Harden will take over property management and leasing responsibilities for 18 RioCan REIT Quebec retail properties on July 1.
The 18 properties comprise the REIT’s entire Quebec portfolio, outside of Gatineau, and have up until now been managed by RioCan (REI-UN-T). The assets are largely grocery-anchored, service-oriented, unenclosed centres located in the Montreal area that had an occupancy rate of 95.2 per cent at the end of 2021.
Harden was already responsible for the management, leasing and redevelopment of the 171,022-square-foot Les Galeries Lachine enclosed shopping centre in Montreal. The firm had acquired a 50 per cent stake in Les Galeries Lachine and the LaSalle Carnival Centre from RioCan in December 2019.
Harden and RioCan subsequently sold the 15-acre LaSalle property to Brivia Group last year.
“They (Harden) know the Quebec market so well and they bring to the table a very strong team and produce very high-quality retail from all angles, be it on the leasing side and their relationships, to their relationships with local contractors and architects, and knowing what those communities need,” RioCan chief operating officer John Ballantyne told RENX.
“We’re now focused on improving the quality of those locations, both aesthetically and with the tenant mix so it makes them that much better to extract that much more growth. The Quebec portfolio is very similar to the remainder of our portfolio in that we want to reinvest and make it more community-friendly and we also want to play with the tenant mix.
“While we’re 95 per cent occupied now, we want that to go up, but we also want to change the tenant mix to make it more synergistic and drive growth.”
Harden, RioCan consider intensification
Harden could also potentially play a role in adding value to the properties through intensification – adding a residential or additional commercial component since its also develops retail, industrial and multiresidential properties.
“Absolutely nothing is broken in these centres by any means. They were very resilient through the pandemic, but we feel there’s an opportunity to realize more growth,” Ballantyne said. “That’s what Harden brings to the table.
“They’ll be able to deal with local expertise and know what the communities want for each of these centres. They’ll also know where there are opportunities to maybe do something different with some of the sites as well, on the intensification side.”
The agreement with RioCan will be Harden’s first third-party property management arrangement.
“This is a first for Harden because we’re developers and owners of real estate and we’ve always basically built ourselves,” Harden co-chief executive officer Tyler Harden told RENX. “This was an opportunity whereby we felt there was a lot of opportunity in this portfolio in Quebec.
“They want to continue making investments in Quebec, so there’s an alignment to do so with them.”
RioCan also recently agreed to sell a 50 per cent interest in Mega Centre Notre-Dame in Laval, Que. to Harden for $34.5 million. The property has more than 500,000 square feet of gross leasable area and the transaction is expected to close soon.
RioCan owns, manages and develops retail-focused, increasingly mixed-use properties in high-density, transit-oriented areas. Its portfolio was comprised of 207 properties with an aggregate net leasable area of approximately 36.4 million square feet — including office, residential rental and 13 development properties — as of Dec. 31.
Harden multi-faceted, vertically integrated
Harden was established in 1985 and is a second-generation, family-owned real estate company primarily focused on owning and operating commercial, residential and industrial properties in Quebec and Eastern Ontario communities.
The vertically integrated operation has more than 70 employees and specializes in development, construction, leasing and property management.
Harden owns and operates more than five million square feet of net leasable commercial space. The Vaudreuil-Dorion, Que.-headquartered company has approximately two million square feet of industrial and 500,000 square feet of commercial space, as well as more than 2,000 residential units, in various stages of development.
Harden’s major project at the moment is Solstice, a 44-storey condominium at 1275 Avenue des Canadiens-de-Montréal beside the Bell Centre in downtown Montreal. It will also have approximately 2,900 square feet of commercial space, including an exterior patio of around 1,200 square feet.
The residential units are 94 per cent sold and construction is up to the 32nd floor. The goal is to turn the building over to residents in the first quarter of 2023.
“We invest a lot in communities and feel it’s important to give back to those communities,” said Harden. “That’s a big part of our family’s values and our company’s values.
“That’s how we approach each project and in our work day to day: looking at the beneficial social and environmental impacts that we can have.”