RBC office tower at 610 ft. and 43 floors
Cadillac Fairview tower to end Toronto dry spell
First major office project in 14 years expected to spark downtown development
REAL ESTATE REPORTER
Cadillac Fairview Corp. Ltd. will announce today that it is ready to start building a new tower in Toronto, ending a 14-year drought in major downtown office construction in Canada's largest city and kicking off an expected wave of activity in that market.
The new tower will be located west of the financial district at Simcoe and Wellington Streets and will be built as part of a new Ritz-Carlton hotel and condominium project that will rise beside it on the site.
Cadillac Fairview, along with a handful of rival developers, has had plans for a Toronto tower on the books for several months, but was unwilling to break ground without first leasing a sizable block of space. "No one is going to put up a building in Toronto without a major tenant," one real estate executive said recently. "Everyone is being extremely cautious in this market."
The Royal Trust unit of Royal Bank of Canada is widely expected to be the lead tenant of the project, sources in the industry said, with final approval of the deal reached last week.
Royal Trust currently has its name on one of the towers of the Toronto-Dominion Centre, another building owned by Cadillac Fairview, the commercial real estate arm of Ontario Teachers Pension Plan.
Today's announcement will likely be the first of two or three new Toronto office developments to be announced this year.
Telus Corp. also is in the final stages of negotiating a leasing deal with privately owned Menkes Developments that would see its name on a new tower to the west of the Air Canada Centre, real estate sources say. That tower would be next to the railway lines and would be linked to Union Station through an underground tunnel. The move would give the Vancouver-based company a new, higher profile in the Toronto market.
A spokeswoman for Telus said the company cannot comment on the matter while negotiations are still taking place.
Today's announcement by Cadillac Fairview marks a turning point for Toronto and the beginning of what one real estate executive called a "mini development wave" in a city that has seen little new downtown office space in recent years.
"In the Toronto core the race is now on," Blake Hutcheson, president of CB Richard Ellis in Canada said recently. Higher rents and lower vacancy rates are creating a market where office construction in downtown again makes sense, he told an industry forum earlier this month.
Demand for office space in Toronto's financial core spiked in the first quarter, numbers from Cushman & Wakefield LePage show, sending vacancy rates down to 6.7 per cent from 7.9 per cent the previous quarter, the biggest drop in five years.
"We haven't seen this kind of confidence in a number of years," said Paul Morse, the firm's senior vice-president in charge of leasing.
The newest building to go up in Toronto's financial core is the mid-sized Maritime Life Tower constructed by the former O&Y Properties Corp. in 2003. A few others also have been built on the edges of the downtown's central office area, but the bulk of downtown construction in recent years has been in the city's booming condominium market.
The last major office building to rise in the downtown was the Bay Wellington Tower of BCE Place, finished in March, 1992.
Plans for this latest building were outlined by Cadillac Fairview last fall in a bid to get the jump on rival projects. They call for a 48-storey, $400-million project with 1.2 million square feet of space, slightly smaller than the city's current bank towers. More details of the project are expected in an announcement from the company this morning.
For months, three or four possible new office projects have jockeyed for position -- and major tenants -- in a race to be the first project out of the gate.
Brookfield Properties also is on the hunt for tenants so that it can begin construction on a revised version of its long-dormant Bay-Adelaide Centre.
Cadillac Fairview secures RBC and RBC Dexia as lead tenants for landmark office property in downtown Toronto
RBC Centre becomes first major development in the core in over ten years
TORONTO, March 27 /CNW/ - The Cadillac Fairview Corporation Limited
announced today that it has signed the RBC Financial Group and RBC Dexia
Investor Services as lead tenants for a new office tower to be developed in
RBC Centre will be a 43-storey, office building at an estimated
construction cost of $400 million. The new tower will be located on the
southwest corner of Wellington and Simcoe Streets, across from Roy Thomson
Hall. RBC and RBC Dexia together will lease 410,000 square feet for a 15-year
The building will feature a nine-storey, 400,000-square foot podium with
48,000-square foot floor plates; a 34-storey office tower with 25,000-square
foot floor plates; 15,000 square feet of retail; and over 400 parking stalls.
It will also have an 18-inch raised floor throughout, floor-to-ceiling glass,
flexible HVAC control that allows for individual cooling at low cost; and
sensors that monitor light requirements.
"Cadillac Fairview is excited to be the developer of the most significant
new building in downtown Toronto in the last 15 years," said John Sullivan,
Senior Vice-President of Development for Cadillac Fairview. "We have been in a
tight competition to secure a lead tenant. Our ability to sign a major client
ahead of other substantial planned developments is a testament to the quality
of this new asset and the invaluable dedication of our team."
With its striking modern architecture, the 1.2 million-square foot RBC
Centre is destined to be a Toronto landmark. It was designed by Kohn Pedersen
Fox (KPF) Associates Architects and Planners, based in New York; Bregman +
Hamann Architects of Toronto; and Sweeny, Sterling, Finlayson & Co. Architects
Inc. of Toronto.
"This is a very exciting development for us," said José Placido, Chief
Executive Officer of RBC Dexia Investor Services, a top 10 global custodian.
"By bringing all our employees in Toronto together in one facility, we can
accommodate our current and future growth needs, improve our efficiencies and
better serve our clients."
RBC Centre will have one of the most prestigious addresses in Canada.
Connected to the 53-storey Ritz-Carlton Hotel and Residences Toronto (which
Cadillac Fairview jointly owns), it will be a gateway for major business in
the downtown core. Just steps away from multiple eateries and shops, the
building will also be fully accessible via Toronto's PATH system.
"RBC Centre provides us an opportunity to address our premises needs in a
cost efficient manner while providing a leading edge design and quality
environment for our employees" said Chitwant Kohli, Vice-President, Corporate
Real Estate, RBC Financial Group.
RBC Centre will be a leading example of the latest building technology
and environmental design in Canada by achieving a LEED Silver status. LEED
(Leadership in Energy and Environmental Design) Green Building Rating
System(R) is a voluntary standard for developing high-performance, sustainable
buildings. The tower's operational infrastructure will also incorporate deep
lake water cooling and steam heating in order to maximize efficiencies and
minimize operating costs. "This is a state-of-the-art facility, unlike any
other structure in downtown Toronto," noted Sullivan.
The strong Canadian economy has led to increased demand for office space,
particularly large blocks in downtown Class A buildings. Recent market surveys
show that the downtown Toronto office market has been improving steadily for
the last few years, with overall vacancy levels currently around 8 percent,
and trending lower. Furthermore, absorption of space in the financial core has
been increasing. These conditions have created a favourable climate for
Cadillac Fairview to proceed with a new office tower.
Construction on RBC Centre is scheduled to begin in July 2006 and slated
for completion in 2009.