Downtown Toronto’s The Well is about to get a significant new tenant, with co-owners Allied Properties REIT (AP-UN-T) and RioCan REIT (REI-UN-T) announcing this morning the lease of four additional floors in the multi-tower, mixed-use downtown complex.

The announcement was one of two made by RioCan Tuesday morning, with the trust also providing a brief synopsis of its 2026 strategic priorities prior to its investor day presentation. It is promoting a “simplified, retail-focused strategy,” which is to include up to $1.4 billion in capital recycling.

Although the new tenant at The Well has not been identified, Allied and RioCan reported the lease involves 124,235 square feet of office space on the third through the sixth floors at 460 Front St. W. The lease runs through 2037, and also includes exclusive signage rights on the south-facing facade of the tower.

Allied and RioCan did state the company involved is Canadian.

“As a result of this and other office leasing activity, the office space available for sublease at The Well has declined to 10 per cent,” the announcement states. “Along with the accelerating lease-up of modern office space at nearby Portland Commons, this will bring thousands of new knowledge workers to King West Village, continuing its transformation into a core office node in downtown Toronto.”

The announcement builds on a strong Q3 for office leasing in Toronto. The downtown recorded one of its best quarters in years, with the vacancy rate dropping 150 BPS to 17 per cent thanks to 1.5 million square feet of positive net absorption, according to CBRE’s Canada Office Figures Q3 2025 report. Citywide vacancy rate for all classes dipped 90 BPS to 18.9 per cent, with 1.6 million square feet of absorption.

The Well and King West Village

The Well is one the largest developments in Toronto in recent years, sitting on a 7.7-acre property which includes retail, commercial and residential spaces. It was designed to accommodate approximately 11,000 residents and workers, in 1.2 million square feet of office space, 320,000 square feet of retail and food space, and 1,700 residential units.

There are six condo and rental buildings within the project, plus one office tower and an expansive three-story retail and commercial base.

The King West Village area is particularly important to Allied, which owns and operates just over 2.3 million square feet of office space in the district, comprised of:

• 1,471,555 square feet within its Allied Modern portfolio;
• 594,254 square feet in its Allied Heritage portfolio; and 
• 248,916 square feet which it designates as Allied Flex space. 

Allied also owns 323,027 square feet of storefront retail space in King West Village in addition to its share of retail space at The Well.

The mixed-use, amenity-rich neighbourhood is bounded by Front to the south, Spadina to the east, Richmond to the north and Bathurst to the west.

RioCan's strategic priorities

RioCan’s strategic priorities, meanwhile, will focus on simplifying its strategy to focus on its core portfolio, according to the outlook being presented today at its investor day webcast.

“RioCan’s strategy is anchored in the strength of our core retail platform and our commitment to durable growth,” RioCan president and CEO Jonathan Gitlin said in a pre-event announcement. “Fuelled by our strong retail portfolio where Canadians shop every day, we enter our next phase of growth with confidence and momentum. 

“RioCan is structurally positioned to deliver core FFO per unit growth of five per cent over the long term, and 3.5 per cent from 2026 to 2028. We remain focused on maintaining a strong balance sheet, generating predictable high-value cash flows and creating lasting value for our unitholders.”

RioCan’s core FFO represents income generated by its retail portfolio, and excludes other sectors including condominium profits and HBC-JV related income.

RioCan expects to achieve its long-term, five per cent annual core FFO growth via:

• commercial same property NOI growth of at least 3.5 per cent, reflecting retail leasing demand and contractual rent escalations; and
• 1.5 per cent per unit growth from “disciplined” capital allocation including retained cash flows and up to $1.4 billion of proceeds from the sale of non-core assets.

Due to near-term refinancing, the per-unit annual growth between 2026-2028 is expected to be reduced approximately 1.5 per cent, the announcement states.