The recent sale of LuCliff Place in Downtown Toronto by the Wong's to Kinsett Capital is an indication that sophisticated long-term overseas investors are ready to cash their chips in Canada and park their money elsewhere given the current global economic situation.

The mixed use retail, residential and office tower at the corner of Gerrard and Bay Street has been held by the Wong family since the 80's.    The 353,884 sq. ft. complex comprise 233 multi-family units, 265,026 sq. ft. of office space and 20,958 sq. ft. of retail above a five-level underground parking garage.   

The transaction recently closed for $112.2 million (Cdn).

More than 6,000 new residential condo units sold between January and March, 2012.   Luxury selling at $700 per square foot  >>  GLOBE & MAIL

• International Money investing in Toronto - in the Condo market
• Rental Demand Strong esp. for Two Bedroom units
• Chinese  Home Buyers in Toronto
• 40,000 sq ft home on a double lot in the Bridle Path

Hello! Toronto

Shangri-La Hotel, Toronto!  It is beautiful.   In character with their developments throughout North America, Westbank and Peterson have 'beautified' the ceremonial street of Downtown Toronto with the the bird sculptures at the west side of University Avenue at Adelaide.     >> MORE

The newly opened Toronto Shangri-La makes me feel like I just arrived in a tropical paradise.   So much attention to thoughtful detail on a world-class level.   Well done!!

• Toronto Life
• Momofuku - Best restaurant in the city  --  GLOBE & MAIL

Miraj Spa by Caudalie Paris will offer the renowned vinotherapy of France’s Caudalie married with that of the Miraj Hammam experience.   >> MORE

The Shangri-La opened on 31 August 2012, on Canada's grand ceremonial boulevard, University Avenue, in the heart of its largest city, Toronto, Ontario.  

Ian Gillespie is the leader of the vision behind what's taking place right now at Adelaide and University Avenue, the lands owned by Peterson Investment's Ben Yeung.   

What distinguishes Shangri-La from the other developments is the team that is interpreting luxury accommodation and service for the serious rich of the world.     The developer and the Rich trust this team.  Award-winning architect James K.M Cheng has collaborated with  Ian Gillespie's Westbank and Petersen Investments on many projects over the course of a few decades.

Here's what the condo's above look like:

Our children can occupy the unit while they are attending school and we love the fireplace in the sky!  The site was previously owned by Sun Life.   -   太太

• Toronto is on a roll
• Office boom
• China Investment Corp's first overseas office in Toronto, Canada

• Foreign investors in Toronto condos   -- 2011 May 21   NATIONAL POST
• Overseas interest    --  2011 May 26   THE STANDARD
• Rental value
• Owner of the King Eddy

My project in Toronto

Richard Li launched over a decade ago on the waterfront of Downtown Toronto at Queen's Quay at 500-550.   Our development effected the re-allignment of the Gardiner Expressway and  was a commercial as well as design success and a collaboration with uber-cool Bruce Kuwabara who helped pushed our vision but it was Richard's money.  

• Toronto Harbourfront isn't moving fast though 

Andrea Eng acquired the site and assembled the team that developed the above award-winning project at 500-550 Queen's Quay in Harbourfront Toronto...    >>  MORE

• Creator of the Hang Seng Stock Index retired in Canada
• Most expensive home sold in Toronto

TORONTO OFFICE MARKET:

• Cash-strapped CBC raises cash by leasing out empty space at Front Street building     >>  MORE

QUICK FACTS:

Three new buildings in 2010 have added nearly 3.5 million square feet downtown. They are:

• The 1.2-million-square-foot RBC Centre on Wellington St.;
• The 1.5-million-square-foot Bay Adelaide Centre; and 
• The 780,000-square-foot Telus Tower on York St.

NOTABLE DEALS:

• Adelaide Place sold in January 2010 for  $211.5 million or $323 per sq ft
• In Midtown, 77 Bloor St West traded on December 15, 2009 for $96.5 million or $261 per sq ft; and
• 60 Bloor St West traded on December 15 2009 for $ 90.1 million for $352 per sq ft

DOWNTOWN & MID TOWN:

• GTA office market tightening
• Downtown Office Buildings
• TD Bank Tower facelift
• Older office towers reinvent
• Office boom creates vacancy rate higher than New York
• Office space glut to worsen
• Office 4Q2009
• Eaton Centre Upgrade   >>   More details
• Retail 4Q2009
• Toronto Office rents climb
• Manulife Centre

TRANSACTIONS

Brookfield Properties sold its 50% interest in the TD Canada Trust Tower to OMERS , the co-owner in the building, for gross proceeds of $425 million in July 2008. The purchase price works out to a valuation of $721.00 per sq. ft. This is a Canadian record for an office building. The 51-storey, 1.1-million-square-foot tower is one of the two office towers which make up the 2.6 million sq. ft. Brookfield Place office and retail complex in Toronto's financial district. TD Canada Trust Tower opened in 1990 and is currently 100% leased.   - 2008 July

The Financial Core has benefited from steady growth in the financial and professional services sectors, lowering its availability rate from 9.3% at year-end 2006 to 7.8% at year-end 2007. Conditions in the Core's AAA towers have never been tighter, with a historic low vacancy rate of just 1.7%. With virtually no 'existing' large blocks of contiguous office space, rents have risen to levels reminiscent of the late 80s. On average, the net rate for prime office space stands at $32.39 p.s.f. and ranges as high as $38.50 p.s.f.   - 2008  February

The Downtown market saw its vacancy rate decrease by 60 bps to finish at 5.6%. Quoted asking net rates increased from $19.24 psf to $21.23 psf. The Financial Core led the way with a vacancy rate reduction of 100 bps - setting a new historic low of 3.4%. Quoted net asking rental rates for Class A product were pushed up, breaking through the $30 psf barrier to finish the quarter at $30.25 psf. The ripple effect of the tight Central market has been a flourishing Suburban market, dominated by construction, completions and absorption. Six new office buildings were completed across the peripheral markets totaling 605,893 sq. ft., bringing the total year to date completions to 1.5 million sq. ft. The overall Suburban vacancy rate declined by 70 bps to close the quarter at 9.6%. - 2007 October 27

Tight vacancy rates across the Greater Toronto Area spell double-digit base rent increases for any tenant now facing lease renewal or looking for new office space, brokers and landlords say. Especially hard hit will be those tenants looking for larger premises, they say.

"We are already seeing rent increases in the 10- to 13-per-cent range and we believe those figures will start to spike in the final two quarters of this year," says Paul Morse, senior managing director at Cushman Wakefield LePage.

Rent increases in the core of the city - home to the bank towers and other high-rise office buildings - likely will average 10 per cent; but on the fringes, in areas north of Queen Street and to the downtown's east and west, they likely will rise even further, predicts John O'Toole, executive vice-president at CB Richard Ellis Ltd. He says a 15-per-cent increase is not uncommon.

At the same time, both landlords and brokers say the rent increases are providing substantial benefits to the city. They are, for example, creating demand for buildings north of Queen Street where vacancy rates traditionally ran in the 15-per-cent range. They are also helping to spur renovation and upgrading of older less desirable buildings in areas east and west of downtown.

"Owners are finding that if they put their money into improvements now, they can easily get it back plus increased operating profits from rents at these levels," says Michael Emory, president of Allied Properties REIT, which owns 2.5 million square feet of renovated office and retail buildings east and west of Toronto's core.

Those double-digit rent hikes are expected to continue for at least the next three years until about 3.3 million square feet of new office space comes on stream, says John Arnoldi, managing director for the Toronto region at Colliers International.

"The real question that faces us now is when will the impact of that new space be felt and what will it be?" he says. "Will it come in 2009, 2010 or 2011 and will it indeed put pressure on landlords to reduce rents?"

Mr. Morse is predicting vacancy rates, now running in the 5-per-cent range for Toronto, to rise again to 12.7 per cent once all that new space hits the market.

Especially tight is space in the central core area of the city where about 86 per cent of the top-quality office buildings are owned by a handful of pension funds and institutions. Mr. Morse says vacancy rates in triple-A buildings in the core have sunk to just 2.7 per cent, which means a 100,000-square-foot structure has about enough vacant space to house a three-bedroom condominium. Over all, the rate in the core area, south of Queen Street, which is home to about 63 million square feet of space, now stands at 5.3 per cent.

"If you have a 5-per-cent vacancy rate in a building, we consider it fully leased," says Paul Finkbeiner, president of GWL Realty Advisors Inc., which manages properties such as Commerce Court and 33 Yonge Street. He says supply-and-demand factors dictate rent increases and, as space comes up in GWL-managed properties, these have been in the range of $10 a square foot.

"There are indeed a number of large tenants looking for space in excess of 100,000 square feet and there is little available to meet their needs."

Michael Harvey, vice-president and managing director of national leasing at Oxford Properties Group Inc., which manages properties such as the two Royal Bank Plaza Towers, 1 Adelaide and 10 Bay, says strong demand has enabled Oxford to raise rents from 10 to 15 per cent depending on the building and location.

"While vacancy rates are tight, there is always movement as tenants expand or contract or merge and as leases expire," he says. "Continuing strong demand has allowed us to increase rents almost all across the GTA."

Most property managers stagger leases to allow for a steady flow of renewals, points out Allied's Mr. Emory. Allied tries to stagger expirations so that 13.5 per cent of its tenants face renewals every year, a formula that helps provide for steady revenue growth. The same approach is taken by all major landlords, he says.

That negligible vacancy rate in combination with stiff rent increases is driving tenants north of Queen, east and west of the core and into the suburbs, the brokers and landlords say. But even then just finding space is a challenge, especially for those needing large spaces.

"What you are seeing is buildings like the Atrium and Bay and Dundas, which traditionally had 15-per-cent vacancy rates, being able to lease up," says CBRE's Mr. O'Toole.

"Mike Emory, with all that more affordable brick and beam space downtown, has to be the happiest guy in Toronto," adds Collier's Mr. Arnoldi.

Mr. Emory is indeed pleased. His portfolio has an overall vacancy rate of just 3.5 per cent and he says he is now getting between $22 and $24 a square foot as a base rent - record levels - plus about another $10 in operating costs.

"By comparison, the bank towers need about $25 just to cover operating costs and taxes," he says. "Then add on your base rent, which is hovering near the $30-a-square-foot mark. Our gross is equal to their net."

GTA West, which traditionally has offered tenants needing large spaces a suitable escape from downtown, has become less of an option, says Mr. Morse of Cushman. Despite 1.3 million square feet of new space coming on stream so far this year, he says vacancy rates have dropped to the 7.5-per-cent range.

"There is little opportunity for major tenants to find alternatives there any more."

At the same time, those low vacancy rates have persuaded conservative companies such as GWL to begin creating new office buildings on spec, although nothing of a size to accommodate big tenants.

"We are building a number of 60,000-square-foot office structures in GTA West right now," Mr. Finkbeiner says. "There is not much risk in something of that size where total space is just 19 million square feet and the absorption rate is about 500,000 square feet a year."

Nor is Mr. Finkbeiner concerned about the impact of another three million square feet of space coming on stream downtown in just three years.

"The owners of those projects are experienced, professionally managed companies," he says. "They are going to price those new projects to meet the market at the moment." -   GLOBE & MAIL    2007 August 21

Foreign investors have snapped up a newly completed office tower in the north end of Toronto for more than $180-million, in what some in the industry see as further evidence of the huge appeal Canadian real estate now has to outside investors.

The property, sold by privately owned Menkes Developments Inc. and Transamerica Life Canada, was bought by a subsidiary of Deutsche Bank AG in a deal that took less than eight weeks from start to finish and was the result of an offer made before the property was put on the market, said Peter Menkes, executive vice-president of the real estate company. As part of the deal, Menkes retained a minority stake in the building and will continue to manage the property.

Mr. Menkes said his firm decided to forgo a formal bidding process because of the appeal of teaming up with a large foreign investor who was willing to do a deal so quickly. The offer also was in line with expectations, he said.

"They came to see us in June and explained their set up and the fact that they wanted us to stay in as a partner," he said. "For us to stay in as an owner and a manager and to create the relationship, the platform for growth with DB within Canada, was a nice opportunity for us."

He said the company was working with the Brascan Financial Real Estate Group on the deal. CB Richard Ellis represented Deutche Bank.

The 21-storey Transamerica tower is located in the heart of the former municipality of North York on Yonge Street just north of Sheppard Avenue and was completed this spring. It was constructed by Menkes, a Toronto-based company with residential, commercial and industrial properties in the Toronto area. Mr. Menkes said that before construction began, Transamerica committed to lease 60 per cent of the space in the building, which is now just over 90 per cent leased.

The deal, completed this week, was done in an unusually short time during the summer months and has ignited talk again about the interest of foreign investors in the Canadian market.

Over the past two years foreign bidders have become increasingly common in the hot Canadian commercial real estate market where vacancy rates are generally lower than in the United States and rates of return are higher than in Europe.

"There is an unbelievable amount of foreign focus on Canada right now -- more than our company has ever seen," said Blake Hutcheson, president of CB Richard Ellis in Canada.

"It's another example of the Germans liking Canadian real estate, " agreed Paul Finkbeiner, president of GWL Realty Advisors Inc. - By Elizabeth Church    TORONTO GLOBE AND MAIL     21 Aug 2004

• Sun Life Assurance Co. of Canada completed the sale of the Merrill Lynch Tower in Downtown Toronto to the British Columbia  government's B.C. Investment Management Corp in 2000.  
• The 346 room Skydome Hotel was sold to Larco for $33.5 million  - or $96,000 per room in 2000   
• Hyatt Hotel Corp purchased the Park Hyatt at 4 Avenue Road for $107 million                   
• Banks divested their real estate portfolios to stick with core business
  

Oxford Properties Group, the Ontario Municipal Employees Retirement System (OMERS) and GE Capital Inc. completed previously announced acquisition of the Royal Bnk of Canad's real estate portfolio, including the flagship Royal Bank Plaza for a total purchase price of CDN $827 million.  The Royal Bank portfolio comprised 33 properties with 4.9 million square feet.  The portfolio is made up of three asset groups.

The first consists of Royal Bank Plaza, a 1.6 million square foot complex in Toronto's financial core; it will be two-thirds owned by OMERS.

The second consists of office properties that include 22 multi-tenant properties located across Canada made up of 2.2 million square feet. 

The third consists of Royal Bank Data Centres which includes 10 properties across Canada, covering 1.1 million sq ft.

In addition to the CityPlace condo development, which will consist of 20 buildings with about 10,000 residential units, more than 200 other condo projects of all shapes and sizes are under construction or on the verge of completion in the Greater Toronto Area. This will result in some 46,000 units entering the market. According to Urbanation, first-quarter sales of new condos were 3,011, up 33% from the same period in 2003. Only two other quarters on record, one in 2002, the other in 1987, had stronger sales. The average price per square foot was $301 in the first quarter, up from $294 in the prior quarter. In the resale market, average prices also rose, to $235 per sq. ft. from $229. In the first quarter, Toronto had 12,264 new condos of unsold inventory. That is up 23% over a year and only 6% short of the record high achieved in the last quarter of 2003.

In a May 2004 Housing Report by Clayton Research, residential renovation spending rose 8.5% in Toronto during 2003 after inflation. Approximately half of all residential construction investment shows up in the form of renovation spending. Some $33 billion was spent in 2003. The renovation sector is expected to continue to grow at an anticipated 6-7% per year in real terms in 2004-2005, about twice the rate of growth as for the economy as a whole. Low interest rates continue to be a driving force. Renovation spending is expected to be strongest in BC, Alberta and Quebec.

Last year, Toronto retained its wide lead as the most important head office centre in Canada, with 56,000 head office workers, one-third of the Canadian total.     - Statistics Canada

Toronto's love affair with the condo shows no sign of abating, according to the latest market overview by a major condo-research firm.

In the second quarter, ending June 30, the Greater Toronto Area saw record levels in multiple sectors — new sales, resales, new project openings and new condo units, according to Urbanation, a Toronto-based research firm that has been measuring the condo market since 1981.

Over all, almost 7,000 new units were sold and more than 4,100 units were resold in the April-to-June period.

As well, more than 54,900 new units entered the market.

Jane Renwick, editor and executive president of Urbanation, attributes the booming market to the spate of new projects and the rapid growth in a variety of buyer groups.

"We're really seeing a lot of those who have purchased a condo are now buying a second one [and] … the first influence of empty-nesters, who are now buying into the market and are planning to downsize in the next three or four years," Ms. Renwick says.

The second quarter saw 36 project openings — more than four times the number in the first quarter, but Ms. Renwick noted that several projects opened later than expected.

Urbanation's analysis suggests Toronto is on track to break the condo-sales record of 16,224 units set in 2005, with Ms. Renwick forecasting a total of 17,000 new condominium sales and 14,000 condominium resales this year.

Ms. Renwick says the strong loonie, low unemployment and steady immigration rates have all contributed to the healthy GTA condo market. "There's a lot of positive economic indicators that point to a very stable economy and when you're in a scenario like that, people are confident enough to buy real estate."

Given the strong economy, she doesn't see an end to the condo boom any time soon.

"The sales cycle we're on right now actually started around 1996, so it's been an upward trend," Ms. Renwick explains.

"At different times, it's been more of a sharper incline and then flattened out, but at no time has pricing ever dropped … from year to year."

However, Urbanation's report also questions whether the Toronto condominium market "can sustain this kind of volume, especially in an environment of aggressive price increases." Ms. Renwick noted that, "Affordability — from both an investor and first-time buyer perspective — is also being tested as prices continue to rise." -    GLOBE & MAIL    2007 August 17

Used to be, the diehard concert fan could camp out on the sidewalk overnight and be assured of getting seats within the first 30 rows when tickets went on sale the next morning. Today, through a combination of Internet buying, deals between the ticket sellers and resellers, the promoters, the bands and the venues, by the time you get to the wicket, many of the best seats are gone.

The parallel in today's condo market is inescapable. While some projects evoke a kind of concert camp-out frenzy, condo shoppers may not know that plenty of suites have already been snapped up by an inner circle of buyers, many of them investors.

Condo commerce has evolved since the boom-- then bust --of the 1980s. Back then, investors speculating on condos put in their orders for shiny new DeLoreans -- then watched the wheels come off. Today, the investors are back, and in growing numbers. Experts say this is good.

For one thing, the current crop of investors is less speculative, more inclined to be in it for the long haul. As such, it's their seed money that helps get hundreds of condo projects off the ground for the rest of us.

"It shows sales momentum to potential financers," says Jane Renwick, editor of the industry-tracking publication Urbanation. "A big part of getting that momentum started is the investor buyer. They're kind of like partnering with the developer."

That's why developers hold a series of pre-sales before opening their doors to the public. Advance friends-and-family nights and brokers' nights help sell units to those who are keen to buy suites they intend to rent out or later turn over at a profit. They have money to spend and are less tentative than other end-user buyers who will make repeated sales office visits before deciding.

The proportion of investor-held units range from site to site, but Urbanation's estimates for the Toronto area have recently been revised to 30% from 20% of the market.

This increase, along with the low interest rates of the past several years, has many wondering when the bubble will burst.

"There is no bubble," says Barbara Lawlor, president of Baker Real Estate, listings broker for many Toronto developments, including the Ritz-Carlton. "We are not experiencing the same economic underpinnings today" as in the late '80s, she says, citing strong immigration, an on-target rate of inflation and our "peaceful democratic society" as contributors to the strength of the market.

Hunter Milborne agrees: "The prices went up in '89-'90 so fast. In one year they almost doubled -- or tripled in some cases. What we have here is a more sustained and slower increase."

What's more, with new purpose-built rental buildings few and far between, investors' units are providing much-needed rental stock.

"I think it's a positive thing for the city. I mean, how much [higher] would rents be if there wasn't that new supply?" says Mr. Milborne, who has been through numerous real estate cycles in his 30 years in the business.

"The main difference this time," he adds, "are a lot of investors purchasing, but they are planning on closing and renting it out. That's the primary goal. If the opportunity comes to resell ? then great." Ms. Renwick agrees. "What we're seeing is that investors are holding. They're long-term, they're not flippers."

That may be the result of a better regulatory framework that protects developers and their projects -- and ultimately the buyers. For instance, there's Ontario's Consumer Protection Act of 2002 (in effect since July, 2005), also known as the 10-day cooling-off period-- what might be called the "buyer's remorse" law; developers wait that one out after each pre-sale. And many of them follow the one-agreement-one-name rule, as well, to prevent any one investor from loading up on suites, potentially to dump them before closing. That's another thing that has changed since the Reagan-and-Rubik's-Cube era.

Not so for The Condo Store. "We do buy in bulk," says COO John Mehlenbacher. "Between 40 and 120 units [in one building]." Some developers will happily hand him a fistful of contracts before anyone else (though he declines to reveal which), and these volume deals net his clients volume discounts, usually to the tune of $5,000 or $10,000 off the purchase price of each suite, and that's on top of the already lower pre-construction prices.

That's an attractive proposition to foreign investors, who recognize Canadian real estate prices as cheap compared with much of the rest of the world. The Condo Store reaches these potential buyers through its offices in London and Dubai and manages the properties -- 800 of them currently, with 2,000 more slated to come online in the next year -- on behalf of its clients. For brokers who represent developers, like Baker Real Estate, marketing may take the form of concurrent sales offices going up in Toronto and such overseas locations as Singapore or Hong Kong, with advertising to match.

Really, though, Mr. Mehlenbacher believes most purchasers are investors, even if it's by default. "When you're buying three to four years out, you don't really know where you're going to be. You might get married, transferred or divorced; a lot of things happen," he says. "You're always going to buy based on spec."

Indeed, he is starting to see "real people" wandering in to the Toronto office, which opened earlier this year. "Here, I would say 20% of our purchasers are end-users."

Ms. Lawlor agrees the face of the classic investor has changed. Aside from the diversified-portfolio types, she says, "There is a 'mom and pop' segment, trying to help their university children to get a foot in the marketplace. There is the family with a grip on the mortgage on the [primary] house and would like to make an investment toward their retirement."

No one wants to take a hit on what's probably the single largest purchase of their life.

To that end, she says pre-sales don't necessarily mean the best suites are taken prior to launch. "The developers don't release the entire building -- they release certain floors, they hold certain floors for the public sale," she says. "You get first crack but at the same type of suites."

Good news if you're looking to buy low and sell high ? but it still won't get you those hot concert tickets.   - 2007 November  10  NATIONAL POST

• Condo slowdown - 2010
• Condo Lineup
• Condo sales drive Housing starts to 29 year high
• Condos outsell Homes
• Condomania hits new heights

Toronto's booming housing market set two records this week, passing a landmark 90,000 housing sales for the year and posting the highest average price ever for resale homes, according to the Toronto Real Estate Board.

The average price of a Toronto home is now $404,707, "the first time it has exceeded $400,000," said Maureen O'Neill, the board's president. That represents a 19% increase over last year's average price.

Ms. O'Neill said the first two weeks of December continued the escalating upward trend that the board has reported all year, with 3% more homes selling during the first half of the month than in the same time last year.

More importantly, it pushed the overall annual sales numbers to a new high. "The 2,868 transactions recorded during the first two weeks of December have made this the first year that sales have exceeded 90,000," she said.

The real estate board figures showed Toronto neighbourhoods at the head of the home-sales pack, with new home transactions in the city up 43% over last year's thanks largely to a boom in condominium sales. The Danforth had 24% more sales than the same time in 2006 and North York had a 34% increase.  -  2007 December 20     FINANCIAL POST

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