RioCan Hall Garage - Entering New Markets Successfully

Toronto, Ont.




240,000 sf


1997 – 1999

Completion Value:


Current Value:


Developed By:

Parkway Corporation (Garage Portion Only)








Festival Hall Developments Ltd.

About Festival Hall Developments Ltd.

Festival Hall Development Ltd was formed in February 1996 through a partnership between two Toronto-based firms: Talisker Corp, a private real estate investment and management company, and Azure Developments, a development company involved in the Canary Wharf project in London, England.

In the fall of 1997, Azure Developments, whose principals are all seasoned real estate developers, had just completed a complicated and lengthy approvals process for a major new build development in the midst of a section of the city that was known up to that time for its adaptive reuse of historic loft buildings.

Parkway was looking to diversify and expand its garage ownership interests.

At the design development stage of the project in late 1997, Parkway Corporation was consulted by the developers of the proposed 240,000 sf urban mixed-use development in the heart of Toronto’s entertainment district. Parkway saw a design opportunity to increase significantly the garage capacity from 370 spaces to 425 spaces at no extra construction cost and subsequently, in early 1998, Parkway acquired a leasehold ownership through a creative deal structure.

The structure of the purchase provides a specified preference return on equity to Parkway and a sharing of post debt service cash flow to Festival Hall's ownership.

Business Challenge
The initial challenge that Parkway faced was that we did not have experience operating in the Toronto market. We saw an ownership opportunity that we did not want to miss by being too conservative with our revenue projections. In a very condensed bidding and negotiating period, we had to become familiar enough with the Toronto parking market to avoid over paying for the asset.

The Solution
We surveyed the market within a three-block radius so extensively that we were able to aggregate the total parking revenue in the market and the dilution from its increased capacity after the completion of the garage. We calculated the increased demand from the new 240,000 sf of entertainment uses and the extent to which, through design changes to the garage facility and our operating expertise, we could capture more than our share of the overall market.

By redesigning the garage within the established gross area we significantly improved the functional layout and revenue capacity of the facility without adding any cost to construct it.

Value and Benefits Delivered

The following are ways in which Parkway created value:.

  • ·         The redesign yielded 55 additional parking spaces amounting to a 15% increase at no additional area or construction cost to the developer.
  • ·         The garage set a new, higher standard of customer service unseen in Toronto up to that time, which is of direct benefit to our parking customers; and over time, as others have copied our standards, a general benefit to a much larger segment of the Toronto parking public.
  • ·         The added capacity we created and our ability to understand the market and be comfortable with our aggressive revenue projections allowed us to outbid the Toronto Parking Authority and Sam Zell's Equity Office REIT for a 99-year leasehold ownership of the garage.
  • ·         Our bid gave the developer a takeout for a portion of the construction loan and therefore helped the developer's lenders underwrite the loan.
  • ·         The developers received an additional $2,000,000 more than they had in their proforma as a take out of a portion of their equity in the overall project.
  • ·         Our revenue projections were more than achieved. By our third year of operations, Parkway's return on our invested equity was double our minimum investment go-ahead entry threshold level.

For Parkway, cases like this are the rule, not the exception. As one of the few parking operators who have developed garages for our own account, we have been down the road many times and know the best route to added value.

Repeatedly, Parkway comes up with new ways to make projects better. Whether you have a building that could be reused or a new development, Parkway can take your project to a higher level.