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Entering New Markets Successfully
Parkway Corporation was consulted on this project by the developer, Azure Developments, who had just completed a complicated and lengthy approvals process for a major new 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. The proposed development included a 240,000 square foot urban mixed-use project in the heart of Toronto’s entertainment district.
•Parkway was new to the Toronto market -we saw an ownership and market opportunity that would rely on becoming familiar with the Toronto market in a very condensed bidding and negotiating period.
•We surveyed the submarket extensively and were able to aggregate the total parking revenue and the dilution from its increased capacity after the completion of the garage.
•We calculated the increased demand from the new entertainment uses and how design changes to the garage facility would combine with our operating expertise to capture market share.
•One key insight was a design opportunity Parkway saw to increase the garage capacity by 15% from 370 spaces to 425 spaces at no extra construction cost. Our well-researched, aggressive revenue projections fueled by the capacity increase allowed us to outbid long term players in the market.
•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 RioCan Hall's ownership.
Parkway Created Value
•The developers received an additional $2,000,000 more than they had in their pro-forma as a take out of a portion of their equity in the overall project.
•Our bid gave the developer a takeout for a portion of the construction loan and therefore helped the developer's lenders underwrite the loan.
•Revenue projections were exceeded, doubling our minimum investment threshold by our third year of operations.
•Our operation set a new, higher standard of customer service in the Toronto market.