If you stand at the corner of Avenue Road and Eglinton Avenue and look east, the elevation of the intersection affords you a sweeping view of the Yonge and Eglinton area. The density of high-rises would make any mid-sized North American city envious of this skyline, yet it’s just one of a number of high-rise clusters to emerge in Toronto in the last decade.

The intensification of the Yonge and Eglinton neighbourhood has been one of the most transformative in Toronto, the result of numerous real estate transactions in the past several years. Certainly nothing happens in real estate without first going through the process of a transaction – an application for development or brokering the exchange of assets. 

Such was the case recently with the sale of 55 Brownlow Avenue just south of Eglinton between Yonge and Mount Pleasant by Royalwood Developments Limited to QuadReal and Menkes, in a sale brokered by CBRE. These types of transactions occur after much due diligence on the part of brokers such as CBRE to ensure all information is readily available and up to date for both the vendor and prospective purchaser. 

“We started our due diligence well in advance and then we launched via email campaign to our data base,” says Barbara Bardos, CBRE Vice President of Multi Residential Properties. “We conducted many site tours with prospects and called for offers five to six weeks after launch. Then we shortlist. We like to keep the process moving. It’s important to keep the momentum of the sale going as the markets change, and with interest rates changing so rapidly, that became a challenge.”

In the end, the Royalwood Apartments, a 15-storey building sitting on one-acre of prime land in midtown, sold for $56.18 million to QuadReal and Menkes. In transactions this large, it’s critical for brokers such as CBRE to do as much due diligence as possible to answer every question a purchaser may ask.

Looking south to the 55 Brownlow site, image courtesy of CBRE

“We ask the vendor to update their environmental testing and complete a building inspection report as well as prepare a new property survey, and have their lawyers check title for any encumbrances beforehand,” says Lauren White, CBRE Land Services Group Executive Vice-President. “We look at other sales in the area to understand the financials and prepare a valuation and inform the vendor so they have a realistic expectation.”

CBRE’s Land Services Group and Multi Residential Properties Group teamed together to create an extensive marketing document for prospective purchasers. The document contained a building and property description and overview including a statistical property summary, a Planning and Land Use Summary, nearby development applications, a market overview, listing of market amenities, a description of the offering process. The compiling of this information took approximately three weeks, standard for the hundreds of transactions the listing team handles annually.

Besides its prime location in midtown, the condition of the 58-year-old building was another asset which contributed to the sale according to CBRE.

Looking west to the Yonge-Eglinton area of Midtown Toronto with 55 Brownlow in the foreground, image courtesy of CBRE

“The property was very well maintained,” says Bardos. “The underground garage had been upgraded and overall the condition was meticulous as the owners had invested smartly in improving visible areas like the common areas. There is also a great suite mix with large units which are common in older buildings and the two-bedroom units have two bathrooms which is rare these days in newer developments.”

As for the future intensification of the site, CBRE observes that potentially the property is a development site. “We do not expect the building to come down soon as the buyer can improve the units,” says White. “Potentially this site could be partially redeveloped as there are applications in for redevelopment on both the north and south sides of the property.”

The sale of this property is another example of development following the growth, reach and range of public transit. With the Crosstown Line 5 nearing completion, Eglinton from Mount Pleasant to Yonge has seen a dramatic rise in development applications. Some proposals are as high as 35 storeys or more at the now low-rise intersection of Eglinton and Mount Pleasant, where there will be a Crosstown station just one block from 55 Brownlow Avenue.

“Development follows transit such as subway, LRT or GO lines,” observes Bardos. “Investment opportunities can sometimes become significantly more valuable in some cases if they are on a transit line or have development potential. If you’re within walking distance of those lines, apartment buildings become so much more valuable.”

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