Take a stroll along the spine of Toronto and it becomes abundantly clear that the city is in the middle of a dramatic transformation. Urban-minded residents who want to live close to where they work and play are reshaping the Downtown Yonge corridor. One of Canada's most famous streets is now a breeding ground for skyscrapers that test the city's prevailing wisdom around height and density. The busy corner of Yonge and Wellesley is one of the city's most dense, and with the population in the immediate area expected to double in the next decade, the evolution of the urban fabric will escalate.
Some needed stability in a sea of change, a stratified freehold retail asset at the base of a ten-storey condominium tower adjacent to Wellesley Station features a total of 240 feet of wraparound commercial frontage. Anchoring the northeast corner of Yonge and Wellesley, the six fully tenanted retail units at 563 Yonge Street offer a combined 8,330 square feet of space, currently occupied by Starbucks, The Halal Guys, Hoke Poke, Rothmans Benson & Hedges (IQOS), Talent Employment Inc. and Funnel Cake Express.
With a Weighted Average Lease Term (WALT) of approximately 5.3 years, the property features strong in-place income. The established and high-profile property also benefits from an average rental rate 30 to 40 percent below market rental rates, allowing for significant income growth potential in the future as a wave of new mixed-use projects come online.
A number of residential highrises approaching completion in the vicinity are set to give a further boost to local foot traffic, increasing the value of retail on the iconic street. The 60-storey Wellesley on the Park, two-tower TeaHouse, 44-storey Clover on Yonge, and The Britt—a 41-storey residential conversion of the former Sutton Place Hotel—are some of the biggest projects in the delivery pipeline. Future projects a stone's throw from 563 Yonge include the 64-storey 10 Wellesley West, and just a few blocks south, one of Canada's tallest buildings will rise at 383 Yonge.
Exploding growth in rental rates coupled with new development replacing long-standing commercial buildings on the bustling Downtown Yonge corridor makes the retail asset at 563 Yonge an increasingly rare opportunity to acquire a prime subway-adjacent corner property.
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