CBRE Limited 1 |
327 – 333 QUEEN STREET WEST TORONTO URBAN RETAIL OFFERING | 2 327 – 333 Queen Street West Toronto
TABLE OF CONTENTS CBRE Limited 3 |
01 The Offering
02 Property Overview
03 Market Overview
04 Tenancy Summary
05 Financial Overview
06 The City of Toronto
07 Offering Process | 4 327 – 333 Queen Street West Toronto
THE OFFERING CBRE Limited 5 |
CBRE Limited (“CBRE”) is pleased to offer for sale a signature retail opportunity, situated in the heart of Queen West - Canada’s most exciting and dynamic fashion retail strip. This offering, which is located at 327-333 Queen Street West, Toronto (the “Property” or the “Site”) presents a ~15,700 sq. ft., newly completed (2013), The Property boasts approximately 56 feet of prime frontage that is strategically positioned on the south side of Queen Street West, east of Spadina Avenue at the southern terminus of Beverly Street.
Size In-Place Rent WALT Expiry American Eagle 5,266 $93.64 8.0 Jan-25 Yyoga 10,495 $31.00 6.8 Oct-23 TOTAL 15,761 $51.93 7.2 - | 6 327 – 333 Queen Street West Toronto
2% RETAIL VACANCY
$110-$140 ASKING RETAIL RENTS
POPULATION ~305,000 3KM RADIUS 53 ACTIVE DTW CONDO PROJECTS CBRE Limited 7 |
INVESTMENT HIGHLIGHTS
IDEALLY SITUATED IN THE HEART OF QUEEN WEST – TORONTO’S MOST EXCITING RETAIL NEIGHBOURHOOD Queen West represents the heart of urban lifestyle within Toronto, offering a diverse mix of S " retailers call Queen West home, including brands such as Zara and H&M, not to mention
FULLY LEASED WITH RENTAL RATE UPSIDE POTENTIAL # $$ % ' * space along Queen West, contract rents for the Property are currently considered to be below- market.
NEWLY CONSTRUCTED WITH BEST-IN-CLASS FINISHES # +/48 ' " Queen Street. PREMIUM STREETFRONT PRESENCE AND ACCESSIBILITY The Property’s premier location along Queen Street, surrounded by Toronto transit infrastructure 9 : - an invaluable asset for retail tenants.
99 10 0 Walk Score Transit Score | 8 327 – 333 Queen Street West Toronto
UNION STATION GO TRANSIT LINE
ST. ANDREW STATION
KING STREET WEST
ADELAIDE STREET WEST
UNIVERSITY AVENUE YONGE-UNIVERSITY SUBWAY
OSGOODE STATION 327-333 QUEEN STREET WEST
DUNCAN STREET 5 MIN WALK (400 M) TO OSGOODE STATION
RICHMONDRRICCHHMOMO STREET WEST ONNDDST STTRRE JOHN STREET EETETTTW WEESTST
T
QUEEN STREET WEST PETER STREET
BEVERLY STREET » 327-333 Queen Street West: At the heart of one of the highest concentrations of tourist and pedestrians in Toronto CBRE Limited 9 |
GARDINER EXPRESSWAY
LOCATION OVERVIEW
FRONT STREET WEST 327-333 Queen Street West occupies a premier street-front location along Queen Street in the heart of Toronto’s Entertainment District. # " " # # SPADINA AVENUE situated in a unique area of Downtown Toronto between Spadina and University Avenues, where premiums are achieved for condo, ; < # Bell Lightbox – the home base for the annual Toronto International = = ' > ' ? Entertainment District is the city’s fastest growing residential area, experiencing unprecedented development supported by excellent public infrastructure. The Property is sits atop the 501 Queen Street : ' as well as connections with the Yonge-University subway line at both Osgoode Station and Queen Street Station. The combination of premier location, rapid development, and unmatched transit ' ' uses in Toronto’s most invigorating and rapidly intensifying district. | 10 327 – 333 Queen Street West Toronto
PROPERTY OVERVIEW CBRE Limited 11 | | 12 327 – 333 Queen Street West Toronto PROPERTY PROFILE
327-333 Queen Street West is a unique newly PROPERTY DETAILS built building, completed in 2013. The property Address 327-333 Queen Street West comprises 15,761 sq. ft. of rentable area and showcases 56 feet of frontage along the trendy Size (sq. ft.) 15,761 Queen Street West. The building features a Acres 0.36 combination of brick veneer masonry and stone Occupancy 100% tiles that seamlessly integrate the newly constructed Storeys 3 property with the surrounding historic area. The Class A Property consists of three levels, at grade retail Year Built 2013 space is entirely occupied by American Eagle ' Typical Floor Plate (sq. ft.) 5,200 by YYoga – the largest corporately owned yoga WAVG Inplace Rent American Eagle: $93.64 company in Canada. YYoga: $31.00 Term 7.2 years Additional Rent CAM $2.21 Realty Taxes $20.23 Projected NOI $814,826 Financing Free and Clear
5 YEAR NOI Year 1 Year 1 Year 2 Year 3 Year 4 Year 5 PSF Dec-2017 Dec-2018 Dec-2019 Dec-2020 Dec-2021 INCOME PROJECTION Base Rental Revenue $52.40 $825,839 $844,371 $880,170 $890,596 $901,233 Absorption & Turnover Vacancy $0.00 $0 $0 $0 $0 $0 Scheduled Base Rental Revenue $52.40 $825,839 $844,371 $880,170 $890,596 $901,233 Operating Recovery $2.39 $37,745 $38,907 $40,108 $41,346 $42,629 Admin Fee Recovery $3.23 $50,980 $52,638 $54,378 $56,158 $58,011 Realty Tax Recovery $20.02 $315,602 $323,493 $331,580 $339,870 $348,367 Total Reimbursement Revenue $25.65 $404,327 $415,038 $426,066 $437,374 $449,007 Potential Gross Revenue $78.05 $1,230,166 $1,259,409 $1,306,236 $1,327,970 $1,350,240 General Vacancy -$1.56 ($24,603) ($25,188) ($26,125) ($26,559) ($27,005) Effective Gross Revenue $76.49 $1,205,563 $1,234,221 $1,280,111 $1,301,411 $1,323,235 EXPENSE PROJECTION Operating Cost $2.47 $38,967 $39,942 $40,936 $41,963 $43,010 Realty Tax $20.02 $315,603 $323,492 $331,581 $339,869 $348,366 Non-Recoverable $0.00 $0 $0 $0 $0 $0 Management Fee $2.29 $36,167 $37,027 $38,403 $39,042 $39,698 Total Operating Costs $24.79 $390,737 $400,461 $410,920 $420,874 $431,074 Net Operating Income $51.70 $814,826 $833,760 $869,191 $880,537 $892,161 CBRE Limited 13 | | 14 327 – 333 Queen Street West Toronto FLOOR PLANS
MAIN FLOOR
HVAC PIPES
UP DN FHC
20'-0" 16'-1" 25'-7" 20'-0" 20'-2" ELEV CLEAR HEIGHT CLEAR HEIGHT= 13' -11" =38'- 1"
GARBAGE ROOM FHC 54'-11"
DN UP 5'-5" x 15'-7"
SECOND FLOOR
HVAC PIPES
DN
UP FHC
ELEV WINDOW DIMENSIONS OPEN TO BELOW AND LOCATIONS ARE APPROXIMATE CLEAR HEIGHT= 14' -5" 54'-7" FHC 31'-10"
HVAC PIPES UP DN
76'-1" CBRE Limited 15 |
SECOND FLOOR FHC DN
HVAC PIPES ELEV RESTRICTED CLEAR HEIGHT= 10' -9" HEADROOM 54'-6"
10'-6"
HVAC PIPES FHC 53'-1"
LADDER
DN TO ROOF
BASEMENT
19'-3" 65'-10"
UP 27'-5" FHC
SPRINKLER ROOM
ELEVATOR 6'-9" ELEV MACHINE CLEAR HEIGHT= 7'-1" x ROOM 22'-5" NO ACCESS PROVIDED FHC
ELECTRICAL ROOM 23'-11" UP
13'-4" | 16 327 – 333 Queen Street West Toronto
GARDINER EXPRESSWAY
FRONT STREET WEST GO TRANSIT LINE UNION STATION
KING STREET WEST ST. ANDREW STATION
ADELAIDE STREET WEST
JOHN STREET
UNIVERSITY AVENUE RICHMOND STREET YONGE-UNIVERSITY SUBWAY DUNCAN STREET
OSGOODE STATION 5 MIN WALKK (0((40044000 MM) TOTO OSGOOOOSOSGOODESGGOOOODDE STATIONSSTATAATTIOIOON QUEEN STREET WE
327-333 QUEEN STREET WEST BEVERLYB STREET CBRE Limited 17 |
PUBLIC TRANSIT ACCESS
510 STREETCAR The Property features exceptional public transit access serviced by a number of existing routes. Situated on top of the 501 Queen Streetcar route – Toronto’s longest surface route – the Property provides excellent access to the Financial Core as well as direct connections with the Yonge- SPADINA AVENUE University subway line at both Osgoode Station and Queens Station. The 501 streetcar route is the third busiest in the city with over 43,000 daily 504 STREETCAR riders.
The 510 Spadina streetcar, the cities second busiest route with 44,000 daily riders, is located only a short walk west of the Property. The 510 Spadina streetcar route, with its dedicated right-of-way access provides north-south service along the Spadina Avenue offering direct connections PETER STREET with the King Street West, Dundas West and College Street streetcars, as well as the Bloor Street subway line at Spadina Station.
T WEST # " % G # Express Airport transit network.
# J
EST 501 STREETCAR expanding the existing bicycle infrastructure. The Property is conveniently J " Westbound and Eastbound access available via Richmond and Adelaide Streets, respectively. The property is also in extremely close proximity to several of Toronto’s Bike Share locations, providing unparalleled transportation access to the Property. | 18 327 – 333 Queen Street West Toronto
2016 DEMOGRAPHIC SNAPSHOT - DOWNTOWN WEST DEMOGRAPHIC % TOTAL POPULATION PROFILE 2011 estimated 54,131 19.60% 2016 estimated 64,717 13.80% " 2021 Projected 73,620 through urbanization and immigration. It is V % Pop. Change (2011-2016) 19.60% populous city in North America supporting a % Pop. Change (2016-2021) 13.80% total population of 6.1M as of 2015. Downtown 2016 Total Population by Age 64,717 West is the most popular residential area in downtown Toronto, experiencing staggering population growth of 19.6% from 2011-2016, AGE GROUP and projected to increase 13.8% from 2016- 0 to 4 years 2,613 4.00% 2021. In addition to an exceptional growth 5 to 19 years 4,489 6.90% ] : " income characteristics with an average annual 20 to 24 years 3,791 5.90% household income of $100,975 as of 2016, 25 to 34 years 20,558 31.80% projected to increase by 17.7% by 2021. 35 to 44 years 14,832 22.90% Downtown West is a highly sought-after 45 to 54 years 7,377 11.40% location for young professionals, situated in 55 to 64 years 5,187 8.00% close proximity to the downtown core and well- serviced by the existing TTC network. Overall, 65 to 74 years 3,063 4.70% 55% of the population is between the ages 75 years & over 2,807 4.00% of 20-44 and with a mix of residential and Median Age 35.5 employment uses in the Downtown West.
2016 Total Census Families 12,148 Average Persons Per Family 2.7
Total Couples 10,012 82.40% Without children at home 5,647 46.50% With children at home 4,366 35.90% Lone-parent families 2,135 17.60% Children Per Census Family 0.8
2016 Households 35,623 Persons per household 1.77
Average household income $100,975 CBRE Limited 19 | | 20 327 – 333 Queen Street West Toronto CBRE Limited 21 |
RETAIL LEASING MARKET OVERVIEW
The Property features the potential to utilize already established The success of Downtown West restaurants and the cachet of retail space along Queen Street, which continues to be ideally being associated with Toronto’s trendiest neighbourhood has suited to restaurant, fashion, service or convenience based caught the attention of several prominent restaurant chains. retail. In addition, international fashion retailers are taking notice, " The Property is located amidst Toronto’s most dynamic retail Condominium development provides further opportunities leasing environment offering the city’s most diverse assortment for new market entrants accommodating a wide range of of tenants and retail concepts. Known for the city’s largest ' ` { concentration of restaurants, bars and night clubs, Queen in the area has also created strong demand for new grocery : ' stores with residents demanding unique urban concepts and back of one of the largest development periods in Canadian healthy organic options. All told, the future of Downtown West _ is bright experiencing dramatic rental growth driven by an residential condominium development has led to increased insatiable demand for retail space in Toronto’s most unique demand for a variety of retail formats and is creating a highly neighbourhood. competitive leasing environment. National tenants continue to < ' ' " buildings. | 22 327 – 333 Queen Street West Toronto UPCOMING DEVELOPMENTS ON QUEEN STREET WEST
A majority of Queen West retail ownership are private family holdings. Assembly of larger development sites has traditionally been a challenge.
| ' ; { and Spadina Avenue that will greatly enhance the pedestrian "
Allied Properties QRC Project at the southwest cor- ner of Queen Street West and Peter Street. Devel- opment will deliver approximately 14,000 sq. ft. of retail in Phase One at grade as part of a mixed ' " use. Phase One retail lays out in two sections, one at the corner of Queen Street West and Peter Street, and one at the rear of the site at Richmond Street West.
A future Phase Two is planned which will provide a + /// * '
The parking lot at 302-304 Queen Street West at Soho has been leased to Mountain Equipment Co- }/ /// * that will include underground parking. Construction is anticipated to begin in Q2 2017.
336 Queen Street West, formerly Le Chateau, has been purchased by a local investment group who plan to construct a 40,000 sq. ft. building featur- ' one below for approximately 36,000 sq. ft. in total. CBRE Limited 23 | | 24 327 – 333 Queen Street West Toronto RETAIL STREETSCAPE
TD Bank McDonald’s SPADINA AVENUE SPADINA AVENUE Basil Box CIBC Ardene Off the Wall Shoes A&W J.Lindeberge Horseshoe Tavern Due West H&M Mac Cosmetics #368 Naot Footwear Borderline Guess Clic Klak Nobis EB Games Shoes.com #358 Available Sublease NY body Piercing Burger Shoppe Star Fashion Jealousy Beauty & Life Sushi Xtra Spoof #350 Te Koop Fraiche Steve’s Music Store Geologic Keihl’s Lululemon (Original Store) Club Monaco Redevelopment Site Formerly Le Chateau Euroshoes 40,000 sq. ft. #336 (Pearl Group) Saje The Rivoli Bar/Restaurant Devine Beauty Boutique G-Star Raw The Body Shop Brandy Melville #326
Dr. Martens QUEEN STREET WEST Tatyana Adida Originals Pet Supply #322 BULWER STREET Baily Nelson Gorin Bros. Subway Starbucks #383 Vacant New Lululemon Allied Redevelopment Site (wider sidewalk) Cube Mixed Use 14,000 sq. ft. PETER STREET Lush Peter Pan Kazuo Mountain Equipment Co-op Vacant Site #367-369 Future Flagship Opening 2017 Will Build to Suit Build to Suit Single User 3,000 sq. ft. 3 levels 40,000 sq. ft. Plus Underground Parking 365 Queen Street West Vacant SOHO STREET 12,000 sq. ft. 3 levels Black Bull Mac Cosmetics M for Mendocino Telus Spec’s & Spec’s Timbuk2 Calforex Titika Fido Your Good Health Eko Jewelry Little Burgundy Vacant 800 sq. ft. Aldo MYNC ActiveA Surplus Aritzia Clothing 327-333 QUEEN STREET WEST Zara Icebreaker #278 Arcteryx David’s Tea Foot Locker Beverly Hotel #272-274 4,500 sq. ft. at grade (Rexall Pending) Yyoga AmAmerican Eagle BEVERLY STREET Sushi Time Shoppers Drug Mart Groovy Clothing Underground Public Parking So Hip It Hurts Brimz Black Market Drama Queen Clearly Contacts Vacant 4,000 sq. ft. #256 (Blaze Pizza Pending) Change Rudsak Collections Ho Su Japanese Restaurant Houka Holika Scarpino Shoes Gardenview Grocery Kallone Intimi JOHN STREET CBRE Limited 25 | | 26 327 – 333 Queen Street West Toronto
MARKET OVERVIEW CBRE Limited 27 | DOWNTOWN WEST OVERVIEW
Downtown West is the heart of urban lifestyle in Toronto S " luxury condominiums, world-class restaurants, nightlife and entertainment. The neighbourhood has undergone a dramatic transition from a textile and furniture manufacturing district fraught with derelict industrial buildings to the country’s preeminent destination for nightlife and entertainment. Queen West continues to emerge as Canada’s most diverse urban environment ' ' unique condominium projects.
Downtown West has seen unprecedented development in recent years, driven by young professionals demanding to ' < condominium projects in support of the staggering population growth and demand for dwellings close to the downtown core. Downtown West offers a truly unique lifestyle to residents, exemplifying the urbanization trend providing residents the potential to live, work and play all within walking distance of home. Residential development has led to exceptional demand for retail and employment uses in Downtown West garnering global recognition as a coveted location for start-up companies, new market the world. | 28 327 – 333 Queen Street West Toronto
TORONTO WEST DEVELOPMENTS
There are currently 53 active projects in the Downtown West area, in the immediate vicinity of the Property, which are about 89% pre-sold. The projects feature an average weighted price of about $674 per sq. ft. for remaining units. Absorption varies widely, as it is based on the size and location of the projects. All of the active projects are still under construction, scheduled for completion before the end of 2019. There are an additional 40 development applications in the area. The 40 speculative projects comprise an additional 21,674 units. With minimal standing inventory, the pipeline remains stable for new developments, with the potential for new projects to come online with occupancy in 2019 and beyond. The following table details active condominium projects in the West-Toronto area.
1 4
2 A
3 21 327-333 QUEEN STREET WEST
22 C
5 24 8 7 232 9 10 B 25 D 11 6 G 155 H 1212 133 E K F L 166 I M 14 J 1717 18 19 20 CBRE Limited 29 |
' ' ' {
ACTIVE PROJECTS Site Name Developer Occupancy Total Rem. % $ Per 70% Date Units Inv. Sold sq. ft. Absorption 1 Residences of 488 University Avenue Amexon November-17 453 1 100% $1,145 2 Months 2 Residences at RCMI on University Tribute Communities February-14 318 0 100% $753 2 Months 3 Form Tridel September-19 189 8 96% $726 2 Months 4 Dragon Condos Ideal Developments October-16 95 7 93% $695 5 Months 5 Smart House Urban Capital Property Group and Malibu Investments May-17 241 9 96% $794 11 Months 6 Shangri-La Westbank Projects Corp. and Peterson Investment Group October-12 393 3 99% $2,620 48 Months 7 Picasso on Richmond Mattamy Homes and Goldman Group June-16 409 4 99% $656 3 Months 8 330 Richmond Greenpark Homes June-18 310 23 93% $750 7 Months 9 Studio on Richmond - Building B Aspen Ridge Homes July-15 333 7 98% 735 6 Months 10 Studio2 on Richmond Aspen Ridge Homes March-16 405 59 85% 668 7 Months 11 Bond Condominiums Lifetime Developments February-17 386 18 95% 840 1 Month 12 Pinnacle on Adelaide Pinnacle International September-14 587 4 99% 795 38 Months 13 PJ Pinnacle International June-19 368 207 44% 660 10 Months (44%) 14 Theatre Park Lamb Development Corp. and Harhay Construction January-15 233 15 94% 985 9 Months 15 87 Peter Menkes December-17 630 3 100% 897 25 Months 16 King Charlotte Lamb Development Corp. and Niche Development December-15 232 5 98% 668 36 Months 17 King Blue by Greenland - North Tower Greenland Group Co. June-18 387 28 93% 738 15 Months 18 King Blue by Greenland - South Tower Greenland Group Co. June-18 521 7 99% 675 15 Months 19 Mercer Graywood Developments Ltd. And Beaverhall Homes January-15 390 19 95% 702 12 Months 20 Bisha Lifetime Developments April-17 334 8 98% 807 12 Months 21 SQ Tridel May-17 241 6 98% 633 8 Months 22 SQ2 Tridel October-18 169 50 70% 591 14 Months 23 Fabrik Menkes June-16 171 4 98% 720 35 Months 24 James Lamb Development Corp. November-18 135 43 68% 696 10 Months (68%) 25 Brant Park Lamb Development Corp. January-16 243 31 87% 710 31 Months
APPLICATIONS Municipal Address Height (Storeys) Floor Space Index Total Units A 234 Simcoe Street 17, 24, and 54 12.7 1129 B 40-58 Widmer Street 40 17.9 426 C 170 Spadina Avenue 19 10.9 210 D 102 Peter Street 40 and 48 - 899 E 263 Adelaide Street West 42 20 328 F 283 Adelaide Street West 48 - 372 G 46 Charlotte Street 46 - 248 H 30 Widmer Street 51 29 461 I 8 Widmer Street 56 19.1 583 J 401, 407-409 & 415 King Street West 56 - 615 K 217 Adelaide Street West 56 28.3 410 L 100 Simcoe Street 59 - 524 M 260-270 and 274-322 King Street West 82 and 92 18.1 1949 | 30 327 – 333 Queen Street West Toronto
CURRENT LAND USE CONTEXT
9 { # ' years, drastically changing the streetscape and character of the neighbourhood. Queen Street West features a broad land use context which includes street-front restaurants, theatres and open spaces. The neighbourhood continues to see ' ' of height and density. There are several sites in the immediate vicinity that are poised for redevelopment for high density residential as well as several recently completed projects. Notable projects in the area include TIFF Bell Lightbox, M5V Condos and King-Blue Condos. An eclectic mix of old and new, the Queen- Spadina East Precinct features a range of brand new commercial and residential developments, timeless sandstone-clad street-front retail, historic theatres and open spaces which integrate seamlessly to create an area which is both the character of the area will continue to change as this historic neighbourhood continues to intensify.
327-333 QUEEN STREET WEST
JOHN STREET CBRE Limited 31 |
PETER STREET
RICHMOND STREET WEST
QUEEN STREET WEST
BEVERLY STREET | 32 327 – 333 Queen Street West Toronto
TENANCY SUMMARY CBRE Limited 33 | AMERICAN EAGLE OUTFITTERS
G { S accessory retailer, with over 1,000 stores in the United States, Canada, Mexico, China, Hong Kong, and the United Kingdom, and shipping services to an additional 81 countries worldwide. ' offer high-quality, trendy clothing and accessories at affordable prices. The company has a market capitalization of 3.37B and has become a household name to members of the millennial generation, currently trades publicly under the New York Stock Exchange at approximately eighteen dollars per share.
YYOGA
YYoga is a community of yoga studio and lifestyle centres dedicated to promoting holistic health and wellness. Based out of Vancouver, YYoga is the largest corporately owned yoga company in Canada – YYoga operates 13 studios offering more than 900 classes per week in locations including Vancouver, Whistler, and Toronto. In addition as an infrared sauna and mat and towel services meaning that $$ S
Tenant Type & Term Size Rate Changes Changes Notes Suite Number (sq. ft.) per sq. ft. On To American Eagle Apr-2014 to 5,266 $93.64 May-2017 $95.51 Retail, Suite: 100Jan-2025 May-2018 $97.42 May-2019 $99.37 May-2020 $101.36 May-2021 $103.39 May-2022 $105.46 Pure Freedom Yoga Centres Oct-2013 to 10,495 $31.00 Retail, Suite: 100A/200Oct-2023 Total Occupied 15,761 100.0% Total Vacancy 0 0.0% Total 15,761 | 34 327 – 333 Queen Street West Toronto
FINANCIAL OVERVIEW CBRE Limited 35 |
% = # { V $ FINANCIAL A prevailing market rate of 3.0% of effective gross revenue has been applied as a management fee. This MODEL expense is offset by a contractual administration fee which generally states that the Landlord is entitled to ASSUMPTIONS the collection of an admin fee equal to the amount paid to the Landlord’s agent in respect of the management or 15.0% of the operating expenses # ; V _ # _ ] (excluding realty taxes). 44 MLA ASSUMPTIONS ; 4 +/4 ] 31, 2027. All budget information is based upon American Yyoga the Vendor’s 2016 calendar year budget (ending Eagle ] 84? Analysis Start Date January 1, 2017 at the beginning of each calendar year. Market Rent $110.00 $38.00 Term 10 years 10 years % : | { Tenant Inducement The annual growth rate used for all revenue and New $35.00 $25.00 expense items is 2.5%. This assumption remains Renewal $0.00 $0.00 constant throughout the duration of the projection Leasing Commissions term. New 6.0% Yr 1/3.0% 6.0% Yr 1/3.0% % V V$ : V Thereafter Thereafter Renewal 3.0% Yr 1/ 1.5% 3.0% Yr 1/ 1.5% A vacancy allowance has been provided in the cash Thereafter Thereafter ' Renewal Probability 75.00% 75.00% or bad debt allowances. This allowance is equivalent Downtime 6 Months 6 Months to 4.0% of the potential gross revenue but is reduced 2.50% ' ' expiries and leasing requirements. General Vacancy 4.00% of PGR Management Fee 3.00% of EGR Structural Reserve 1% of EGR | 36 327 – 333 Queen Street West Toronto 11 YEAR CASH FLOW
Year 1 Year 1 Year 2 Year 3 Year 4 PSF Dec-2017 Dec-2018 Dec-2019 Dec-2020 INCOME PROJECTION Base Rental Revenue $52.40 $825,839 $844,371 $880,170 $890,596 Absorption & Turnover Vacancy $0.00 $0 $0 $0 $0 Scheduled Base Rental Revenue $52.40 $825,839 $844,371 $880,170 $890,596 Operating Recovery $2.39 $37,745 $38,907 $40,108 $41,346 Admin Fee Recovery $3.23 $50,980 $52,638 $54,378 $56,158 Realty Tax Recovery $20.02 $315,602 $323,493 $331,580 $339,870 Total Reimbursement Revenue $25.65 $404,327 $415,038 $426,066 $437,374 Potential Gross Revenue $78.05 $1,230,166 $1,259,409 $1,306,236 $1,327,970 General Vacancy -$1.56 ($24,603) ($25,188) ($26,125) ($26,559) Effective Gross Revenue $76.49 $1,205,563 $1,234,221 $1,280,111 $1,301,411 EXPENSE PROJECTION Operating Cost $2.47 $38,967 $39,942 $40,936 $41,963 Realty Tax $20.02 $315,603 $323,492 $331,581 $339,869
Non-Recoverable $0.00 $0 $0 $0 $0 Management Fee $2.29 $36,167 $37,027 $38,403 $39,042 Total Operating Costs $24.79 $390,737 $400,461 $410,920 $420,874 Net Operating Income $51.70 $814,826 $833,760 $869,191 $880,537 CAPITAL COSTS Leasing Commissions $0.00 $0 $0 $0 $0 Tenant Inducements $0.00 $0 $0 $0 $0 Total Capital Costs $0.00 $0 $0 $0 $0 Cash Flow Before Debt Service $51.70 $814,826 $833,760 $869,191 $880,537 CBRE Limited 37 |
Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Dec-2021 Dec-2022 Dec-2023 Dec-2024 Dec-2025 Dec-2026 Dec-2027
$901,233 $912,081 $932,114 $961,811 $1,101,119 $1,115,823 $1,133,834 $0 $0 $0 $0 ($117,629) $0 $0 $901,233 $912,081 $932,114 $961,811 $983,490 $1,115,823 $1,133,834 $42,629 $43,940 $45,126 $46,318 $44,895 $48,665 $49,880 $58,011 $59,907 $61,564 $63,222 $61,207 $66,421 $68,081 $348,367 $357,076 $366,004 $375,152 $363,163 $394,144 $404,000 $449,007 $460,923 $472,694 $484,692 $469,265 $509,230 $521,961 $1,350,240 $1,373,004 $1,404,808 $1,446,503 $1,452,755 $1,625,053 $1,655,795 ($27,005) ($27,460) ($28,096) ($28,931) $0 ($32,501) ($33,117) $1,323,235 $1,345,544 $1,376,712 $1,417,572 $1,452,755 $1,592,552 $1,622,678
$43,010 $44,088 $45,189 $46,319 $47,477 $48,660 $49,880 $348,366 $357,076 $366,003 $375,153 $384,531 $394,145 $403,998
$0 $0 $0 $0 $0 $0 $0
$39,698 $40,366 $41,302 $42,527 $43,582 $47,777 $48,680 $431,074 $441,530 $452,494 $463,999 $475,590 $490,582 $502,558 $892,161 $904,014 $924,218 $953,573 $977,165 $1,101,970 $1,120,120
$0 $0 $0 $0 $161,490 $0 $0 $0 $0 $0 $0 $53,436 $0 $0 $0 $0 $0 $0 $214,926 $0 $0 $892,161 $904,014 $924,218 $953,573 $762,239 $1,101,970 $1,120,120 | 38 327 – 333 Queen Street West Toronto
THE CITY OF TORONTO CBRE Limited 39 |
TORONTO – A BEACON OF STRENGTH IN A WORLD OF UNCERTAINTY
Toronto is the largest city in Canada and the provincial capital of Ontario with Toronto metropolitan area supporting a total population of 6.1 million as of 2015. It is the 4th most populous city in North America and one of the most multicultural cities in the world. At a time of recent uncertainty impacting major global economic centres, Toronto is the epicenter of one of the strongest V < : Forum as having the soundest banking system in the world, six years in a row. V " ' in a variety of sectors including retail & wholesale, manufacturing, information and technology, media, high-tech pharmaceutical and biotechnology, ' ' ' Toronto is thriving complimented by a vibrant mosaic of neighbourhoods that * all of which are woven together by a series of main streets and supported by an expansive public transit network. A hotbed for international business, culture and equality, Toronto is a truly modern city and a world leader in economic and social development. | 40 327 – 333 Queen Street West Toronto
THE FINANCIAL SECTOR – A GLOBAL PLAYER IN INTERNATIONAL BUSINESS Canadian branches/subsidiaries. Canadian banks ranking 3rd in the 2016 PwC Cities of Opportunities have been recognized among the safest banks in the Study, #1 most tax competitive major city by KPMG, world; a stability that fueled the growth of Toronto’s 10th of 84 cities in the 2016 Global Financial Centres ! * ' + Index (GFCI); 3rd most business friendly city in the crisis of 2008. Toronto is also home to the majority Americas (FDi American Cities of the Future 2015- of Canadian pension funds including the 4 largest ! pension plans in the country with combined assets sector in North America employing approximately : <=> * 251,000 workers. As a hub for international business, sector is the backbone of the economic system in the City has one of the highest concentrations of Canada and provides investment and funding for a ! " ' variety of businesses and new ventures. is the headquarters of 5 of the largest banks in the country and the majority of foreign banks with CBRE Limited 41 |
» Toronto has the third largest financial services sector in North America
EMPLOYMENT – THE FOUNDATION UPON WHICH A GREAT CITY IS BUILT Toronto accounts for approximately one-sixth of the for downtown locations, workers demand to be in a national workforce. The City is headquarters to more central location in order to enjoy shorter commute national and international companies than any other + ? + : + X+ Canadian city, including six of Canada’s leading level of amenities. This resurgence of growth in the + ? ! * Downtown Core has also brought with it a number ? ! * @ ? of businesses looking to capture the increased level * X * @ ! of retail expenditures spawned by recent population + ? growth. Specialty stores and big box companies alike home to nine of Fortune Magazine’s Top 500 Global are searching for new urban concepts to get closer Companies. These companies include Royal Bank to the growing population base and capture a larger of Canada, George Weston, Manulife Financial, share of expenditures. Convenience has become a Bank of Nova Scotia, ONEX, Toronto-Dominion major driver of retail success and many businesses Bank and Sun Life Financial. In recent years, more have started to capitalize on changing trends. Overall, businesses are choosing to locate in the Downtown unemployment has decreased slightly in 2015-2016 Core rather than suburban locations. This trend from 7.5% to 7.2%. Moreover it is expected to steadily has been driven largely by population growth and decline through 2020 where unemployment is forecast : * X @ ' @ ' ' at 6.1% (Source: Conference Board of Canada). These area. In order to attract talented workers, companies metrics show support for a strengthening economy and now have to choose locations that appeal to the a strong employment market in the City of Toronto. targeted employees. Despite higher real estate costs | 42 327 – 333 Queen Street West Toronto
TOURISM – A WORLDWIDE DESTINATION In a recent press release, Tourism Toronto announced that the City reached new records in 2015, welcoming the highest number of overnight visitors and leading the county in hotel occupancy and hotel room nights sold. Additionally, for the fourth year in a row Toronto saw an increase in overnight visitors from the U.S. The City is the most-visited destination in Canada by fellow Canadians with 10.5 million overnight visits (and a further 25.5 million same day visits) in 2014. These visits generated spending of $2.44 billion in the City. In 2014, Tourism Toronto and its partners also booked 665 future meetings and conventions that will bring 463,400 attendees to Toronto and generate 640,345 future hotel room nights. Of these meetings booked, 16 are considered “major meetings” with more than 2,000 attendees at multiple hotels. With these events injecting over $550 million into the local economy, the tourism and hospitality industries continue to thrive employing approximately 300,000 people in the Toronto Region. These meetings will be based at the Metro Toronto Convention Centre, which has more than two million square feet of exhibit, theatre and meeting < 4 4 square feet Toronto congress Centre and the 483,000 square feet International Centre in the Toronto airport market.
The City has become world renowned for its Toronto International Film Festival > _==? ' ' ' 8// / Toronto’s vast network of theatres, including Roy Thompson Hall and the TIFF Bell Lightbox. Toronto is also recognized as Canada’s sports capital with major > ; ? < > ? < (Toronto Raptors), CFL football (Toronto Argonauts) and major league soccer (Toronto FC). The City is the third largest live theatre city globally next to New York and London and has numerous attractions including The Royal Ontario % | V V V CN Tower, Rogers Centre, Hockey Hall of Fame, Toronto Eaton Centre and Ontario Science Centre. Toronto’s tourism infrastructure has been enhanced with newer facilities constructed since 2006 including the Four Seasons Centre for the Performing Arts, BMO Field at Exhibition Place and most recently Ripley’s Aquarium of Canada. CBRE Limited 43 |
] # N _]{ = | % { ] # { _ V ]_ HISTORY Toronto has experienced strong investment activity with building permits averaging between $10 and $15 billion per year between 2010 and 2015, which can be largely attributed to strong residential construction. More than 63% of the $15.3 billion in building permits issued for the Toronto Region in 2015 were for residential projects.
There were 122 high rise buildings under construction in the city of Toronto as of December 2014 (Emporis), making Toronto second to only New York in number of high rise buildings under construction. This momentum has continued through 2016 with 66 high-rise residential buildings under construction and another 45 projects ; +/4 > ?
Some of the larger planned development projects that will positively impact the Toronto market include: A waterfront revitalization strategy to improve Toronto’s international image as part of investment in excess of $1 Billion in several clusters along the City’s waterfront.
# % 4 } the construction of six new indoor venues. Toronto attracted 250,000 visitors from 42 participating countries < ' ; +/4 V Athletes’ Village located in the West Don Lands in the east end of Toronto.
Construction for the new express rail link connecting downtown to Toronto’s Pearson International Airport +/4 < " % < % < > ? # S shuttles passengers from the airport to downtown Toronto’s Union Station in approximately 25 minutes, with ' ' # International Airport annually and that number is expected to reach nine million by 2020. The total budget for the Union Pearson Express was $456 million.
Toronto’s Union Station is currently undergoing extensive renovations totaling over $800 Million to improve " ' >% _ ? create additional commercial & retail space. The Project will be completed in phases, running from 2015 through to 2017. DOWNTOWN TORONTO RESIDENTIAL MARKET The Downtown Toronto residential market has been incredibly strong in recent years with an abundance of condominium development on the back of historical high unit pricing. Increased demand for condominium " ] V < " < ' commercial areas which are prime targets for condo developers to acquire in pursuit of affordable land close to the Downtown Core. Development has been concentrated along major transit corridors including Yonge Street, Bay Street, Bloor Street, Church Street, and King Street due to proximity to the Downtown Core and ] ] V developers have had fewer options leading to higher land values. Strong population growth has resulted in healthy absorption rates for new supply and the condominium market continues to thrive, despite an increased level of supply and rising interest rates. | 44 327 – 333 Queen Street West Toronto
OFFERING PROCESS CBRE Limited 45 | MEMORANDUM CONFIDENTIALITY
CONTENTS Upon receipt of this CIM, prospective purchasers will have " > PV V _ >PV_Q? Agreement”) under which they have agreed to hold and prepared by the Advisor and is being delivered to prospective V_ purchasers to assist them in deciding whether they wish to Prospective purchasers will not, directly or indirectly, disclose acquire the Property. or communicate or permit anyone else to disclose or communicate this CIM or any of its contents or any part thereof This CIM does not purport to be all-inclusive or to contain all the information that a prospective purchaser may require in deciding whether or not to purchase the Property. This CIM is V for information and discussion purposes only and does not provided and approved by the Vendor. Prospective purchasers constitute an offer to sell or the solicitation of any offer to buy will not use or permit this CIM to be used in any manner the Property. The CIM provides information relating to certain detrimental to the interests of the Vendor, the Advisor or their ' Property. purchase of the Property. The recipient of this CIM agrees to provide the Advisor with a list of those persons to whom this The information in this CIM has been obtained from various CIM or any information contained herein is provided. sources considered reliable. Neither the Vendor nor the Advisor make any representations, declarations or warranties, The terms and conditions in this section with respect to express or implied, as to the accuracy or completeness of the information or statements contained herein or otherwise and “Memorandum Contents” relate to all Sections of the CIM as such information or statements should not be relied upon if stated independently therein. by prospective purchasers without independent investigation ' ' " The CIM shall not be copied, reproduced or distributed, in any and all liability for any errors or omissions in the CIM or whole or in part, to other parties at any time without the prior any other written or oral communication transmitted or made written consent of the Vendor. It is made available to prospective available to prospective purchasers. purchasers for information purposes only and upon the express understanding that such prospective purchasers will use it only If any information relating to the Property, in addition to for the purposes set forth herein and upon and subject to the information provided in this CIM, is provided at any V G * time, orally or otherwise, by the Vendor or the Advisor, recipient will promptly return all material received from the such information is provided as a convenience only without Vendor and the Advisor (including the CIM) without retaining representation or warranty as to its accuracy or completeness any copies thereof. In furnishing the CIM, the Vendor and the and such information should not be relied upon by prospective Advisor undertake no obligation to provide the recipient with ' ' access to additional information. The division of the CIM into sections, paragraphs, sub- paragraphs and the insertion or use of titles and headings are for convenience of reference only and shall not affect the construction or interpretation of this CIM. | 46 327 – 333 Queen Street West Toronto OFFERING SUBMISSION PROCESS GUIDELINE
Recipients of this CIM acknowledge that they are the Vendor Proposals for the Property will be evaluated primarily on has adopted a negotiated sale process. Based on information the consideration offered, the method of payment of the contained in this CIM and other information that may be consideration, the prospective purchaser’s ability to complete made available upon request, interested parties are invited the transaction, and the proposed date and conditions of to submit a proposal that addresses the requirements outlined closing. P{ % Q A proposal should outline the terms for the purchase of the CBRE is asking that bids for the Property be submitted by 4:00 Property and should include, at a minimum, the following pm, Thursday, October 13th, 2016. information and items:
Submissions should be directed electronically to: • #
V < • ] * 145 King Street West, Suite 1100 | 4; • # ] { V % { { • ' S VV < # < : • Terms and conditions, including a timeline for APS • Prospective purchasers should note that the Vendor is under no obligation to respond to or accept any proposal.
The Vendor reserves the right to remove the Offering from the market and to alter the offering process described above and timing thereof, at its sole discretion. CBRE Limited 47 | SALE ADVISORS
CONDITIONS The Advisor is acting solely as agent for the Vendor and not as agent for the purchaser. All inquiries regarding the Property or The proposal should be in the Purchaser’s Agreement of any information contained in this CIM should be directed to # { # " CBRE Limited, Brokerage, as Advisor for the Vendor: to be purchased on an “as is, where is” basis and there is no warranty, express or implied, as to title, description, condition, ` * CBRE Limited, Brokerage quality thereof and without limiting the foregoing, any and all \ ' ' ]* conditions or warranties expressed or implied will not apply 145 King Street West and are to be waived by the purchaser. Suite 1100 | 4; Any information related to the Property which has been or will be obtained from the Vendor or the Advisor or any other person, by a prospective purchaser, has been prepared and provided solely for the convenience of the prospective purchaser and Peter D. Senst* will not be warranted to be accurate or complete and will not President Canadian Capital Markets form part of the terms of an agreement of purchase and sale. 416 815 2355 [email protected]
V % Senior Vice President 416 815 2398 [email protected]
Stuart A. Smith* Vice President 416 815 2392 [email protected]
*Sales Representative 145 King Street West, Suite 1100 | Toronto, Ontario | M5H 1J8
Peter D. Senst* Casey T. Gallagher* Stuart A. Smith* President Canadian Capital Markets Senior Vice President Vice President 416 815 2355 416 815 2398 416 815 2392 [email protected] [email protected] [email protected]
V < ' V contractors (“CBRE”). The information set out herein, including, without limitation, any projections, images, opinions, assumptions and estimates obtained from > P_ Q? ' V V of the Information. CBRE does not accept or assume any responsibility or liability, direct or consequential, for the Information or the recipient’s reliance upon the Information. The recipient of the Information should take such steps as the recipient may deem necessary to verify the Information prior to placing any reliance upon the Information. The Information may change and any property described in the Information may be withdrawn from the market at any time without notice V V V ' < V countries. All other marks displayed on this document are the property of their respective owners. All Rights Reserved.