“What we’re seeing in the market right now are a number of owner-occupiers that, in a post-COVID environment, are analyzing their portfolios and looking at their occupancies and trying to understand if they’re maximizing the use of their own facilities,” Kendrew told RENX. “That’s certainly something that Foresters was looking at very closely.”
Kendrew has also noted some office buildings are being viewed as good residential or industrial redevelopment opportunities, and he believes the Foresters head office could fit into this category.
“Our team has sold close to 650,000 square feet of office in the last three months and only 50,000 of that was to an investor client. The rest was all to developers looking to potentially redevelop with a different use on the site, whether it’s residential or industrial.
“I think Foresters really saw the demand for residential redevelopment and saw significant increases in value over their ownership period and thought now would be a really good time to combine looking at the future of their occupancy while taking advantage of a good time to monetize.”
Improved transit, strong buyer demand
Kendrew said the property was on the market for four weeks, attracting great interest and a number of bids from a mix of residential developers and existing office owners.
“This is an excellent location near one of the city’s most important intersections. You’ve got proximity to the Don Valley Parkway, the Eglinton LRT, which is verging on being completed and running, and where the Ontario Science Centre is will be a stop on the future Ontario Line.
“Though it may not seem that way now, a decade from now this will be a very important intersection for the city of Toronto. It’s an opportunity to get on the ground floor of an area that’s going to be a live, work and play area.”
DBS Developments plans to build Metro Park Condominiums, a 37-storey building with 405 suites plus three-storey townhomes, nearby on St. Dennis Drive east of Don Mills Road. The plan for the 4.8-acre property includes creating a new street and public park and updating an existing rental apartment building constructed in the 1960s.
The 23-storey Foresters building was developed by Olympia & York Developments and designed by Bregman + Hamann Architects, which is now known as B+H Architects. It was completed in 1966 and has a number of current vacancies.
Residential redevelopment opportunity
While Menkes hasn’t yet shared specific plans for the property, Kendrew believes the company will reposition it and build out additional residential density.
“There’s a very large surface parking lot, so that would be an obvious starting point. The secondary plan for the area from the city supports some residential intensification on the site.”
Menkes is a fully integrated real estate company involved in the construction, ownership and management of office, industrial, retail and residential properties, primarily in the Greater Toronto Area.
The company was founded in 1954 and has become one of the largest private developers in Canada, with past projects including: a partnership with Lifetime Developments on the Four Seasons Hotel & Residences; 25 York Street; and the two-million-square-foot Harbour Plaza residential and One York Street office and retail complex.