Ivanhoé Cambridge has teamed up with longtime partner and real estate investment manager Hines to buy part of the land where the duo plans to build a 2.9 million square foot office campus in Toronto, the groups said Wednesday.
The partners purchased the land, located at 141 Bay Street, in Toronto’s central business district from Metrolinx, Ontario’s transportation agency. Ivanhoé Cambridge originally purchased the adjacent land parcel for the project, located at 81 Bay Street, in 2007. Houston-based Hines joined the project as its development manager in 2013 and became an equal joint venture equity partner this year.
Spokesmen for Ivanhoé Cambridge and Hines declined to disclose the land purchase cost or the anticipated price tag for the entire development.
The project, called Bay Park Centre, will encompass two 49-story office towers connected by a one-acre elevated park, according to Wednesday’s statement. Amenities will include fitness and bicycle parking facilities, restaurants and interior parking. Bay Park Centre will also include a new bus terminal currently located at 141 Bay Street that will be relocated to 81 Bay Street.
Jonathan Pearce, Ivanhoé Cambridge’s Toronto senior vice president of office leasing, said the build-to-core development represented a milestone for the Canadian investor. In a tight market with Class A office vacancies below 5 percent, he said the project would deliver scale to the central business district, which has not seen substantial new construction in 25 years. Pearce said Ivanhoé Cambridge does not have any comparable ground-up development projects currently elsewhere in Canada.
“This is by far and away our most substantial investment in Toronto. It’s a market we’ve been trying to do something in for a number of years,” he told PERE. “We wanted to build a signature asset and leave an impression on the Toronto skyline.”
Construction on the project will begin this spring, with one tower projected to be completed in 2020 and the other in 2023.
Canadian bank CIBC will be Bay Park Centre’s anchor tenant, leasing 1.8 million square feet of office space for what will be the company’s new headquarters. CIBC also has naming rights to the development.
Hines and Ivanhoé Cambridge have worked on projects in the US, Canada and Europe, according to previous statements.
Ivanhoé Cambridge is the real estate arm of Canadian pension plan Caisse de dépôt et placement du Québec. It managed about C$56 billion ($42 billion; €39.8 billion) in real estate as of December 31, according to Wednesday’s statement.
Hines has $96.5 billion in assets under management.