E-commerce software giant Shopify (SHOP-T) will more than triple the amount of office space it leases from Allied Properties REIT (AP-UN-T) and RioCan REIT (REI-UN-T) in Toronto, agreeing to occupy nearly 434,000 square feet at The Well Tower. 

The Well in Toronto, being developed by RioCan and Allied REITs. (Rendering courtesy The Well Toronto)

The announcement, made Tuesday morning, means Shopify will lease almost 600,000 square feet from Allied and RioCan in The Well Tower and at the trusts’ King Portland Centre. Shopify has an existing lease for almost 160,000 square feet at King Portland.

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The new lease is for a 15-year term, commencing in 2022. It brings the office component at The Well Tower to 71 per cent committed to three major tenants. Global advertising marketplace firm Index Exchange has a commitment for 200,000 square feet of space and another, as yet undisclosed tenant, has a commitment for about 125,000 additional square feet.

RioCan and Allied said in July they were finalizing commitments which would bring The Well Tower’s office space to about 80 per cent occupied. While RioCan and Allied are 50-50 partners in the commercial portions of development at 8 Spadina Avenue, on completion Allied will manage the office component of the mixed-use project. RioCan will manage the retail space.

Space at The Well

On completion, The Well will be comprised of the following:

– approximately 1.067 million square feet of office;
– approximately 425,000 square feet of retail;
– approximately 700 underground commercial parking spaces;
– significant third-party digital signage entitlement on the northwest corner of Front and Spadina;
– and the energy-storage facility necessary to extend Enwave’s heating and cooling network to Toronto’s Downtown West.

The Well will also include approximately 1.46 million square feet of residential space across six buildings, comprising about 1,800 rental and condominium units.

The Well Tower is targeting LEED Platinum certification, as is the remainder of the office space at The Well. The trusts say it will include best-in-class operational, environmental, life-safety and health and wellness systems.

Construction of the commercial component of The Well is scheduled for completion in late 2021, with rent commencing in 2022.

Shopify and RioCan / Allied

Shopify’s lease at King Portland Centre makes it the largest single tenant at the project, which is fully leased and nearing completion. Shopify recently took occupancy of its space at King Portland Centre and hopes to complete leasehold improvements by year-end.

The mixed-use King Portland Centre includes a total of 438,000 square feet of space, with office, retail and residential components. Located at 620 King Street West, it is comprised of a 13-storey office building and a sold-out, 15-storey residential complex called Kingly Condos.

Shopify is also expanding its headquarters in Ottawa, moving into Slate Asset Management’s (SOT-UN-T) 234 Laurier Ave., building in the downtown core. Shopify is leasing 325,000 square feet of space as that building is refurbished following the departure of the Economic Development Canada Corp. 

About Allied and RioCan

Allied is a leading owner, manager and developer of distinctive urban workspace in Canada’s major cities. Its objectives are to provide stable and growing cash distributions to unitholders and to maximize unitholder value through effective management and accretive portfolio growth.

RioCan is one of Canada’s largest real estate investment trusts with a total enterprise value of approximately $13.7 billion as of March 31, 2018. RioCan owns, manages and develops retail-focused, increasingly mixed-use properties located in prime, high-density transit-oriented areas where Canadians want to shop, live and work.

Its portfolio is comprised of 284 properties, including 17 development properties, with an aggregate net leasable area of approximately 43 million square feet.