Eglinton Square

Eglinton Square Shopping Center

Enclosed Shopping Center
Toronto, Ontario • Canada 

  • Purchased the property for $31 million (CDN) in 2002.

  • Sold it for 44 million CDN to a large Canadian pension fund in 2005.

  • Net profit: $13 million CDN in 3 years, or a gain of approximately 42%.

  • 186% Cash Return on Equity.

 

Eglinton Square Shopping Centre is a strategically located enclosed shopping center in the city of Toronto. The center is located near downtown and several arterial roadways.

The shopping center is one of the oldest in Toronto, having been built in 1954. Major tenants include: Shoppers Drug Mart, The Bay, and (shadow anchor) Metro Supermarket.

Key Issues

  • Purchased the property for $31 million (CDN) in 2002.
  • The property was a solid enclosed community shopping center situated in Toronto comprised of approximately 300,000 SF.
  • The property was situated in a strategic city node easily accessible from the city center.

Risks

  • No relationship with Metro gave uncertainty to an integral part of the center.
  • Unstable rental income.
  • Major tenant Shoppers Drug Mart occupied an atypical space and was expiring within 2 years.
  • Major retail developments in adjacent areas posed potential competition for customers.
  • Lack of additional major tenants. 

Property Maximization

  • Forged a relationship with Metro, assisting in enhancing their profits through additional revenue streams in exchange for information sharing and long-term commitment.
  • Stabilized rent, and minimized temporary tenants, by bringing in strong stores with long-term leases.
  • Added significant stores to improve the tenant mix, in categories that were underserviced such as fashion and food.
  • Negotiated a commitment from Shoppers Drug Mart for a long term lease, and assisted in their future planning site enhancement. (This was a tremendous coup as SDM, was a candidate for the new commercial development).
  • Retooled all marketing initiatives celebrating the history of the center, including media exposure, in order to strengthen and solidify the bond between center and community, therefore ensuring it remained part of the city fabric.

Conclusion

Our rigorous hands-on management techniques enabled us to improve cash flow dramatically during our tenure, resulting in a cash on cash (equity) return of above 20% per annum.

As a result of all our efforts we were able to maximize the potential of the shopping center and sell it for $44 million CDN to a large Canadian pension fund in 2005.

This represents a net profit of $13 million CDN dollars in 3 years, or a gain of approximately 42%.

Furthermore this represents an approximate 186% cash return on equity.

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