The recently completed $102-million deal for Toronto Don Valley Hotel & Suites heralds the development momentum building along the Eglinton Crosstown light rail transit (LRT) line, now under construction across a 19-kilometre east-west stretch of the city. With the purchase, joint partners Freed Developments and Fengate Asset Management acquired an existing 354-room hotel on a 5.4-acre site with zoning in place to allow high-rise residential infill.
“The potential exists to create a landmark development,” asserts a release from CBRE’s Hotels and Land Services Groups, the brokers acting for the vendor, Allied Hotel Properties. “Acquiring a site with approved rezoning of this scale and location is both rare and exciting.”
Freed Developments currently has seven residential projects in progress in Toronto, including four in close proximity to Eglinton Avenue. Fengate is managing the joint acquisition on behalf of the LiUNA Central and Eastern Canada Pension Fund.
Some amenities to support envisioned transit-oriented mixed-use development are already in place as investors look to the scheduled September 2021 completion of the LRT. In addition to a direct connection to the future Wynford station, nearby facilities include the Aga Khan Museum, Ismaili Centre, CF Shops at Don Mills and the Ontario Science Centre.
Other analysts group the Don Valley Hotel site in a larger trend, indicating developers’ burgeoning interest in exposure to the Eglinton Crosstown line. Its 25 stations are largely located at the junction of major north-south arterial roads, along with some moderately trafficked but locally significant routes, and will collectively intersect with three Toronto Transit subway stations, 54 bus routes and four GO train lines, including the Union-Pearson Express. A 10-kilometre section takes commuters underground, while the remaining above-ground section enjoys a dedicated right-of-way separate from street traffic.
A new report from Avison Young tallies projects set to redevelop or intensify development on 11 sites encompassing more than 182 acres, sprinkled from the midtown Yonge-Eglinton node to the commercial strip known as the Golden Mile near the LRT’s eastern terminus in Scarborough.
“As developers search for economical building sites across the city, less expensive land parcels outside the core — where higher densities and land-use potential combine with rapid transit — represent an ideal scenario for future growth,” it observes. “Many such locations are concentrated along the eastern half of the Crosstown line, where large sites are ripe for redevelopment.”
The largest of those is a 60.5-acre former corporate office campus at Eglinton Avenue and Don Mills Road where the developer, Aspen Ridge Homes, has begun marketing the first of what’s expected to be 16 residential towers. Dubbed One Crosstown Condos, it’s the initial piece of an envisioned mix of uses that also promises 13 blocks of townhouses, 700,000 square feet of office and retail space, a 100,000-square-foot community centre and approximately five acres of green space.
The newly forged neighbourhood will connect to the LRT at Science Centre station, two stops west of the Don Valley Hotel site’s access. Two more stops to the west, Avison Young analysts foresee development activity around the line’s intersection with Laird Road, following the City of Toronto’s recent approval of an Official Plan Amendment that sets out parameters for intensification and growth. And planners continue to be busy in the area.
“Official plan amendments are underway on several sites to establish the framework for new master-planned communities — a sure sign the route will lead to an increase in density in the years ahead,” the report maintains. “Crosstown will also extend the midtown hub of Yonge and Eglinton further east and west, potentially creating a major corridor similar to Bloor Street.”
The market research and investment guidance consultancy, Real Estate Intelligence Network (REIN), flags 10 “neighbourhoods to watch” along the LRT’s path, evenly split to the east and west of Yonge Street. “Generally, all major transportation infrastructure influences property values,” REIN researchers underscore in the 2019 edition of their Toronto Transportation Effect Report.
Drawing on the most current academic insight, economic theory and data related to real estate values, the report concludes that proximity to LRT stations can be a key market influencer in boosting values and investment returns. That’s distilled into the so-called “transportation effect” hypothesis that finds office space within 500 metres of a transit station enjoys 34 per cent lower vacancy and can command 28 per cent higher rent than more distant competition. Multifamily properties within 1,600 metres of a station are deemed 27 to 99 per cent more valuable than outlying apartment buildings, with those in the 400-metre range at the high end of that scale.
“Simply put, a market influencer is a positive or negative change to market conditions that lies outside the economic fundamentals. They are typically more qualitative. These can include changes in a tax regime or to zoning or transportation,” the REIN report advises. “This works in reverse too. The removal of critical transportation can negatively impact (market conditions). You want to watch what is being built and what is being removed, should that be the case.”