Analysis: Expanded Retail at 'The One' Could be Valued at $1.2 Billion

  Rendering: Mizrahi Developments

Rendering: Mizrahi Developments

According to a recent TD Securities Equity Research report, the retail component of Toronto's One Bloor Street West could become valued at over $700 million. If developer Mizrahi Developments is successful in securing adjacent retail space, the project's retail podium could become worth considerably more. If Mizrahi is successful, the combined nine-level retail space could become some of Canada's most valuable commercial real estate. 

One Bloor Street West, also known as 'The One', will include nine levels of retail with 72 levels of residential above. Located at the southwest corner of Yonge Street and Bloor Street West, The One will feature five large retailers at its base, including an unnamed 30,000 square foot corner anchor. Each retail level will boast 22 foot ceilings and no columns, given the building's exoskeleton construction. 

  Source: TD Securities

Source: TD Securities

According to TD Securities, The One is expected to have about 168,000 square feet of retail, with an average floorplate of about 21,000 square feet. This represents 19% of the tower's total projected square footage of just under 880,000 square feet. 

  Source: TD Securities

Source: TD Securities

Despite being less than 20% of the project's size, TD estimates The One's retail space to be considerably more valuable than the proposed residential above. The chart above estimates The One's retail podium to be valued at $721.9 million. Remarkably, its ground floor is assessed at a whopping $236.3 million, given an estimated net rent of $450 per square foot. We should note that these numbers are estimates and furthermore, TD's study fails to identify The One's concourse level, which will also feature retail space connected to Toronto's PATH system. 

TD Securities values The One's 72-floor residential component, as a comparison, at $539.1 million. The tower will feature roughly 500 residential units, depending on demand and customization, featuring columnless interiors and 10 foot clear ceilings without bulkheads. Prices, according to Mr. Mizrahi, will average $1,000 per square foot, with a penthouse measuring up to 15,300 square feet costing in excess of $30 million. We would guess such a large penthouse would sell for closer to $40-45 million, given prices per square foot for penthouses in similar buildings. 

  Source: TD Securities

Source: TD Securities

TD Securities estimates The One's site area to be 27,640 square feet. This includes the former Stollerys building as well as retail space south to 768 Yonge Street, as well as neighbouring 11 Bloor Street West to the west.

Mr. Mizrahi recently indicated to us that he's open to expanding The One's retail component westward all the way to Balmuto Street, annexing land currently housing an H&M store and neighbouring Scotiabank

  Map via City of Toronto

Map via City of Toronto

  If The One expands all the way to the corner space occupied by Scotiabank in this rendering, it would add significant value to the proposed project. Rendering: Mizrahi Developments

If The One expands all the way to the corner space occupied by Scotiabank in this rendering, it would add significant value to the proposed project. Rendering: Mizrahi Developments

H&M is located at 15 Bloor Street West, and Scotiabank occupies 19 Bloor Street West. Their combined site area is approximately 14,000 square feet. Excluding concourse retail space, as done in the TD Securities analysis, the new retail space would span just over 110,000 square feet. Using the same valuation per square foot ($4,297) as the retail podium calculations above, this 110,000 square foot addition could be worth approximately $472.7 million.

Adding the 110,000 square foot $472.7 million addition to the proposed 168,000 square foot $721.9 million retail podium, the combined 278,000 square foot retail space could see a value of almost $1.2 billion. 

Retail News From Around The Web: April 30, 2015