A large swathe of retail properties near a future metro station at Langelier and Jean Talon in the Montreal borough of Saint Leonard will be demolished to make room for about 25,000 housing units, according to a long-term plan that is crawling its way through the municipal approvals process.
Properties slated to be razed include the Carrefour Langelier shopping centre, a property that Mach Group purchased in 2020 for $58 million, which is expected to be replaced with five residential towers rising to 25 floors, well above the previous limit of 11 in the area.
The shopping centre, completed in 1972, is dotted with vacant retail spaces and is assessed at $48 million.
Borough authorities have given their blessing to Mach’s project, and the plan is expected to receive further approval by the City Council before construction begins in roughly two years.
Mach has similar plans for a nearby Maxi grocery store that it purchased along with two adjacent retail outlets for $28.6 million in January.
The two properties help make Mach the biggest stakeholder in the future transit-oriented development project, as owners of almost half of the properties to be redeveloped. Other owners of properties in the area to be rezoned include BMTC Group, the publicly traded company associated with the Tanguay furniture stores, Desjardins, CPD Developments and Transgesco, the real estate arm of Montreal’s public transit system. Unlike Mach, the other owners have not yet moved forward with proposals with local officials.
The residential rezoning is part of an initiative to encourage transit-oriented developments near the metro station as the city seeks to have thousands of homes built near the five transit hubs to be added to the blue line in 2031. The homes aim to help counter the housing crisis that saw national residential rental vacancy rates fall to 1.5% in 2023 and 2.2% in 2024.
Retail lease obstacles
The transformation from parking spaces and retail aisles to residential high rises will likely be complicated, as seen in the example of Forum Group’s IGA grocery store-anchored strip mall at 7150-7190 Langelier across the street that is also included in the zoning change.
Demolishing the strip mall, assessed at $19.2 million, to make it part of a larger residential development could prove complicated, as Forum has long-term renewable leases with retail outlets occupying the property, including Sobey’s, the Nova Scotia-based firm that manages the IGA outlets. “We have been working with the city to finalize a major redevelopment of our site, eventually,” Dean Mendel, Forum founding partner, said in an email to CoStar News.
Getting the retail outlets to go along could prove difficult, as many retail tenants are under no obligation to leave. “Most national and regional tenants have options to renew, so the landlord is not in control of timing,” Mendel said.
The retail tenants would likely insist on having a new replacement store completed before closure of the existing outlet, Mendel noted, and they might not be keen on the rebuild as the many phases of disruptive construction would likely harm sales. Store owners would also have to be satisfied with a different style property that would likely come with underground parking and more columns inside the stores, elements that retail tenants often disfavor, according to Mendel.
One countervailing factor is that more people in the area would likely mean higher retail sales. “The stores would benefit from lots of residential units with more customers,” Mendel said.
According to maps presented at public hearings, the rezoning to allow for the transit-oriented developments spans from Forum’s IGA strip mall on the southwest to Mach’s Maxi store at the northeastern corner. Some structures are relatively recent, including a stand-alone two-storey retail building adjacent to the future metro entrance and currently occupied by a TD Bank. The building was completed in 2013 and belongs to Mach; it has a municipal valuation of $10.4 million.