A 145,034-square-foot class-A office building on a 2.34-acre Toronto site with future development potential has changed hands for $28.1 million in a deal brokered by Avison Young.
The vendor and buyer involved in the 180 Duncan Mill Rd. transaction were two unnamed private investors, Avison Young broker and principal Matt Gunning told RENX.
“They’ve been in sell mode over the last number of years, but the market conditions were challenging so they’ve been holding off,” Gunning said of the vendor. “But ultimately they decided they didn’t necessarily see market conditions improving in the near term so they decided to sell into a bit of a depressed market.”
The property was on the market for seven months and sold for about $195 a square foot, which Gunning said represents a “pretty average price” for Toronto office buildings outside of downtown these days.
“I would say interest was minimal,” Gunning said. “The only buyers in the market are users and foreign capital types of groups.
“In the fall there was quite a bit of interest across the market from school uses. But now with government changes to immigration policies and student visa policies, foreign student programs have more or less shut down, so that really hurt demand in the market from those types of groups.”
What 180 Duncan Mill Rd. offers
The Duncan Mill Road property is situated close to both Highway 401 and the Don Valley Parkway. A shuttle bus provides transportation to and from the nearby Leslie and York Mills subway stations and the Oriole GO Transit station.
A number of malls, restaurants and other amenities are near the site, which is bordered by the 401 to the north, Don Mills Road to the east, York Mills Road to the south and Leslie Street to the west.
The seven-storey building opened in 1975 and underwent an extensive modernization program overseen by Sweeny&Co Architects in 2001 that incorporated state-of-the–art designs and systems.
“The building was a bit of a testing ground for office building technologies that have become very effective and become a big part of the landscape in Toronto office developments over the last 20 years,” Gunning said.
It’s described as one of the most energy-efficient and health-focused office buildings in Toronto, with features that include: floor-to-ceiling glass with operable windows; indirect non-glare lighting fixtures; a raised-floor heating, ventilation and air-conditioning system that provides individual control to each occupant; and other leading-edge technologies.
The building also offers: a cafe; highly efficient space utilization; a plug-and-play floor for all voice, data and power uses; touchless motion sensors; antimicrobial copper film on all high-touch surfaces; and a patio that provides scenic ravine views.
Building occupancy
The building was 71 per cent occupied by national and international tenants upon the closing of its sale. While tenants have a weighted average lease term of 3.9 years, Gunning said the terms vary widely among tenants.
The fifth and sixth floors are empty and Gunning said another floor will also become vacant later this year.
“The buyer is using some of the space for themselves because they have some operating businesses and have a need for office space, but probably 5,000 to 10,000 square feet is going to be what they’ll end up using,” Gunning explained.
The building is the Canadian headquarters for Cyderes, a cybersecurity firm rebranded in 2022 after the merger of Herjavec Group and Fishtech Group.
Other tenants include: Girl Guides of Canada; Gatestone, a customer contact and business process outsourcing company; and professional development program provider Stitt Feld Handy Group.
Future intensification potential
The property has 147 underground parking stalls and 164 surface parking stalls.
“There’s a surface parking lot that could and should, some day, be a structure,” Gunning said. “There’s nothing planned or imminent, given the market conditions, but over time that is certainly an opportunity.”
The site is zoned for employment uses, according to Gunning.