OMERS Family Is Moving
OMERS is moving all its Toronto employees, including Oxford Properties Group HQ staff, to Ernst & Young Tower, Oxford's new development at 100 Adelaide W, consolidating operations under one roof (a super-slick roof that's 600 feet in the air and shaped like a shard).
OMERS will be taking 368k SF at EY Tower, space for Borealis Infrastructure, OMERS Capital Markets, OMERS Private Equity, OMERS Strategic Investments and Oxford Properties, which is carrying out development of EY Tower, slated to open in 2017. At the moment OMERS and its subsidiaries are based at Royal Bank Plaza and 1 University. Consolidating will create “collaboration opportunities,” Oxford marketing and communications VP Claire McIntyre tells us.
 The majority of OMERS' Toronto office leases were set to end in 2017, Claire tells us. It so happened those expiries "teed up nicely” with when EY Tower was scheduled to be completed. “And certainly if you have a real estate group it makes sense to locate in your own assets.” EY Tower—currently at the podium level of construction on Adelaide between Bay and York streets—will be 40 storeys, with 900k SF of leasable space and 23.5k SF floor plates. The building, targeting LEED Platinum, will be a new addition to Oxford's 2.4M SF Richmond-Adelaide Centre. Royal Bank Plaza and 1 University now face significant vacancies. But Claire doesn't think the older towers—both owned and managed by Oxford, which has taken the buildings through major retrofits and energy efficiency upgrades in recent years—will have any troubles luring replacement tenants, given their AAA locations. “They're attractive buildings and consistently very well-leased."
The OMERS deal means 100 EY Tower is now about 90% leased. Ernst & Young is the building's lead tenant, and TMX Group is also a major tenant. Six floors remain available for lease out of 40, according to Claire, who says it'll be gratifying for Oxford to have its new HQ in an iconic-looking development that it's created. “There's a pride you can have as a developer when anybody comes to meet with your enterprise and they walk through the doors of something you've built from the ground up.”
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Top stories on Bisnow.com
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Northwest Healthcare Properties REIT Goes on
a Buying Spree
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How does Northwest Healthcare Properties REIT explain its recent acquisition tear? The company calls it an “ongoing portfolio optimization strategy.” Last week, the REIT said it paid $13.7M for a two-building complex at 81-85 The East Mall and plans to renovate one of the buildings to become the future home of the Etobicoke Family Health Team. The other building, 81 The East Mall, is "substantially occupied," the REIT said. The complex, with a total rentable area of 82k SF, is Northwest's 11th property in the Greater Toronto Area. |
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Northwest also acquired a parcel of land on Bayview Drive in Barrie and will build a three-storey, 79k SF medical office building slated to open in 2016. This will be the new home for the Barrie Family Health Team, among other healthcare users. The property is the REIT's first in Barrie, where Northwest has established its central Ontario office to support its other properties in nearby Collingwood, Orillia, Midland, and in Owen Sound—where it just purchased a 73.5k SF office building for $23M. |
Target's Abrupt Exit Is Just
a Bump in the Road for RioCan
“We certainly could have done without Target's sudden withdrawal from Canada,” RioCan REIT chief Edward Sonshine told investors in a call Friday, saying it's "tragic" for many of Target's employees and small suppliers. For RioCan, though, the departure is "just a bump in the road generating a lot of work, and at the end of the day with no real impact." RioCan has 26 Target locations, under 2% of its rental revenue. All but one of these leases are guaranteed through an indemnity arrangement with Target (and the one not covered is guaranteed by Walmart Canada.) RioCan had a Q4 profit of $172M, down from $265M a year ago. Its funds from operations rose to $130M, up from $124M in the same period last year.
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New Rules Govern the Future of Commercial Drones
The FAA Sunday announced new rules governing commercial drone use that relax current restrictions but may frustrate retailers like Amazon looking to drones as delivery vessels. The guidelines, which probably won't take effect for about two years, require that small-scale commercial drone operators be certified, only fly the drones during daylight hours and be able to see the aircraft through binoculars.
Businesses see potential in drones as a means of accelerating everything from pipeline inspections to clothing deliveries. Amazon has unveiled plans for Prime Air, whose implementation the latest FAA rules would complicate. The new proposal covers non-recreational drones weighing up to 55 pounds.
Real estate firms value drones for their ability to capture unique angles of luxury homes and premier office towers. The FAA's announcement may not hinder drone use in crafting marketing materials for estates, but by capping flight heights at 500 feet would keep drones away from the tops of large skyscrapers. |
Twin Labor Disputes Have
US Retailers Worried
Energy companies, lumber suppliers and the auto industry all have reason to fret after 3,000 Canadian Pacific Railway engineers and conductors went on strike Sunday in a battle over benefits and salaries. The virtual shutdown will likely ripple through several North American industries because Canadian oil producers have increasingly relied on Canadian Pacific to ship product to America. Automakers will also feel the effects—all three of Toyota's Ontario assembly plants exclusively use Canadian Pacific for shipments.
Many smaller retail products also pass through ports in British Columbia en route, via train, to Chicago and other US cities. The union behind the walk-off cite lack of rest as its primary objection to current work conditions, although the railroad contends that the majority of employees do not take the time off available to them.
Meanwhile, a bitter dispute between West Coast dockworkers and port owners over a new contract has delayed workflow and especially interrupted auto shipments. Labor Secretary Tom Perez will meet with the opposing sides in San Francisco tomorrow. Should a full strike take effect, the National Federation of Retailers says it could cost the US economy $2B a day. |
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New Bisnow Video:
The Art of Negotiation!
Three Reasons to Watch Our Latest Video, "The Art of Negotiation" with Dr. Peter Linneman:
1. If they don't let you expense it at first, you'll be able to negotiate that later.
2. Knowing how to negotiate your compensation will always be useful.
3. It may help you talk your way out of a parking ticket.*
(*Not guaranteed)
You'll also learn about how to negotiate a real estate deal. From learning what your opponent wants to getting what you want, Dr. Linneman explains more than just the basics behind the Art of Negotiation. Watch a sample here. (And check out all of our videos here.) Order yours, and for training program group licenses, email Will Friend at will@bisnow.com. |
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