Corus cements home base with land deal
Corus Entertainment Inc. will remain a tenant in its state-of-the-art offices on Toronto’s waterfront until all of the ultra-modern fixtures look quaint and dated, after it engineered a deal that saw it buy the building and then flip it to one of Canada’s biggest REITs.
The Corus Quay building was built by Toronto Port Lands in 2009, and is a central piece of the city’s waterfront redevelopment strategy. The city-owned agency opted to list the property for sale late last year, and Corus had first right of refusal.
The building drew considerable interest over the past two months, Port Lands spokesperson Eva Varangu said, with several bidders hoping to own the environmentally friendly building.
But Corus used its contract to push the bidders aside and then immediately sold the building to H&R Real Estate Investment Trust(HR.UN-T24.380.090.37%)for $186-million, which is what it paid to buy the building from Toronto Port Lands. The deal was announced Monday.
It’s more than a home to the broadcaster, it’s an operations centre. The broadcast station must transmit 24/7, so there’s a two-megawatt backup power generator on the roof that sucks up 600 litres of fuel per hour when operational.
It also features radio studios, allowing street-level interaction for stations such as The Edge 102.1.
The main digital library can store two million gigabytes of data (the rough equivalent of 500,000 iTunes movie downloads). Everything is digital – the computer system alone takes up 8,000 square feet.
As part of the deal, Corus negotiated a new lease that will extend its original 20-year agreement and provide it with an option to renew for another 20 years.
Terms of the lease were not released.
However, when Corus signed a lease with Toronto Port Lands in 2009, the broadcaster signed for half the going rate for the Toronto market because the builder was keen to sign a large lead tenant to the project. H&R said it negotiated for some “rental escalations” as part of the deal.
The building is among the most advanced in Canada, and is home to most of the television and radio broadcaster’s 1,100 Toronto-based employees. It features a five-storey wall of plants in the lobby, “green” rooftops and a lighting system that knows when someone is at their desk and how much light is appropriate given the amount of sunshine coming in through the tinted windows.
It also has a three-storey slide from the lunchroom to the main floor.
At $186-million, Toronto Port Lands turned a tidy 24 per cent profit on the sale. The building was constructed for $150-million.