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April 2, 2014
First, London Next, the World
Avison Young CEO Mark Rose better have enough room for stamps in his passport. After yesterday's announcement that his company will open its first European office in London and the Thames Valley, he tells us that AY has its sight set on other locales abroad. (Also beware, Europeans like a lot of mayonnaise.)
AY's deal to acquire London-based commercial real estate services firm Haywards (which brings 20 new employees to AY) is only the first step in a methodical world expansion for the Toronto-based company, Mark tells us. Its next stops include Germany, France, and ultimately Asia, based on what its clients need, he says. (So if you were wondering what to get him as a gift, a travel pillow may be in order.) Mark's no stranger to London—he was chairman, CEO, and CFO of British Coal Corporation Pension Funds' US REIT in the early '90s, so this move's even more exciting for him, he says, since he knows the market well.
Its first deal outside North America actually happened last year, when it repped Hannover Leasing in its sale of the 192k SF, Class-A 30 Crown Place office tower in London (above) to Samsung SRA Asset Management. Mark says it helped lay a foundation for the Haywards deal by boosting AY's reputation in the market. Haywards partners Nick Cook, Tony Oxford, Iain Rackley, and Sarah Cook are now principals in AY.
Why Sun Life Deal Should Quell Your Fears
There's plenty of worry that Toronto is becoming overheated, thanks to the bounty of new office towers, malls, and mixed-use communities rising. (Don't put on your flame retardant suits just yet.) But Cushman & Wakefield prez Scott Chandler says Sun Life taking a 30% stake in One York and occupying 300k SF of space there actually makes him feel positive about where our market is headed. (C&W brokered the deal, which also includes Menkes Developments and the Healthcare of Ontario Pension Plan.)
The transaction shows that pension funds are moving into active development, on top of big institutions' desire to own quality assets in the core. While Scott wishes the recovery were stronger, he notes it's taking hold south of the border and there are positive signs already taking hold here: exports helping offset the slowdown in retail spending and housing construction, as well as strong pre-leasing levels in new office supply, which'll help prevent any collapse in vacancies and rental rates.
Scott also says interest rates are expected to remain low in a historical context. On the investment side, REITs remain attractive overall, and pension funds and advisors are operating with restrained debt levels and ample capital. “This is not 1991-1992 all over again,” Scott says. (We were so close to taking our neon leggings out of storage.) Prime assets across the country, like ones in Toronto's bustling South Core, remain relatively scarce and are viewed as long-term investment holds when they do hit the block.
Shovels In The Ground For 88 Scott
Concert has started construction on 88 Scott in the heart of the Financial District, its largest single development since Concert was established in '89, CEO David Podmore says. He's second from right above, joined by colleagues BrianMcCauley, Kelly Wilson, Pam McConnell, and Jennifer Keesmaat.At the base of the 58-storey condo tower will be five storeys of boutique office (57k SF) and retail space (12k SF). Pre-leasing for both office and retail is being handled by Concert's Vancouver office—nothing to report on that front as yet, says the man who is overseeing that, Jeff Juhala. Concert has begun marketing the project, and are in the process of finalizing arrangements with brokers. Construction is scheduled to be completed in March of 2018.
RioCan Expands Interest in Stockyards
The Stockyards in Toronto is an "irreplaceable asset," RioCan CEO Ed Sonshine tells us, unique in the fact that it's 550k SF of new retail in a very urban area of the city—St. Clair and Weston. No wonder RioCan was attracted to The Stockyards, which it snapped up as part of buying out Trinity Development's interest in three properties for $105M, including two in Calgary. RioCan takes on the role of development manager and will handle leasing responsibilities.
The company also bought out Trinity's interest in Whiteshield Plaza (156k SF) at Kennedy and Lawrence, anchored by Lone Tai Supermarket, for $11M. Ed says another unique aspect to the design of The Stockyards is that customers can drive up to parking in front of the second-floor stores, yet it's still very pedestrian friendly at street level." Canada's first purpose-built Target store anchors the shopping centre.
Our Creative Office Survey Says...
Creative office space isn't too far behind the How I Met Your Mother finale on the buzzometer. And just like the TV show, not everyone is happy about it. We surveyed 563Bisnow readers and found a surprising number of office traditionalists. "The distractions of being in an open environment are killing my productivity," lamented one respondent. (We'd feel guilty for pulling him away from work to take a survey, but it seems he was already inattentive.) Noise, lack of privacy, and reduced concentration were the chief complaints. But it's important to satisfy the needs of a new generation, others replied, so a mix of both collaborative and traditional space is a must. "Traditional office space can be stifling and dated, especially to those 35 and under," wrote another reader. To satisfy both, a former architect tells us the best design is offices around the core and work stations in the open perimeter.
We were watching Wolf of Wall Street the other night, and it got us thinking about memorable lines from movies featuring business tycoons and tyrants. This from Glengarry Glen Ross, a movie that had at least 20 memorable lines: “I'm gonna tell you something you'd know if you'd ever spent a day in your life: You don't open your mouth until you know what the shot is.” — Ricky Roma (Al Pacino). Email mark.keast@bisnow.com.
