmission, Queensway Auto Service Experts and Vanquish Car Care. Cucuz declined to identify the vendor.
Mixed-use development planned
While Cucuz said it’s still early and not many details are confirmed, preliminary plans are for two 37-storey condominium towers connected by a podium of from six to 11 storeys.
The average size of the units is anticipated to be approximately 671 square feet, with some two- and three-bedroom suites.
The project is expected to be built in two overlapping and essentially identical phases, each comprised of approximately 550 suites and 5,000-square-foot, ground-level commercial components.
Amenities haven’t been finalized, but are expected to include gym and swimming pool facilities.
Westhall Limited Partnership will be the development and construction manager.
While the Queensway property is zoned for mixed-use, it will require a zoning by-law amendment, site plan approval, plan of condominium approval and building permits. Cucuz believes it could take from 18 months to two years to get the zoning by-law amendments.
Queensway and Kipling location
The Queensway property is located just west of Kipling Avenue and is on the western edge of an area that’s experienced an influx of new condo projects in recent years. There are also a number of other proposed developments in the area.
Grocery stores, banks, gas bars and gyms are within walking distance or a short drive of the property, which is also within a short drive of CF Sherway Gardens, Cineplex Cinemas Queensway and VIP, IKEA, Best Buy, Costco and Home Depot.
The property is close to Toronto Transit Commission bus routes and 3.5 kilometres from the Kipling subway and GO Transit stations. The Gardiner Expressway, which is easily accessible from the property via Kipling Avenue, connects with highways 427, 401, 407 and the Queen Elizabeth Way.
More than 100,000 jobs are within a 20-minute drive of the property.
The project is likely to appeal to first-time homebuyers, move-up buyers seeking larger units than are offered in other areas of the city, and downsizers looking to move to more affordable areas.
Greybrook also owned a nearby property at 36 Zorra St. which it sold to Altree Developments. Altree is now in the pre-construction phase for the 35-storey Thirty Six Zorra condo, which sold more than 300 suites in its first two months on the market.
“We have a lot of prior experience in this node,” said Cucuz, who believes the area offers a great value proposition for both condo investors and end-users. “In the epicentre of Toronto, you’re seeing prices of $1,400 a square foot and above. I think this area gives you an option that is more affordable for people.”
Greybrook and Tribute partnership
Greybrook’s real estate investment portfolio includes more than 70 developments and assets across Canada and the United States. They comprise 35 million square feet of residential and commercial density with an estimated gross development value of $15 billion.
Tribute is a large builder and fully integrated developer of residential communities. It has built more than 30,000 homes across Southern Ontario over the past 35 years and has an inventory of major land holdings in and around the Greater Toronto Area.
“We have a really great relationship with Tribute and have had one for a long time,” said Cucuz, who noted the two companies have done about 10 deals together. “They share the same philosophy around the value of these areas.
“We own a site with them at Main and Danforth, which is obviously nowhere near Queensway and Kipling, but it has the same thesis. It’s a little bit out of the centre, near transit, and has a much more affordable price point.”
Cucuz said Tribute’s acquisitions team is active in trying to procure development opportunities, which led to this latest partnership.
“Tribute had worked toward making a deal with the vendor and came to an agreement, and basically asked if we’d like to partner with them as we have many times in the past. We were more than keen to do that.”
Greybrook and COVID-19
Most Greybrook employees are working from home and communicating with each other through conference calls in order to try to prevent the spread of the COVID-19 virus. While the firm is still fine, Cucuz said the situation is having an effect on some of its plans.
“The city’s closed, so for any projects that don’t have permits and things like that, you’re not going to get them in the near term. You’re obviously not moving any applications forward.
“Right now, construction is still operational on all the sites where we have construction. But. you have to prepare for a situation where construction has to stop, so we’re making sure to take all of the precautions at the project level with everything we have.”
Despite these slowdowns and potential delays, Cucuz remains optimistic about Greybrook’s future prospects and the continued growth of the multifamily sector.
“We continue to believe, notwithstanding the particular circumstances of this moment in time with all that’s going on with COVID-19, that Toronto is and will continue to be a great place to invest in high-rise,” he said.