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CBRE Vice President Brendan Sullivan
faced his share of challenges as he worked with Menkes Developments to help Richardson Wealth secure a new home in the midst of a global pandemic.
But the deal he, Myah Ollek, Brian Porter and Byron Ahmet were ultimately able to facilitate ended up being a big win for all concerned. Richardson Wealth will occupy three floors, or 85,000 sq. ft., of prime office space at Menkes’ latest development, 100 Queens Quay East, a 25-storey building currently under construction on the Toronto waterfront.
The tower is the first phase of Sugar Wharf, Menkes’ new mixed-use community, which will include office, retail and residential space, as well as Toronto’s first vertically integrated school and a two-acre public park. It will be the largest mixed-use development on the waterfront, home to 7,500 residents and 4,000 office workers.
The Richardson Wealth transaction, the first significant office lease in downtown Toronto during the pandemic, represents a resounding vote of confidence in the city’s office market that’s had a knock-on effect. “It shows that new leasing is taking place out there,” says Sullivan, noting that he fielded quite a few calls after news of the Richardson Wealth deal came out. “It’s signalled to other businesses that companies are now clearly considering their real estate strategies.”
A COVID deal
While Richardson Wealth expressed interest in relocating to new digs prior to the lockdown in March, Sullivan says the 100 Queens Quay East transaction was initiated and executed entirely in the midst of the pandemic. (CBRE represented Menkes and TD Asset Management as the listing agent for the building; Devencore represented Richardson Wealth.)
There were some hurdles en route to putting a deal together, particularly as it was happening against the backdrop of an unprecedented global health crisis. “But both parties had significant motivation to partner on this,” says Sullivan, noting that the goal of the process was to create a transformational change. “And that’s what drove both sides during the pandemic.”
Having that kind of strategic clarity enabled the companies to stay focused on the long-term value this real estate play would provide, not on the short-term issues roiling the office market. “The real challenge was not letting the noise out there affect that objective,” says Sullivan.
The right development
It helps that 100 Queens Quay East is the right development for these times.
Designed by B+H Architects, the office tower will have 690,000 sq. ft. of Class AAA space and boast the highest standards in environmental sustainability. The project will pursue LEED Platinum certification, an internationally accepted rating system that recognizes excellence in the design, construction and operation of green buildings.
Peter Menkes, president of Menkes’ commercial and industrial division, noted that his company’s newest office development “will support the transition of returning to physical office space by promoting a healthy work environment.”
Richardson Wealth is expected to move into its new space in 2023. President and CEO Andrew Marsh said that his firm was encouraged by the fact that the building will support collaboration, connection, communication and idea exchange. And by opting for a tower that is state of the art and designed to be adaptable, “we will also be better able to take full advantage of the inevitable changes in workplace dynamics stemming from the pandemic.”
With this in mind, Sullivan highlights the locational attributes of 100 Queens Quay East: it is immediately accessible to the downtown core but with the benefit of all the outdoor space that the area provides. There’s the 2.5-acre park that’s part of the project, and across the street is Sugar Beach, the city’s busiest beach. “That as a single amenity set is not available in 99% of the product,” he says. “The connection that space has to nature is very important to tenants.”
In inking the deal at 100 Queens Quay East during challenging times, Richardson Wealth has telegraphed confidence to the market. “And that seems to be rubbing off on other organizations,” Sullivan says.
Toronto, like most other Canadian cities, saw increases in office vacancies and sublet space in the third quarter, an abrupt change in momentum after a historic run for office demand that left Canada’s largest city tied with Vancouver for the lowest office vacancy in North America prior to the pandemic.
It’s not all doom and gloom out there, though, and office space transactions are taking place. But never before has the track record and reputation of a developer been more important.
“It’s the developers that have experienced the ups and downs in the market that have an advantage right now. And Menkes has been a premier developer in Toronto for 70 years," Sullivan says. "They've been through cycles and weathered storms before, and that’s critical.”