We Charity sold off its properties for $364 million. Will it work out?

On Friday, WE Charity announced that the Toronto real estate firm Onex Corp would acquire WE’s portfolio of 23 properties, plus the non-core Bridle Path office park in North York for $36 million. A $35 million drop from the appraisal price in 2015, that’s still good for a gain of about 16%. The rundown office buildings have been sold for a collective $292 million.

Nearly all of that goes to Onex, with WR Investment Corp grabbing about $12 million of the portfolio for about 7.5% of the business. Marc Levinson, who founded WE Charity with fellow Canadian entrepreneur Andrew Judah, will receive $15 million to play with, while $2 million goes to three entrepreneurial consortia that helped to finance the deals.

Onex’s deal shows the power and reach of the REIT/corporate behemoth to buy properties in Canada’s main office market. The Bridle Path office park, down a private lane in a ritzy part of North York, is a big gain on the $33 million Onex paid for seven office buildings and seven parking lots in 2004. The office buildings sold by WE date back to the 1980s.

Since WE Charity first acquired the Bridle Path portfolio, the mix of office and retail space in the strip has changed, with more retail shops and fewer offices. The companies that bought the properties say the aging buildings are in need of some modest cosmetic upgrades, according to a News Release from The Clydsdale Company, Hudson’s Bay Company, Inc., Lenz Investors Inc. and Woodward Investment.

“We are delighted to continue our partnership with Onex through this transaction, which will allow us to enter into an excellent transaction and continue to maximize the values of these buildings,” said Rabbi Levinson in the release. “Many of these buildings have strong anchored tenants who will benefit from the robust new retail base.”

There’s some discussion in the press release about the potential to “stimulate redevelopment in the area.” CREA, Canada’s leading commercial real estate association, said there’s “high demand for higher-end, Class A office space in core Toronto, particularly in ‘I’ office buildings,” which includes Bridle Path.

“This acquisition not only allows us to capitalize on that strong demand, but also positions us to work together with the new partners to determine how we might contribute to redevelopment of the Bridle Path site and its surrounding neighborhood,” said Briand Pelletier, real estate partner at Lenz Investors, in the release.

“This trade shows that here in Toronto and Vancouver, well-managed suburban office markets can support significant development and change in the transit oriented market. This is great news for Toronto’s economy and for the historic core residential neighborhoods that depend on office towers filled with well-paying jobs,” said Paul Henderson, CREA president and CEO.

The CBRE Capital Markets team led by Carl Liotto, Paul Howard and Wayne Bagnall represented WE in the sale. William Barton and Michele Burgess of CBRE’s Toronto office, Renee-Louise Bruchey and Jared Bergant with Barton/Burgess, and Max Levinson of The Clydsdale Company represented Onex.

Get the Monitor Stories you care about delivered to your inbox. By signing up, you agree to our Privacy Policy

The properties included in the deal in 2013 include the Stone Coast office complex; a strip of west-end streets that front Hwy. 401 and include offices for the Canadian Football League’s Toronto Argonauts; a portion of the ever-growing Commerce Park district; and the Bridle Path community, which includes Bridle Path Plaza, a retail complex that serves numerous office and commercial users.

This story originally appeared on GreenCarReports.

Leave a Comment