Europro is converting a 12-storey, 95,856-square-foot office building at 22 Frederick St. in downtown Kitchener to a purpose-built rental tower with more than 90 units.

The property is part of an eight-building, 1.1-million-square-foot office portfolio Europro acquired from Dream in 2017. Financial Horizons was a key tenant and, after it relocated, 22 Frederick was left with an occupancy rate of less than 40 per cent and an owner looking for options.

Vice-president of asset management and investment Jesse Nathanson told RENX that Europro consulted with NEO Architecture, which said the building’s smaller floorplate size would work well for a residential conversion. The majority of the remaining tenants were subsequently relocated to available office spaces in other Europro properties.

“We were left with a vacant building that we can convert into res, which diversifies the portfolio for us and adds more residential to downtown,” Nathanson said.

He expects the conversion to cost more than $20 million.

All of the interior office demolition has taken place and Europro is waiting for final permits in anticipation of starting the full redevelopment shortly. It’s expected to take 12 to 18 months to complete.

“I think it's something that we're going to see landlords explore, but I don't think it's going to be as common as we would like to see just because a lot of times buildings aren’t properly set up for it,” Nathanson said. 

“We got lucky here as this building was perfectly designed in a way that we could fit residential units in quite nicely. We've looked at it in a couple of other spots and weren’t as lucky.”

What 22 Frederick will offer

Europro joined forces with NEO and interior design firm Dfy Studio to transform 22 Frederick, which will include a range of floor plans and different-sized one- and two-bedroom units and larger penthouse suites.

“We spent a lot of time making sure the units are the right size and the design phase took a ton of time and effort to make sure the building would feel like a residential building and feel like somewhere that people want to live,” said Nathanson.

“We punched out extra windows where needed and those types of things.

“When you're not working with a blank canvas, sometimes it takes a little bit more time, but we’re really happy with what the end result is going to look like.”

The property offers surface parking while basement and first-floor amenities will include a spa, co-working space, bicycle storage, a fitness centre, a movie-viewing room and a lounge.

There’s also room on a second-floor space that juts out from the rest of the building that Nathanson expects will be occupied by a restaurant.

The building’s prime downtown location puts it within walking distance of shops, restaurants, entertainment venues, additional parking at the Europro-owned, mixed-use Market Square complex and public transportation via a light rail transit station located directly outside 22 Frederick’s front doors.

The building is also across the street from Conestoga College’s downtown Kitchener campus, giving students a convenient housing option during their school terms.

Europro activity in Windsor

Europro is headquartered in Toronto and has Ontario offices in Kitchener, Windsor, London, Barrie and Sarnia.

It has more than 100 employees and manages a 30-property, 4.7-million-square-foot portfolio in 10 cities, valued at approximately $750 million.

Europro acquired Town Centre Plaza on Malden Road, an arterial road near Highway 401 in the LaSalle area of Windsor earlier this year.

The 88,000-square-foot mall’s major tenants are FreshCo, Dollarama, Pet Valu and Crunch Fitness. The site also offers more than 450 parking stalls.

“LaSalle is one of the strongest residential communities in Windsor and Windsor is a market that we really love,” Nathanson said.

“We’ve seen a ton of development and strong market growth, and it’s a market we're continuing to look at and buy in.”

The Town Centre Plaza acquisition increased Europro’s Windsor commercial portfolio to six properties.

Nathanson said it’s also in the approvals process to develop 390 rental units in five six-storey buildings on an empty 10-acre field adjacent to its 392,374-square-foot Tecumseh Mall.

Madison Centre improvements and future growth

That project and 22 Frederick will be Europro’s first multiresidential developments and it’s an area of the business the company is looking to grow.

Europro acquired the 24-storey Madison Centre mixed-use office building at 4950 Yonge St. in Toronto from Northam Realty Advisors Limited for $118 million in late 2021.

It had a high vacancy rate and the company is investing in model suites, amenity spaces and improved washrooms to make it more leasable and take advantage of its direct access to the Yonge-Sheppard subway station. 

A 10,000-square-foot Galleria Supermarket location just opened in Madison Centre, which has a ground-level and below-grade retail concourse.

“In terms of acquisitions, we're being patient but looking for the right opportunities in the right markets so that we can continue to grow,” said Nathanson.

“We have a couple of things we're working on, but nothing too far long at this point.”