The Importance of Investing in Transit Oriented Development: Discussing Transit City Condos at Vaughan Metropolitan Centre
In this episode, Andrew la Fleur sits down with Shab Rajabzadeh to discuss Transit City Condos in Vaughan Metropolitan Centre (VMC). This will be the very first building of a 100-acre master planned community from Smart Reit/Smart Centres and built by CentreCourt Developments that could see as many as 30 high rise condo buildings in the decades to come. Situated right beside the new VMC TTC Subway station, and steps away from a future 9-acre central park, as well as a 100,000 square foot YMCA, and home to a BUCA restaurant and cafe. Listen to learn more.
SHAB RAJABZADEH INTERVIEW HIGHLIGHTS
1:10 Shab Rajabzadeh’s opinion on the market right now.
2:47 Importance of investing in the right project and location.
5:43 What are the highlights of Vaughan as a place to invest.
9:42 What is the development going to look like when it’s done?
10:31 How many high rise buildings are they planning in Smart Center?
13:12 Building specifics and how close transit city condos to the subway?
16:53 Amenities of the building.
18:50 Will residence have free access to those facilities?
24:17 Investment standpoint.
Andrew: Okay, it’s my pleasure to welcome back to the show returning guest Shab Rajab today. Shab is the vice president and co-founder of Cornerstone Marketing Realty inc., and he’s represented some of the top buildings in the city from a sales and marketing perspective. Shab, great to have you back on the show.
Shab: Thanks very much, Andrew. I was looking back to get on the table and talk with you.
Andrew: Yeah, it’s been awhile. I think you were one of the very first guests I believe, along with your partner, Johnson. Very first guest on the podcast, and here we are, almost three years later, and the podcast is still going strong. Stronger than ever.
Shab: Absolutely. Excellent.
Andrew: Yeah, I want to jump into obviously Transit City condos today, and we will get into that, but just before we do, just want to get your take on the market. Obviously, we’re at historical times here in 2017. The market has been crazy. I’d love to just see from your side of the table your perspective. How do you see the market right now, and where do you see the market heading over the rest of this year?
Shab: I mean, everybody asks that question, and I think do you have the government involved to set up certain measures in attempt to try to cool down the market or take control, and my humble opinion would be I don’t think they’re on mark. I don’t think they’ve done their homework. A few years ago, they went after the mortgage market and tried to cool down that angle, and that didn’t work. Now, they’re going after real estate and buyers directly. I think market for this year will be consistent. I think it will continue to prevail. I think purchasers or investors, what have you, should be very sensitive as to where they buy.
They should pick and choose and work with the right people that know how to analyze areas. They should stick to value of transit oriented developments. They should be looking at an area where there’s transportation, whether it’s in the 416 or 905 and look at what the government’s policies are in those areas to look at the future and see what the growth will be and the pattern and the shifts. I think you should sustain any weather, whether it’s up or down should not matter as long as you’re next to transit oriented developments.
Andrew: When the market’s hot like it has been, there’s a rising tide lifts all boats, doesn’t it? You do start to see B and C locations selling out and doing well, but the market’s not always going to be like this, so maybe talk to the importance of investing in the right locations, the right projects in times like this when everything is selling.
Shab: You pretty much just said it, right? You said there may be a A, B, or C, or D location. I think I have a nice portfolio myself and am very risk adverse as a purchaser, and today I work very hard for what I do and what I earn. I myself do the same thing. I, in the past, have asked professionals like yourself, “What do you think of the market neighborhood’s you’re selling?” For instance. Again, it goes back to fundamentals of real estate. I think scarcity neighborhoods may be something to look at if the scarcity of inventory. You may want to be the one that moves into that neighborhood.
You want to look again into transit oriented developments where there is very low risk but good upside to it. You can weather any storm again. All in all, again, it goes back to fundamentals of real estate and doing your homework on it. Again, transit is the way to go. Just to loop into Transit City, you look at Transit City and it’s the first subway oriented development in the 905 in over 45 years. Great policies by the mayor in this city, and truly a nice infrastructure we’ve had over 40 years that’s expanding this city and allowing people the access to the downtown core.
Andrew: Right, so the new subway line, which is going up to Vaughan, and it’s going to be opening very soon.
Shab: Yeah, last time I checked the TTC website, we’re always up to date, because professionals such as yourself always ask us, “When is it?” We’ve been in tune with it. They’ve said in the next 12-24 months it should be complete. Look for yourself on the TTC website. Some of the stations are pretty more or less complete. The below grade railing has been-
Andrew: They’re getting very close, yeah. Certainly a project like Transit City condos, which we’re going to get into now, is going to be … The subway’s going to be open long before people are moving into this building.
Shab: Absolutely. I mean, the infrastructure of the residential, the office revolves around this subway station and the York regional to transit terminal, which is also part of this project that we don’t usually talk about. It should be coming up well in advance of the occupancy of Transit City.
Andrew: Now, I know you’re super excited about the project, and not just this project, but actually the whole vision for the entire area around the subway and the master plan community that Smart Centers is building. There’s so many highlights that you can touch on, and you’ve got some great materials. I’ve got a list here in front of me of eight or 10 major highlights of this project and what makes it unique. We’ll see how many we can get into in the interview here, but maybe if you can start with the big picture of Vaughan. Why Vaughan? Then, narrow into specifically the master plan community here and then from there, maybe we’ll zoom into the building itself.
Shab: Very good place to start in fact. I mean, we had a press release unveiling Transit City in April just to talk about it to invite some of the media outlets to kind of release some information to market business. Many people have been asking about this development. Many buyers have held back buying in that area in anticipation for this project. At the press release, the mayor was there, and some of the key city delegates were there and some media outlets and some of the designers, developers, and their consultants were there. They were talking about the future vision. I guess to look at it, this whole Vaughan Metropolitan Center evolution of the 9:05 or Vaughan in itself, it’s a pretty large development and transformation.
They’ve broken this main intersection of Jane and Highway Seven through four different corners whereby the northwest corner where Transit City’s located is the one and only that has this hub, let’s say, the York regional terminal, the metropolitan subway station as well as a nine acre park. Those three main components that brings the neighborhood together, ti’s where Transit City is, so no other development or adjacent site will be able to offer the same. I think that’s what differentiates this neighborhood, the Vaughan Metropolitan with any other development that has sold or is selling or will sell in the future based on the work we’ve done.
The city is really dependent on the lands of SmartREIT or Smart Center’s place, which is description in the name for this development. What’s really, again, important about master plan community is what are you going to give me 10 years, 15 years from today? What are you going to design? Many of us fail to ask those questions. Many of us don’t necessarily look at it, and we may just simply look at how beautiful is the architecture of this one single building.
Andrew: Right, or what’s coming in the future is so important.
Shab: Absolutely. People like yourself will ask those questions, say, “Listen, if my buyers and my top buyers buy in this area, what should they expect? How will this transform? How would you bring more value to this neighborhood?” Again, if you look at the city’s plan for the Smart Center place where Transit City’s located, they’ve envisioned this project for the next, let’s say 10, 15, 20 years. They’ve plotted out where each development will be, where the nine acre park will be, where the YMCA will be in this project, where the York regional transit is, where the hub is, where every detail of it has been planned contrary to many other developments, master plan communities whereby you can’t dig into those intricacies.
It’s very challenging, because there is a lot of unknowns. I think that’s one massive thing that sets this whole Vaughan Metropolitan center apart from any other development. Again, Transit City is synonymous with this whole Vaughan Metropolitan Center. Without Transit City, you can’t have VMC, Vaughan Metropolitan Center.
Andrew: Right, so Vaughan Metropolitan Center is a pretty much as it sounds, it’s a new metropolitan center which is being built from scratch. It’s centered around the new subway station.
Shab: That’s right.
Andrew: -from your presentation you just gave. 442 acres, and then the Smart center’s land is about 100 acres of that 442.
Andrew: The single largest land owner in the Vaughan Metropolitan Center is the Smart Center, SmartREIT.
Andrew: Transit city condos is the first condominium building of the Smart Center master plan 100 acre community.
Shab: That’s correct.
Andrew: Some people might have a hard time understanding how big 100 acres is, so maybe can you give us some … Paint us a picture of how big is 100 acres and again, you’re buying in the first phase of a massive development, so what is the development going to look like when it’s done?
Shab: To quantify, I guess, one way to look at it is two ways to look at it. One, I look at it immediately, and my is just saying, “How many parks in these subdivisions …” Usually in subdivisions in Richman Hill and Markham, that city plans out and is involved. They offer a park in the neighborhood assuming some of these parts are a half acre park.
Andrew: Right, a half an acre.
Shab: The borders of it, right?
Andrew: Decent size park, yeah.
Shab: Imagine being 200 of those parks is 100 acres. That’s the best way that comes to mind, because not only does this Transit City and Smart Center’s place have this massive park component, but it just 200 parks. That’s 200 subdivisions essentially in a lack of a better description in one neighborhood.
Andrew: How many high rise buildings are there projected? I mean, it’s in early stages here, but roughly how many high rise buildings are they planning in the smart center?
Shab: The design of it, I look at it as a way of looking at Manhattan, surrounding Central Park. That’s the vision of this entire neighborhood. In terms of planning the number of buildings, I don’t have a true number, because there will be an amenities component to the neighborhood, commercial office.
Andrew: It’s going to change over time.
Shab: It may evolve to-
Andrew: We’re early stages, yeah.
Shab: -more positive, because they have so much left to deal with, but currently as it stands, there will be well over 20 residential buildings, maybe up to 30 residential buildings coming in the next decade or more.
Andrew: 20 to 30 residential condo towers. Wow, and you’ve got a nine acre park-
Shab: That’s right.
Andrew: -which is right in the center of it. Just in terms of scale, I believe Regent Park, which a lot of listeners will be familiar with, that a lot of my clients certainly. The park in the center of Regent Park, which is one of the biggest parks downtown, it’s about six acres. This is 50% bigger than the park in Regent Park is this. It’s going to be called, for now at least, it’s called Central Park, or the central park in the development here.
Shab: That’s right.
Andrew: Up to 30 residential buildings, so investing here, it’s similar to, I think, investing in the first building of Regent Park or the first building of City Place. The first building of fill in the blank of a major master plan community. I mean there’s not that many of them.
Shab: That’s correct. I mean, I believe I was told this. The largest in Ontario, if not largest in Canada, development. To be honest, Andrew, it takes a lot of time planning the details of it. This is one of the better ones we’ve been involved with and have had the ability to have an input on. It’s turning out to be beautifully. I think a lot of the buyers nowadays are extremely educated whereby they do their homework. They understand what this means. I mean, buying in the initial phase, which is the Transit City, it’s paramount to many because essentially the buildings of this first phase will be the ones surrounding that subway terminal and the transit terminal.
I think a lot of listeners understand-
Andrew: Yeah, buying into the first few buildings-
Shab: Is the way to go.
Andrew: -of a 30 building project.
Shab: Yeah, it’s still first phase. Getting a unit will be interesting to see, right?
Andrew: Yeah, absolutely, and anybody who’s bought in the first phase of City Place, Regent Park, Liberty Village, you know, any of these communities, East Bay Front, anywhere has done extremely well. I think TTC Access, let’s maybe get into the specifics of the building and what’s immediately surrounding the building. How close is Transit City Condos to the subway?
Shab: I’m told around 150-200 steps you’re in the subway. Let’s just step back for a second. We talk about this whole subway location, so what essentially Transit City is and what this whole Vaughan Metropolitan Center is, Union Station and Young and Blue are overlapping and just being shifted to Jane and Highway Seven. That’s what this is all about. Transit City is the one that has this infrastructure of transportation. As soon as you come out of the building, you step out. Immediately facing you will be the York regional transit hub, which gives you access to nine of the municipalities that surrounds Vaughan.
Keep in mind, Vaughan is extremely powerful in a sense that not only progressive rules and policies from the Marizan, but at the same time, they’re surrounded by all the other York regional municipalities. Having this York regional transit terminal gives you access to all nine. Our tagline has been 43 minutes to everything, so whether you want to go downtown or Markham or Richman Hill or New Market, Brampton, [inaudible 00:14:20] and so forth, you’re able to access with the York regional transit number one. Number two, immediately when you get out of our building, when you walk towards the transit terminal, just where transit terminal is you have a low ground direct access to the subway station.
That’s the second component. Currently as it stands, there’s a KPNG building right on site right now, brand new building looking phenomenal.
Andrew: Yeah, great building.
Shab: I think they just got the lead certification award for 2016. That building itself has a direct path access, so hence why I bring this understanding over Lane Union station and Young and Blue into this Jane and Seven neighborhood but with everything being we are located in Transit City.
Andrew: Right, so I think what you’re saying in terms of union station just to make it clear for everyone listening, Union Station in the sense of the starting point-
Andrew: -of the transit. The starting point of the University line now is going to be the Vaughan Metropolitan Center station, which is-
Shab: That’s correct.
Andrew: -100 steps from your door. Then, the Young and Blore analogy is absolutely saying Young and Blore is that cross point, east, west, north, south. You have the subway taking you into the city. Then, you also have the bus network and a major bus station connected to the subway station underground as well. Also right at your door.
Shab: Yeah. I mean, it shows-
Andrew: Then, as well taking you downtown.
Shab: Just to add on, it shows how powerful this whole thing is, because if you look at our dialog right now, we’re thinking and talking about the subway station subways, which is the biggest part of it. Let’s not forget Jane and Seven right next to our site is the 400. You’re on Highway Seven, and immediately to the south you have 407. We tend to forget, but it is truly a mobility hub.
Andrew: Some people drive, yeah.
Shab: Yeah. Some people may drive. Less and less people are driving in that area.
Andrew: Less and less people are driving, but yeah. I mean, if you drive, it’s a no brainer that it’s an amazing driving location because you’re right at the cross point of two major highways taking you anywhere in the GTA in rapid order. Obviously, the subway and the bus terminal are right there. What else can we talk about? Again, there’s so many highlights here. Let’s talk about … You want to jump into maybe the amenities and the key-
Shab: Yeah, absolutely.
Andrew: I really want to obviously highlight the lobby and the whole experience there.
Andrew: I’ll let you explain what I mean.
Shab: Absolutely. As it stands right now, Transit City will be 55 stories tall. It will be the tallest building in the York region. We’re extremely thrilled about it, because not only the building design is very much one of the center core staple designs where it’s timeless design, but also has a lot of details involved in the design process and amenities of the project. Seeing the massive vision of this Transit City first phase being several buildings, one thing we have introduced to this development is the YMCA immediately to the south of this building.
The YMCA as it stands right now, they’ve been around over 100 years, well before I was born. They’re amazing owners and operators of such wide array of amenities. That is a staple for the amenities program for Transit City, because it gives you state of the art 100 acres of amenities from city library, childcare, 25 meter swim pool, to aquatic center, to everything you can imagine and think of, including the basketball court.
Andrew: And gym and everything [crosstalk 00:18:09].
Shab: These are things that we are always challenged with from the marketing side or development side where we want to give you everything amenity, but you can’t because of restriction of size or cost or limitation. Again, by the city’s saying you can only have this much amenity work, this where we’ll cap you out, limit you at or ask for.
Andrew: People don’t want to pay maintenance fees of two dollars a square foot.
Shab: Exactly. Absolutely, and they don’t want to take on the risk, so essentially what you get with Transit City is you get this state of the art amenities-
Andrew: Right next door.
Shab: -right next door, like steps, and you don’t have to worry about maintaining or operating it. That alleviates what you’re always concerned about.
Andrew: So just a point of clarification with the 100,000 square foot brand new YMCA building next door, will residents have free access to those facilities?
Andrew: Do you just mean they can go to that building and it’s just right beside them?
Shab: The setup has been that we would have a shared facility with YMCA to allow the owners a pass, which whereby they would register and be able to use that as a pass to go in. It’s already in a way subsidized and rolled into your maintenance fees. Rest assured that maintenance fees will surprise you that it’s actually quite low when you look at the budget, because we had favorable terms of course, because again, this is what you get when you have-
Andrew: You’re controlling the whole process.
Shab: -SmartREIT. When you have these guys involved who’s allowing YMCA to take a position in that area and there’s much benefits coming to YMCA as a whole but also to the owners or residents of this project.
Andrew: Right, so phenomenal amenity right next door. 100,000 square foot YMCA. We’ve already talked about the nine acre park, which is about, I guess, one block away. We’ve talked about the bus station and the subway station, which are connected underground. It’s about 100 steps from your door. A major point which we haven’t talked about is the lobby and I’ll let you explain.
Shab: I was saving the best for last. Interesting park for-
Andrew: It’s amazing. Yeah. I love it.
Shab: We’ve been so excited about the lobby experience, and you know me quite well outside of the business and inside the business that I really spend a lot of time researching, trying to understand what is best for a project and work with great developers. One thing we’ve done here is bringing that beautiful, how do you explain, shangri la lobby and just putting it right into your lobby.
Andrew: Right, so for those who aren’t familiar, a lot of people listening who know anything about the Toronto condo work, shangri la lobby downtown Toronto, it’s … You said it a few minutes ago in a presentation. It’s probably known as the best lobby in the city. It’s not because it has the best design or furniture or whatever, which is all, of course, amazing. It’s because you have this unique experience and atmosphere where there’s a bar and a café in your lobby.
Andrew: You’re connected to the street and there’s no energy and there’s people coming and going. It’s that kind of hotel lobby high end, five star hotel lobby experience. You’re sort of taking that and bringing a piece of that downtown cosmopolitan, whatever you want to call it, lifestyle, five star lifestyle, to Vaughan.
Shab: Absolutely, so not only do you bring the quality of it, but the seamless feel and the airy, open space of a double height lobby, beautiful marble cladding and just nice finishing. It’s all in there with the fireplace, but-
Andrew: That’s right. I don’t think we mentioned on who the specifically … Who’s going to be there.
Shab: That’s right, so like I said, I like to put the cherry on the cake. One thing we’ve done to really differentiate it is give you the hotel feel and the experience and the quality of a nice, high end hotel but bring you something a hotel doesn’t necessarily always bring, and that is bringing Booka. Booka, I think those listeners and those that know downtown well, metropolitan, restaurant Booka is one of the well respected restaurants, artesian, Italian food.
Andrew: Absolutely, one of the top restaurants in the city.
Shab: Huge following.
Andrew: There’s a few locations now.
Shab: Huge following, right? That’s also not only King West, one is in the Four Seasons in Yorkville. We’ve had the pleasure and the luxury of having them become the operators essentially of your lobby. There will be two components to having Booka in the base of your building. One will be, of course, a bar Booka whereby you can have your morning snacks, croissants and whatever Italian or French pastries and great, great coffee. They’ll have that available. The second component to it will be a very well managed restaurant by a true … Remember, Booka is a true chef owner operated business, which is different than many others where you may have a finance company, or anybody can essentially buy if you are financially capable.
No, these guys come from a culinary background. I think that’s important to remember. That would be it. No only that, what makes it even more amazing is that you could have essentially food: breakfast, lunch, dinner brought to your unit.
Andrew: Oh wow.
Shab: It is not done by the hotel operators. It’s done by a very well respected, a restaurant that has something to lose or have a very big reputation that would want to maintain that quality. For me, that goes a long way.
Andrew: Wow, so you’re going to actually be able to order Booka food and drinks or whatever to your suite in the building.
Shab: That’s right.
Andrew: Again, it’s like that five star hotel experience kind of thing-
Andrew: -right in Vaughan, which is again, a first for Vaughan absolutely. Just to recap, Booka, one of the best restaurants in the city right now, they’re going to be opening a sort of café in the lobby itself-
Shab: And a restaurant.
Andrew: -and then also separately a full Booka restaurant-
Andrew: -in the retail portion in the building itself.
Shab: Absolutely. Yeah, we’re trying to really bring it into the culture of the design and the fabric of the lobby experience. I think that’s how it’ll work and unveil.
Andrew: That’s amazing. So many more points to talk about. We’re running short on time, but one thing I did want to highlight again is from an investment standpoint, it’s so important not just transit oriented, we talked about, is the jobs and the money obviously. You want to follow the money when you’re investing your real estate. Look at the jobs that are in a location where you’re investing and that are coming to a location where you’re investing. Maybe speak to that a little bit in terms of the commercial office aspect. What’s there now? What’s coming?
Shab: Absolutely. I mean, if you look at the true master plan of this Smart Center’s place, you’ll see that they’ve outlined not only the residential buildings in the park, in the subway, in the transit and so forth, but one nice component element to it is employment. Again, the mayor has been spring heading and jump starting this whole thing of offering very beneficial tax policies to big companies like KPNG who is an anchor tenant right now, and PWC as well as I believe it’s Miller Thomson, one of the sisters, the seventh largest law firm.
Again, bringing that, like you said, the metropolitan employment level bringing you high income paying companies into Vaughan, but again, your cost of living and acquisition is of-
Andrew: Is much lower-
Shab: -is much lower.
Andrew: -than downtown. Yeah.
Shab: For those that are investing or wanting to live there or take advantage of this is that they get an income of downtown but living in the suburbia of-
Andrew: Yeah, a lot of people don’t realize. I think that’s news to a lot of people is there are major, major employers that are typically associated with the financial district downtown, prime downtown Toronto and New York and any other major city. Like you said, KPNG, PWC, Miller Thomson, one of the biggest law firms in the city. I think Harley Davidson I believe is coming in there as well with some offices. Major, major employers, high paying employers, all those people working there. They’re going to need a place to live.
Andrew: To be able to live steps away in a building like this, subway at your door, your place of employment at your door, and like you said, these are high paying jobs. You’re not going to be paid less because you’re working at PWC in Vaughan versus PWC downtown. You’re still going to be making a high salary. Yet, the cost to rent or the cost you own is obviously much cheaper than at King and Spidina.
Shab: Absolutely. I mean, strategically for these auditing firms that are multi-national is a brilliant move if you think about it. I’m mean, you look at their number of employees they have from York University. That’s three stops away from Transit City. They’re pretty much positioned themselves not only to where Vaughan Metropolitan Center is. Also they have position downtown, so they’re able to get the smartest and the best to work for them. Hence why they’re some of the leading firms in the country, and globally as well.
Andrew: Well, I think we’ve covered most of the key points that I want to talk about. I’m sure there will be lots more to know about this project, but is there anything else before we let you go, Shab, that you want to add or any other final parting words for the listener? Especially somebody who’s thinking about investing in a condo right now, or this month?
Shab: Absolutely. I mean, like you said, there’s just so many details to this master plan community, and for the listeners, for those that will purchase in this area, they will be part of a history. This is the truth, because again, it’s the first time you’re going to be able to buy at the first subway station that’s in Vaughan. It’ll be the first station of a 905 neighborhood bringing into 416. This will be history. If you’re able to buy into the first phase, I’m sure you would agree, there’s a lot of people wanting to get into this project. I think they should do really well with it in a mid to long term basis.
Andrew: Awesome. Thank you very much, Shab, for your time, and looking forward to working with you on the project.
Shab: Thank you very much for having me.
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