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This week Slate Properties officially acquires Huntingdon Capital Corp. To mark the occasion, Slate is selling its entire $190M GTA suburban office portfolio to FAM REIT, a firm it will now own part of via the Huntingdon deal. Slate partner and co-founder Blair Welch tells us more.  The transaction—including Mississauga's Meadowpine Corporate Centre (seen below), and six other properties—will be paid for with $144M in cash. Slate will also acquire 5.1 million units in FAM REIT. Slate announced in August it would be acquiring Huntingdon Capital, and the deal closes this week. With it comes a 30% stake in FAM, which will add the Slate buildings to its portfolio of 28 industrial, office, and retail properties. Blair notes his company is selling all of the office assets that it 100% owns. By taking back equity in FAM, Slate is supporting the firm in its bid to become a “pure-play office REIT.”  The Slate office properties—comprising 1.1M SF of GLA total—will give FAM the opportunity to gain “significant exposure” in the GTA, Blair tells us. And there's future upside here: “They're buying these assets at a discount to many different appraisal values.” Non-core office assets are "a bit out of favour” at the moment, so there's less competition on that side of the market compared to other asset classes, like industrial or retail, that are in demand from private investors, REITs and pension funds. “When other people aren't participating, that's probably a good time to buy.”  The Slate office property portfolio FAM will be acquiring—subject to unit-holder approval at a December meeting—is 90.2% leased. This includes non-core properties like Woodbine & Steeles Corporate Centre, Centennial Centre and 1 Eva Rd in Toronto, seen above. While the buildings may be mostly booked up, FAM REIT sees opportunities for cash flow growth through rent increases and occupancy expansions. Since FAM's 2012 IPO, three of its four acquisitions have been in the office market. |
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Why Retail Property Sales Lost Their Mojo The start of the year was happy days for retail property sales in the GTA, with $1.1B in trades in Q1 alone. Since then things have been on the decline, with a paltry $380M worth of retail properties changing hands last quarter, down 17% from Q2. What's going on? Avison Young capital markets group leader Robin White tells us good quality core assets are few and far between and investors aren't keen to part with them. Even smaller plazas are generating good returns, he notes, and owners are happy to hold on to them because they have no better places to invest their money.  Among the bigger retail deals of the last quarter was First Capital Realty's $39.7M purchase of Shops of Oakville South (above). Tenants at the 231k SF plaza include Whole Foods, LCBO and Longo's. First Capital also snapped up 102-104 Yorkville Ave for $14M last quarter. Things likely won't stay slow for long, Robin points out, noting Avison Young is bringing properties to market this quarter that will create resale opportunities. And his team predicts pending deals will push overall retail sales for 2014 beyond 2013's total of $2.1B. |
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Real Estate Takes Extreme Steps for United Way |
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 Brookfield SVP Bob MacNicol was one of the 200 sweaty but spirited souls who took part in last week's Real Estate Climb For United Way, which saw participants from 50 real estate, construction and brokerage companies climb 225 flights of stairs—that's 4,680 steps—in four of downtown's tallest office towers: First Canadian Place, TD Centre, Scotia Plaza, Commerce Court West and TD Canada Trust Tower. Bob started an in-house climbing challenge at Brookfield's buildings several years ago; he expanded the event last year to involve the rest of the real estate community. |
 As of Monday morning the Real Estate Climb—which was neither timed nor a race—had raised $67,000 to support United Way agencies, which deliver health and social services and programs (last year's total was $80k; the goal for 2014 is $100k). Sponsors were Brookfield, Cadillac Fairview, Dream, GWL Realty Advisors and Oxford. Bob's team (pictured, Bob with Roz McQueen, Matt Whitty, Jan Sucharda and Adam Kabelik) raised $5,023, the most money so far. |
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