Behind The Deal: Toronto’s First Condo Replacement
Metropia and Capital Developments are proposing what they say will be Toronto's first condo replacement, constructing a new 48-storey tower on Roehampton Avenue where an eight-storey '80s era building currently stands.
Assembly of 39-41 Roehampton was super complicated, “and we had to be very creative,” Metropia president and chief operating officer David Speigel said. It involved negotiations with the condo board, which needed 80% approval from its 27 owners — repped by The Behar Group Realty — to sell to the developers. There was also adjacent Kohai Educational Centre, a private elementary school, which hoped to stay put until 2019. And Bell Canada, a massive corporation that agreed to sell 25 feet from its parking lot to give the tower its required setback under TO’s tall-building guidelines. (Next door Speigel’s firm is developing E Condos, a JV with Bazis Inc. and RioCan REIT.)
Behar Group’s Greg Evans, the listing broker for the condo, said the deal, which closed last month, was unlike any other he has done. Normally on a condo site he would be working with a commercial property owner or landowner who is familiar with the sale process, timing and pricing structures. “Here you’re dealing with individual homeowners,” so education was required, and lots of listening. “It was a unique situation, with many stakeholders,” Evans said, and the condo board and its lawyer were instrumental in keeping the sale on track. “This was more about relationships and communication style than doing a deal.”
The condo owners — over 80% of whom approved the sale — got good value for their units (roughly $550/SF), “better than if they tried to sell on the market,” Speigel said. As for school officials, they wanted the school to stay open until 2019, but the project should be underway by then, Speigel said, “so we had to get them to move earlier." The developer also had to convince Bell Canada to sell part of its parking lot to give the proposed condo building its required setbacks, a tough task but it was the key to unlocking the development’s viability.
The Roehampton condo will be wrapped in white glass, contrasting the black veil covering E Condos’ 36- and 58-storey towers. “It will be dramatic and cool,” Speigel said. “Nicer designs than you’re seeing in other condos around here.” The two projects are envisioned as cousins, not sisters, and there will be a small public park space between them. Residents of the Roehampton building and Bell Canada staffers will enjoy direct access to the subway via E Condos. That “warm connection” translates into $25 more per square foot on the net selling price of units, Speigel said, “which enabled us to offer more for the land.”