July 17, 2025 • 7 mins
In this episode, Sandy MacKay introduces Crombie REIT and discusses the shift in the multifamily market. The conversation explores Crombie's transformation of its multifamily portfolio and wealth creation opportunities in the sector. Sandy examines the trend of retail landlords moving into multifamily real estate and highlights current market trends and investor opportunities. The resilience of the multifamily sector and the potential for office-to-residential conversions are discussed, featuring KRP Properties' project. The importance of sustainable construction and adherence to LEED standards in multifamily developments is emphasized. Sandy wraps up with closing remarks and a teaser for the next episode.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Did you know that Crombie Real EstateInvestment Trust, traditionally known for its
(00:03):
retail-focused portfolio, is now eyeing a forayinto the multifamily market?
Welcome to the Multifamily Real Estate InsightsPodcast.
I'm your host, Sandy MacKay.
Let's get right to it.
Crombie Real Estate Investment Trust, commonlyrecognized for its substantial retail-focused
assets, is making a strategic shift towardsmultifamily developments.
(00:29):
According to a recent article from renx.ca,Crombie's president and chief executive
officer, Don Clow, shared insights at a CIBCreal estate conference about the company's
plans to diversify its portfolio by leveragingexisting properties and their air rights for
mixed-use and multifamily projects.
Crombie's portfolio, which currently consistsof 280 commercial properties anchored by
(00:53):
grocery and drugstore chains, is valued atapproximately $4.8 billion.
Despite its strong retail foundation, Crombiesees significant potential in transforming some
of these assets into multifamily residentialunits.
They aim to develop up to 6,500 units, equatingto a $3 billion opportunity, primarily through
(01:15):
properties acquired, including the Safewayportfolio.
The focus is not just on short-term gains butlong-term wealth creation.
Crombie plans to build a purpose-built rentalapartment portfolio, prioritizing rental income
over selling condominiums.
An example of this strategy is a project onDavie Street in Vancouver, expected to yield
(01:37):
six percent returns, with the anticipation ofthree percent annual rent growth in the market.
Crombie's initial development efforts willconcentrate on 19 sites across Canada, with a
significant presence in Vancouver, alongsideCalgary, Toronto, and Halifax.
They are also exploring opportunities beyondtheir current pipeline, targeting other grocery
(01:59):
store-anchored sites for potential acquisitionand redevelopment.
This strategic shift by Crombie Real EstateInvestment Trust highlights a growing trend
among retail-focused landlords to diversifyinto the multifamily sector, aiming to unlock
the value of their existing real estate assets.
With long-term wealth creation in mind, Crombieis poised to make a significant impact in the
(02:22):
multifamily market.
Recent data from the Canadian Real EstateAssociation is signaling a potential shift in
the real estate market that's reminiscent ofthe 1990s crash.
According to Stephen Punwasi's article, thesales-to-new listings ratio, or SNLR, for June
fell to 49.3%.
(02:42):
This marks the weakest demand balance for themonth since 1995.
The SNLR is a key metric for gauging marketconditions, and its current level suggests
we're in a balanced market.
However, the rapid decline from previous highsis raising eyebrows.
The SNLR's decline was driven by an 8% increasein new listings, outpacing the 3.5% rise in
(03:07):
sales.
This has led to the fourth consecutive Junewhere the SNLR has dropped, resulting in a
significant 23.8-point decline from peak totrough.
Historically, such a rapid shift hasn't beenseen since the late 80s, when the market was on
the brink of a major downturn.
So, what does this mean for the multifamilysector?
(03:30):
Well, while the overall market shows signs ofcooling, this could be an opportunity for
multifamily investors to capitalize on thechanging dynamics.
With more listings coming onto the market,there may be opportunities for acquiring
properties at more reasonable prices,especially in regions like Hamilton,
Kitchener-Waterloo, and Oakville.
(03:52):
It's important to note that while the SNLRindicates a balanced market, the direction of
the change is crucial.
A balanced market today might still experienceprice fluctuations if demand shifts suddenly.
For investors, this means staying informed andready to adapt to these market changes.
As we look at the current landscape, it's clearthat the multifamily sector remains a resilient
(04:16):
option for those looking to build long-termwealth.
The fundamentals of supply and demand willcontinue to play a crucial role, and savvy
investors will find ways to leverage theseshifts to their advantage.
By focusing on areas with strong economicgrowth and population increases, the
multifamily market can still offer promisingreturns.
(04:38):
Moving on to another exciting development inthe multifamily real estate landscape, KRP
Properties is making waves in Canada's largesttech park by converting a 10-storey office
tower into residential apartments.
This project is located in the Kanata Northbusiness park, a hub for research and
development, making this transformation afascinating case of adaptive reuse.
(05:01):
According to Don Wilcox from RENX, the formeroffice building at 535 Legget Drive is being
transformed into approximately 115 apartments.
KRP Properties, owned by Ottawa techentrepreneur Terry Matthews and his holding
company Wesley Clover International, is behindthis ambitious project.
(05:23):
The building, originally constructed around theyear 2000, features a glass-metal curtain wall
construction, making it a prime candidate forresidential conversion.
What's particularly interesting about thisconversion is its location in the heart of a
tech hub.
Kanata North is home to over 200 tenants,including major players like Erickson and
(05:45):
Nokia, employing around 12,000 people.
This creates a significant potential residentbase for the new apartments, especially with
many tech workers seeking housing close totheir workplace.
The development team, including NEUF architectsfrom Montreal and RECL Contracting of Ottawa,
(06:06):
is working hard to ensure the project meets thedemands of this tech-savvy community.
The apartments will offer high-end amenities,leveraging the proximity to the adjacent
Brookstreet Hotel, known for its popularityamong business executives and visitors to the
area.
KRP's approach also includes sustainableconstruction practices, aiming to meet the
(06:27):
equivalent of LEED gold or platinum standards.
They're focusing on reusing materials andimplementing advanced HVAC systems to enhance
energy efficiency.
This commitment to sustainability is becomingan essential factor in modern real estate
development, appealing toenvironmentally-conscious tenants.
As the only apartment complex in the immediatearea, KRP's project is poised to set a new
(06:51):
standard for residential living in KanataNorth.
There are also plans for further development inthe area, with Main + Main and Nokia eyeing
additional residential projects.
This evolution of the tech park into amixed-use community could significantly enhance
the local living and working environment.
This office-to-apartment conversion by KRPProperties is a testament to the adaptability
(07:15):
and forward-thinking approach required intoday's real estate market.
By repurposing existing structures and aligningwith the needs of the tech workforce, KRP is
not just creating housing but fostering avibrant community where innovation and living
intersect.
Thank you for listening to the Multifamily RealEstate Insights Podcast.
(07:37):
I'm your host, Sandy MacKay.
See you on the next one.
Did you know that Crombie Real EstateInvestment Trust, traditionally known for its
(00:03):
retail-focused portfolio, is now eyeing a forayinto the multifamily market?
Welcome to the Multifamily Real Estate InsightsPodcast.
I'm your host, Sandy MacKay.
Let's get right to it.
Crombie Real Estate Investment Trust, commonlyrecognized for its substantial retail-focused
assets, is making a strategic shift towardsmultifamily developments.
(00:29):
According to a recent article from renx.ca,Crombie's president and chief executive
officer, Don Clow, shared insights at a CIBCreal estate conference about the company's
plans to diversify its portfolio by leveragingexisting properties and their air rights for
mixed-use and multifamily projects.
Crombie's portfolio, which currently consistsof 280 commercial properties anchored by
(00:53):
grocery and drugstore chains, is valued atapproximately $4.8 billion.
Despite its strong retail foundation, Crombiesees significant potential in transforming some
of these assets into multifamily residentialunits.
They aim to develop up to 6,500 units, equatingto a $3 billion opportunity, primarily through
(01:15):
properties acquired, including the Safewayportfolio.
The focus is not just on short-term gains butlong-term wealth creation.
Crombie plans to build a purpose-built rentalapartment portfolio, prioritizing rental income
over selling condominiums.
An example of this strategy is a project onDavie Street in Vancouver, expected to yield
(01:37):
six percent returns, with the anticipation ofthree percent annual rent growth in the market.
Crombie's initial development efforts willconcentrate on 19 sites across Canada, with a
significant presence in Vancouver, alongsideCalgary, Toronto, and Halifax.
They are also exploring opportunities beyondtheir current pipeline, targeting other grocery
(01:59):
store-anchored sites for potential acquisitionand redevelopment.
This strategic shift by Crombie Real EstateInvestment Trust highlights a growing trend
among retail-focused landlords to diversifyinto the multifamily sector, aiming to unlock
the value of their existing real estate assets.
With long-term wealth creation in mind, Crombieis poised to make a significant impact in the
(02:22):
multifamily market.
Recent data from the Canadian Real EstateAssociation is signaling a potential shift in
the real estate market that's reminiscent ofthe 1990s crash.
According to Stephen Punwasi's article, thesales-to-new listings ratio, or SNLR, for June
fell to 49.3%.
(02:42):
This marks the weakest demand balance for themonth since 1995.
The SNLR is a key metric for gauging marketconditions, and its current level suggests
we're in a balanced market.
However, the rapid decline from previous highsis raising eyebrows.
The SNLR's decline was driven by an 8% increasein new listings, outpacing the 3.5% rise in
(03:07):
sales.
This has led to the fourth consecutive Junewhere the SNLR has dropped, resulting in a
significant 23.8-point decline from peak totrough.
Historically, such a rapid shift hasn't beenseen since the late 80s, when the market was on
the brink of a major downturn.
So, what does this mean for the multifamilysector?
(03:30):
Well, while the overall market shows signs ofcooling, this could be an opportunity for
multifamily investors to capitalize on thechanging dynamics.
With more listings coming onto the market,there may be opportunities for acquiring
properties at more reasonable prices,especially in regions like Hamilton,
Kitchener-Waterloo, and Oakville.
(03:52):
It's important to note that while the SNLRindicates a balanced market, the direction of
the change is crucial.
A balanced market today might still experienceprice fluctuations if demand shifts suddenly.
For investors, this means staying informed andready to adapt to these market changes.
As we look at the current landscape, it's clearthat the multifamily sector remains a resilient
(04:16):
option for those looking to build long-termwealth.
The fundamentals of supply and demand willcontinue to play a crucial role, and savvy
investors will find ways to leverage theseshifts to their advantage.
By focusing on areas with strong economicgrowth and population increases, the
multifamily market can still offer promisingreturns.
(04:38):
Moving on to another exciting development inthe multifamily real estate landscape, KRP
Properties is making waves in Canada's largesttech park by converting a 10-storey office
tower into residential apartments.
This project is located in the Kanata Northbusiness park, a hub for research and
development, making this transformation afascinating case of adaptive reuse.
(05:01):
According to Don Wilcox from RENX, the formeroffice building at 535 Legget Drive is being
transformed into approximately 115 apartments.
KRP Properties, owned by Ottawa techentrepreneur Terry Matthews and his holding
company Wesley Clover International, is behindthis ambitious project.
(05:23):
The building, originally constructed around theyear 2000, features a glass-metal curtain wall
construction, making it a prime candidate forresidential conversion.
What's particularly interesting about thisconversion is its location in the heart of a
tech hub.
Kanata North is home to over 200 tenants,including major players like Erickson and
(05:45):
Nokia, employing around 12,000 people.
This creates a significant potential residentbase for the new apartments, especially with
many tech workers seeking housing close totheir workplace.
The development team, including NEUF architectsfrom Montreal and RECL Contracting of Ottawa,
(06:06):
is working hard to ensure the project meets thedemands of this tech-savvy community.
The apartments will offer high-end amenities,leveraging the proximity to the adjacent
Brookstreet Hotel, known for its popularityamong business executives and visitors to the
area.
KRP's approach also includes sustainableconstruction practices, aiming to meet the
(06:27):
equivalent of LEED gold or platinum standards.
They're focusing on reusing materials andimplementing advanced HVAC systems to enhance
energy efficiency.
This commitment to sustainability is becomingan essential factor in modern real estate
development, appealing toenvironmentally-conscious tenants.
As the only apartment complex in the immediatearea, KRP's project is poised to set a new
(06:51):
standard for residential living in KanataNorth.
There are also plans for further development inthe area, with Main + Main and Nokia eyeing
additional residential projects.
This evolution of the tech park into amixed-use community could significantly enhance
the local living and working environment.
This office-to-apartment conversion by KRPProperties is a testament to the adaptability
(07:15):
and forward-thinking approach required intoday's real estate market.
By repurposing existing structures and aligningwith the needs of the tech workforce, KRP is
not just creating housing but fostering avibrant community where innovation and living
intersect.
Thank you for listening to the Multifamily RealEstate Insights Podcast.
(07:37):
I'm your host, Sandy MacKay.
See you on the next one.
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
The Breakfast Club
The World's Most Dangerous Morning Show, The Breakfast Club, With DJ Envy, Jess Hilarious, And Charlamagne Tha God!