A Case Study in Unlocking Commercial Property Value and Development Potential – 235 Jarvis Street, Toronto
Posted on: September 14, 2016
At MSR Holdings, we acquire commercial real estate investment properties where we can unlock significant value and which are poised to benefit from economic growth. Our investors benefit from both immediate cash flow and an increase in capital appreciation.
While we expect capital appreciation to occur over time, there are several methods by which we actively unlock an investment property’s hidden value. Doing so is central to our investment philosophy.
This project began with the acquisition of a property located at Jarvis St. and Dundas St. in Toronto, Ontario. At de-acquisition, we were able to achieve our goal of a favourable sale to a developer, generating significant ROI for our investors over a 4 year span.
The Investment Opportunity
Upon assessment of the property at Jarvis and Dundas, we determined it was located in an upcoming area and therefore offered a major opportunity to achieve a high ROI for our investors over a 3-5 year investment horizon. The factors which influenced this decision included:
- Two respected hotels on either side of the property (a Hilton and The Grand)
- Located steps away from Ryerson University and Yonge-Dundas Square
- Government had recently purchased the site across the street
- Directly in front of the property was an empty plot of land, later purchased by the developer Great Gulf Homes
- Development plots existed down the street
These considerations led us to conclude the property met our investment criteria and showed potential for exceptional returns. As such we purchased the property at Jarvis and Dundas with the help of our investors in 2010.
We purchased the property with the exit strategy of allowing it to appreciate in value, then selling it to a developer. Building upon this strategy, we negotiated an agreement with the neighbouring property owner, stating both parties would sell to a developer at the same time, when the timing offered optimal returns.
Following our plan, we sold the property in 2014 to Parallax Investment Corp., a developer who planned to build a 40+ storey residential/commercial condo on the location. In addition to the sale, we also won the contract to manage the property until the tenants had moved out to allow condo construction. As of July 2016, the condo construction was underway.
The property was purchased for $2.4 Million in 2010 and increased in value by $3.6 Million at the time of sale in 2014, generating a 153% ROI for our investors over 4 years.
- Original investment: $2.4 Million
- Total return: $3.6 Million
- Annual ROI: 38%
Through our proven approach to commercial real estate investment, we are able to identify those properties which have the greatest potential for us to create value, and in turn, achieve exceptional returns for our investors.
MSR Holdings Inc. acquires exclusive commercial real estate investment opportunities in the U.S. and Canada, currently focusing on Orlando, Florida. Contact us today to discuss becoming one of our select investors.
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