Leader Lane Developments’ latest project — a mid-rise purpose-built rental building in Etobicoke — is proof that a difficult building environment can, indeed, be surmounted with a shrewd business plan.
It recently closed on 1156 The Queensway — a limited partnership between vendor, Ranchin Automotive, and builder ELM Developments — in large part because the property is subject to Toronto’s as-of-right zoning bylaw.
“Our corporate strategy for pursuing development projects in our mid-rise program is to pursue developments sites, and development proposals, that do not require rezoning,” Don Manlapaz, founding partner of Leader Lane Developments, told RENX.
‘Our proposed nine-storey building is as-of-right, so we don’t require rezoning. We’re facilitating our approvals through a site-plan approval and a minor variance.”
That’s part of what Manlapaz called “time compression,” adding, “we initiated our site-plan approvals many months before closing on the property.”
Rental apartments to replace Merceds Benz dealership
Leader Lane is gearing up to submit its final site-plan application for the development, which will replace a sprawling Mercedes Benz dealership at 1156 Queensway, near the Gardiner Expressway and Highway 427 interchange.
The current plan would see 213 rental units in a nine-storey mid-rise, and an additional five stacked townhouses — although the developer would like to see the former increased to between 215 and 220 suites.
Moreover, the south side of The Queensway is already a residential node of repute, Manlapaz said. The Remington Group delivered nearly 1,000 units in three towers across the street nearly a decade ago. Baz Group of Companies (through its subsidiary Marlin Spring) is also across the street with Joya Condos, as is RioCan Living’s Verge Condos.
Manlapaz said the presence and success of such heavy-hitters also attenuates risk, but unlike the aforementioned developers, Leader Lane is bringing something new to the table.
“Within that node is a number of existing high-rise developments, and proposed high-rise developments — mostly condos — but we’re going to be the only purpose-built rental building within that node, and we’re in mid-rise form,” he said.
TTC subway, GO stations nearby
There is a pronounced dearth of modern rental apartments in the Greater Toronto Area, and while there have been a few launches in recent years, most of them are concentrated closer to Toronto’s core.
But as Canada’s largest city becomes increasingly expensive and congested, Manlapaz pointed to 1156 The Queensway fulfilling a need in the market.
The property will also benefit from the TTC’s Kipling and Islington subway stations, as well as the Mimico Go Train line.
“Part of our whole strategy of being city builders is creating residences for young people shifting their preference outside of the downtown,” he added. “These would be young professionals who have been saving money for a number of years for the million-dollar condo that no longer exists. They’re well-established and want to maintain their sophisticated urban lifestyle in a somewhat suburban environment.”
The acquisition
Mercedes Benz sold its seven-store portfolio to Zanchin Automotive, a major player in the auto sector that celebrated its semi-centennial last year, and the AWIN Group of Dealerships.
But being a portfolio sale, 1156 The Queensway was a packaged deal. The automotive partnership, determining the existing dealership superfluous in light of a newer facility down the road, began looking for buyers in an off-market offering.
The vendor approached Frank Tullio, a sales rep at Spear Realty with whom he had a relationship, and asked for advice.
This is where Leader Lane’s business strategy required patience. According to Tullio, the deal took about a year to close, although it might not have taken so long if not for today’s uncertain economic realities.
“What you’re looking for is land value. People are looking for between $60 and $80 per buildable square foot,” Tullio said. “A year before we started the deal, $100 per buildable square foot was considered a good deal.”
Although neither Leader Lane nor Tullio would disclose the sale price — or what the buildable square footage worked out to — Tullio noted another inauspicious economic reality.
And this one particularly affects high-rise developers.
Leader Lane’s move to multifamily rentals
“In a high-interest market, condos aren’t that easy to sell, but if you can build a product and tap into the lease market, that makes sense, especially on The Queensway with street activity, transit and highway access,” he said.
Leader Lane Developments’ executives have experience in raising capital and urban planning — including at institutions like Forgestone Capital, Dream Unlimited Corp., and First Gulf Corporation, to name a few — and it appears the company sees multifamily residential as a sector that will continue to burgeon, rather than serve as a stopple during buying slumps.
“We’re interested in creating an institutional-level and quality development portfolio of multi-res apartment buildings,” Manlapaz said. “It was last summer where we actually pivoted on a number of our previous condo projects to purpose-built rentals.”
One such project is a co-development with Windmill Developments in nearby Mimico called Hälsa.
The developer also still has two condo projects on the go: Bloor Jane, a mid-rise in Bloor West Village, and 1400 Victoria Park, the latter of which will bring nearly 1,000 units to North York.
