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Dundas-Edward Centre Swapped for $167 Million

New Owners See Development Potential but for Now Focused on Upgrading and Repositioning Property
March 5, 2018
Billed as a one million-square-foot development opportunity, the new owners of the Dundas-Edward Centre say they are looking for enhanced income from the 416,603 square feet of office space at the site.

Crown Realty Partners and Crestpoint say they have closed on a 50/50 joint venture that will see them take over the two-building office complex made up of a 26-storey building at 180 Dundas St. W. and 15-storey structure at 123 Edward St. The sale also included an adjacent, 303-space parking structure.

"We have millions of dollars in upgrades that we are planning," said Emily Hanna, partner with investments of Crown Realty Partners. "It's not going to happen tomorrow, but there will be lobby upgrades, exterior upgrades. We are going through the planning stages right now."

Publicly-traded Northwest Healthcare Real Estate Investment Trust had put the properties on the market as part of a sale of non-core assets.

"There are a lot of other tenancies that we see," said Hanna about the building, which has catered to the medical industry until now. The building is 92 percent leased. "Given that it is between two subway stations, there is a strong reason to appeal to a wider set of tenants looking for urban office space."

Crown will act as the property manager for the $167 million deal, the third acquisition made on behalf of Crown's fourth value-add fund, Crown Realty IV Limited Partnership, and Crestpoint's Core Plus Real Estate Strategy Fund. This is the second investment made by Crown in partnership with Crestpoint.

"There is clearly a demand in this area for traditional office users," said Hanna, noting the partnership is actively looking at repositioning what is ultimately a long-term development play.

The brochure for the site noted it is situated on a sizable 1.1-acre site with more than one million square feet of mixed-use density potential. "The property's upside opportunities are uniquely multi-dimensional," brokers boasted during the sale.

Hanna said the opportunity is "for immediate repositioning" and it will look at other redevelopment and rezoning, but no existing tenants are being asked to leave.

"We are excited to complete another acquisition with our partners at Crown as we work together to elevate the profile of this prominent site in downtown Toronto and unlock its inherent value," said Max Rosenfeld, vice-president of asset management and acquisitions with Crestpoint Real Estate Investments Ltd., in a statement.

For more information on the transaction, please see CoStar Comp #4155024.

Garry Marr, Toronto Market Reporter  CoStar Group   

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