LuCliff Place, a 24-story office and apartment complex, occupies a prominent block in an up-and-coming neighborhood of downtown Toronto. Recent expansion of the Financial District and new high-rise condominiums have made the area increasingly popular. In June 2012, the owners of the property, a Chinese-Canadian family, approached CBRE Capital Markets Asia to participate in an RFP process to sell the asset. It was a complex assignment: The owner sought a bilingual international agent based in Hong Kong with extensive Asia reach, as well as local expertise in Canada, and a cross-border marketing team to coordinate and oversee the disposition. CBRE assembled a global team consisting of professionals in Canada and Hong Kong, and won the assignment ahead of three other industry competitors.
Given the owners were based in Hong Kong and several time zones away, CBRE scheduled a weekly conference call at the very beginning of the sale process. This weekly reporting created trust between the client and deal team as key milestones were achieved. At the same time, it overcame the challenge of distance as the client remained engaged and fully up to speed in the process.
“The goal of CBRE’s international team was to offer 24/7 seamless coverage,” noted Cynthia Wong of CBRE’s Private Capital Group in Canada. “Extensive communication with the client included a weekly reporting call and progress update report throughout the entire listing term.”
CBRE’s Investment Team comprised professionals based in Hong Kong, Vancouver and Toronto, offering both local market knowledge as well as deep relationships with Asian investors. The team provided market-leading research and analysis in the residential and office sectors.
“The building has residential, retail and office space, as well as a five-level underground parking garage, so we brought in experts in each area,” said Kiki Lai, CBRE’s Director, Capital Markets Asia, Hong Kong.
“It was very important to the owner that our team could market the property simultaneously in Asia and Canada, thereby creating the widest universe of potential buyers,” said Jaysen Smalley, CBRE’s Senior Vice President, Canadian National Investment Team, Toronto.
CBRE collaborated with a local architect to demonstrate the redevelopment potential of the site, showing how it could be expanded to add 100,000 square feet of residential space. CBRE’s marketing brochure included renderings and budgeted costing of the development potential to influence investor pricing. “We provided a vision for what could be done with the site,” Smalley explained.
Using CBRE’s extensive local market knowledge, the team demonstrated potential upside in both the apartment and office rents. Investor confidence in CBRE’s underwriting and modeling assumptions was the key to achieving premium pricing.
CBRE completed more than 35 tours of the complex for various buyer groups in just over three weeks. On each tour, CBRE’s deal team answered investor questions and influenced buyer perceptions of value. The property was sold just over two months after the marketing campaign began for C$112.2 million to KingSett Capital, a leading private equity firm in Canada.
“With solid research, analysis and underwriting, CBRE teams generated an effective pricing strategy which provided a consistent value during the term of the assignment,” Wong said. “The client indicated that they're fully satisfied and pleased with target value achievement.”
The outcome “showcases the capabilities of the CBRE platform when it is fully utilized,” said Kenny Kwok, CBRE’s Senior Director, Investment Properties, Hong Kong. “Our various business lines and offices worked cooperatively and cohesively to meet the multifaceted needs of our client. This model will become more important as business and capital increasingly have no borders.”
“There are many firms talking about going global but few have actually implemented it,” Lai added. “CBRE demonstrated that we were able to pull together the strongest team in each region for the benefit of the client.”