Tribute Communities and Secure Capital have partnered to acquire the Brookdale Centre and highly prized multiresidential development lands along a major commercial corridor in the East GTA community of Pickering.
The partners paid $71 million for the property, which includes a necessity-based retail power centre comprising 226,747 square feet of GLA, as well as about 3.4 acres of land already zoned for residential and related uses. Development plans are preliminary, but the vision is for three towers and 1,000 or more condominium units on the property, which will also feature an extension of the existing Walnut Lane to link the property to the shopping centre and roadways.
The property was acquired from Kingsett’s Canadian Real Estate Income Fund LP.
Secure Capital founding partner David Ogden told RENX creating a new venture with Tribute was particularly appropriate considering the location. Ogden also has a long history with the site.
Ogden involved in previous transaction
“I was involved in structuring the original deal with the developer who built the retail centre and Kingsett, so I’m very familiar with the asset and the retail centre,” Ogden explained. “So when KingSett decided they were going to sell the shopping centre and the development lands we obviously had a very keen interest in it, recognizing what is going on in Pickering and the growth in the area.
“With Tribute being the prominent developer in the Durham Region, it was a natural fit,” he said, adding a mutual partner brought them together.
For Tribute, the acquisition is almost literally in its own backyard – just across Hwy. 401 from its office.
“From our point of view, when David approached us in our backyard it piqued our interest right away,” said Tribute chief financial officer Gus Stavropoulos. “Pickering is growing, but a lot of the growth in terms of the residential side, which we primarily focus on, is in the Seaton area and low-rise.
“I live in Pickering as well, so of course it interests me as well. I shop at that plaza all the time.”
The existing retail centre is anchored by a Food Basics grocery store, Shoppers Drug Mark and Home Depot, the types of retail which are considered “COVID-proof” according to both Ogden and Stavropoulos.
It’s directly across Hwy. 401 from the Pickering GO Station and transit hub, at the intersection of Kingston and Liverpool Roads.
Development land key for Tribute
Tribute does not normally acquire retail assets, although it has in the past built some retail properties as elements within residential developments. So, this is a bit of a departure for the company.
“When David first approached us, we were just interested in the development lands. We’re not an acquirer of retail assets,” Stavropoulos said. “We’ve built a few small commercial places in the past when we have a commercial block on our site plan. We’ll go out and build it and keep it as an asset. We don’t go out and acquire these types of assets traditionally, but as David mentioned, this one seems to be a perfect storm.
“The revenue was still coming in, we’re bullish on the area, the Walnut Lane expansion that David brought up is huge for us. We hope to put north of 1,000 units in those neighbouring lands that are the development lands.
“When we ran all the numbers, and David was a big part of that, it made sense to acquire the entire parcel and see what we have going forward. So it was a fit on so many levels.”
The development property itself is a visually attractive plot of land, Ogden said.
“This particular piece of land has natural attributes. (They’re) beautiful wooded lands that really are hard to find in the Durham region for condo development,” he said. “There is a lot of natural beauty to this site that I think the end retail investor will really appreciate.”
Development could begin this year
With zoning already in place for about 850,000 square feet of floorspace, Pickering keen for development in the area, and an overall concept of what it wants to build, Stavropoulos said the first phase of the project could proceed fairly quickly if all goes well.
“There’s been some drawings done already that would show a three-building opportunity,” he said. “It’s going to be a three-building opportunity when we’re done, but we’re going to look at tweaking and efficiencies and see if we can squeeze some more GFA out of it.”
He suggested sales for the first tower could go to market before the end of 2021.
Although three condominium buildings is the current plan, that could change based on market conditions.
“We’ll be there 10 years doing the three buildings, and if the third building rolls around and it makes more sense to do purpose-built rental on the third building, we’ll have the discussion,” Stavropoulos said.
“If David agrees and we are all in agreement, then maybe we do something like that.
“That is the beauty of this site. It’s approved, but it’s still a blank canvas. We can kind of do what we want.”
The transaction was brokered by CBRE and the team of Peter Senst, Hillel Abergel, Casey Gallagher and Kai Tai Li.
About Tribute Communities, Secure Capital
Toronto-based Secure Capital group of companies was founded in 2001 by Ogden, who has 30 years of industry experience.
He has completed transactions on over 250 properties across North America and Secure’s principals have transacted and managed over $10 billion of industrial, retail, office and residential assets.
Secure’s partners include pension funds, financial institutions, insurance companies, real estate investment trusts and high-net-worth private investors.
Tribute Communities is a builder and developer with over 35 years of experience, during which time it has built more than 35,000 homes across Southern Ontario. The firm builds all forms from single-family dwellings through to mid- and high-rise communities.
Some of its completed developments include The Reserve Collection at Danforth and Main, Y & S Condominiums at Yonge and Soudan, Stanley Condominiums at Church and Carlton, Max Condominiums near Church and Dundas, and The College at College and Spadina.