Crown Realty Partners has acquired 5750 Explorer Drive, a 108,496-square-foot office property in Mississauga’s Airport Corporate Centre, in an off-market transaction brokered by CBRE.
Crown managing partner of acquisitions and leasing Scott Watson told RENX there was a confidentiality agreement that prevented him from revealing the vendor, which is a large institutional owner, or the purchase price.
“We’ve got a couple buildings in the Airport Corporate Centre that we own and we’ve also got a couple nearby that have been performing quite well lately,” Watson said. “So this fits in nicely with what we own and manage nearby.”
The building is certified LEED Silver and was built in 2007. It’s 78 per cent leased and occupied by 10 tenants, with the largest including Hershey Canada, Skygrid and BMO.
The building has four parking spots for every 1,000 square feet and features bicycle racks, showers and electric vehicle charging stations.
Building upgrades are planned
Crown plans to upgrade common areas and the main lobby to create a more inviting atmosphere for tenants and visitors. It will also build model suites in empty spaces in an attempt to accelerate leasing.
Energy-efficient retrofits, including the introduction of LED lighting, should assist in elevating the building’s appeal.
Watson said the building has been well-maintained, the property has nice landscaping, and its parking lot was recently redone.
JLL has been the property manager but Crown will be taking over that role. Triovest managed the property prior to JLL.
The location is accessible by public transit and is an eight-minute drive from Toronto Pearson International Airport. It offers high visibility and a significant building signage opportunity along Highway 401.
Mississauga has performed well for Crown
“We like the west end of the city and we’ve got over two million square feet now in Mississauga,” Watson said. “We’ve had really good leasing momentum and success for the past 12 to 18 months across the portfolio and, over the last six months, we’ve had some great things come together on vacant space.
“It seems like people are going back to work more often out that way than in other areas of the city so it fits nicely across our investment thesis.”
It is the second office acquisition for Crown in Mississauga during 2024. It acquired Sheridan Exchange, a two-building office complex, from Slate Office REIT for $25.6 million in February.
The 101,338-square-foot building at 2655 North Sheridan Way was 89 per cent leased while the 56,895-square foot building at 2695 North Sheridan Way was completely leased at the time of purchase. The complex was built in 1989 and sits on an 11-acre property.
Acquisition made on behalf of CR V LP
The investment in 5750 Explorer Drive was made on behalf of Crown’s fifth value-add fund, CR V LP, which was created in 2021 and had $260 million in capital commitments from institutional investors. Watson said the fund still has more than $100 million and continues to seek acquisition opportunities.
“We think that now is the right time to deploy on the back end, as we hopefully come out of this bottoming out of the market,” Watson said, adding that Crown isn’t looking to sell any office properties at the moment.
Crown, an integrated commercial real estate investment and management firm with a strong focus on value-add opportunities throughout Canada, has more than 10 million square feet of real assets under management in the Greater Toronto Area and Ottawa.
Ninety-five per cent of that is in office and Watson said the company remains committed to the asset class.
“The bid-ask spread, or the gap between what we can pay as value-add and what vendors want, isn’t quite there,” Watson noted. “But we’re finding it on certain deals.
“We’ll continue to look and I would say we’re pretty excited about the future of the office market. I think the question of if we’re going back to the office has been answered now.
“I think it’s how often and how it is tracked. It’s given a better baseline to investment metrics.”
While there’s more office leasing activity in the suburbs than in the downtown core, Watson said downtown is showing signs of life and property tours are picking up.
