Property Development Portfolio

PLE735 Private Development | Assignment 2

MOON Condos 5568-5576 Yonge St. North York, M2N5S2.

Development Proposal

ISSUED : April 16, 2019 VALID TO : MAY 04, 2019

Issued by : Joanna Oon & Matthew Muto Prepared for : Peter Jakovcic (peter.jakovcic@ryerson.ca) tel : (417) 991-9911 email : mooncondos@gmail.com Ryerson University

TABLE OF CONTENTS

April 16, 2019 | MOON Condos

01 Introduction Development Proposal Example Rendering of MOON Condos Yonge St. and Finch Ave W - Commercial Hub Affordable Urban Living Vibrant Yonge-Finch Living 02 Site Analysis Location Legal Description Property Dimensions Site Characteristics Constraints Site Context Transportation Network Community Services & Amenities 03 Market Analysis Market Viability Demographic Profile Supply and Demand - Surrounding Developments Site Benefits and Challenges Statistical Breakdown of Condo Sales in Willowdale Target Market 04 Policy and Guidelines Provincial Regulations Municipal Regulations

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05 Financial Feasibility Introduction Preliminary Analysis - Total Project Cost = Gross Operating Income, Operating

Expenses & Net Operating Income, Cap Rate & Market Value Assumptions -dev program, stats, soft cos, hard cost, cap rates, efficiency rate,

instirutional rent, retail rent, rental escalation, vacancy rates, residential price

per sq ft, land costs per sq ft, construction loan rate, remainder loan rate.

Revenue Projection - IRR and NPV, Cash on Cash, Market Value Review, quantify revenue Milestone Summary Summary of Financial Feasibility Construction Cost Financing Rental Rates & Operation Pro Forma 06 Conclusion Site Analysis Market Analysis Financial Feasibility 07 Recommendation 08 Work Cited 09 Appendix (Pro Forma)

01 | I N T R O D U C T I O N

April 16, 2019 | MOON Condos

Development Proposal With instructions from MJ Developments and the knowledge gained from the previous report, our team proudly presents the MOON Tower Complex.

Example Rendering

Based on the render shown above, the MOON Tower will be altering by the streetscape of Yonge and Finch. The initially 10m commercial building will now be complemented with an apartment building above.

This mixed use building compliments the streetscape of Yonge and Finch. Thus the development proposal will be a seamless integration within its site.

Massing Proposals

Massing Proposal

Massing Elevation

Massing Plan 1

Site Overview

April 16, 2019 | MOON Condos

Program Proposals 01 Commercial At ground level the for commercial storeys use will conform to the surrounding height to complement the ground level streetscape of Yonge St..

Considering that Yonge and Finch is an extremely busy intersection, the commercial at ground level have already proven success with its existing Shoppers Drug Mart that will be rehoused within the new development proposal. The maximum height conforms to the zoning by-law of a maximum of 9.2 meters above grade.

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02 Residential Amenities

03 Pathway

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The development proposes a massing on top of the current parking lot area.

This space will be used to serve as maintenance and operation of the residential and commercial uses. It will contain office spaces up to 15 staffrooms, a lunch room, a cafeteria and 3 meeting rooms. On top of that, residential amenities such as a gym, swimming pool, sauna, badminton court and a study room will be placed within the west end of the building as it has more privacy as compared to the east facade of Yonge St.

Between the commercial and the amenities component is a pathway that serves to compliment the existing pathway on the site for service trucks and back of house access.

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04 Residential

05 Parking

The residential component will have 29 storeys with a total of 350 units of 1-BR, 2-BR and 2-BR+den units. Site demographics has shown that residents around the area are typically from extended families as the main market income comes from ethnic commercial spaces as they pass it down amongst their family members. Therefore, there is a growing need for bigger units to accommodate for bigger families and MOON condos will be designed to accommodate this demand. The residential is also designed to have each floor plates offsetting each other to create balconies for a better living condition.

There will be 2 storeys of underground parking of a total of 420 places provided. Of these would be 320 for residential uses, 25 for visitor use, 55 for retail, and 20 for office use.

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02 | SITE ANALYSIS

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Yonge St. and Finch Ave W - Commercial Hub The commercial character along Yonge St. is notably expansive, thus reasoning it to be an excellent location for intensification that MOON Condos will bring to the area. The marquee feature of the neighborhood is most definitely the fact that Yonge and Finch Station is located 500m North of the site. All within a 10km radius are the following major shopping centers: Yonge Sheppard Centre (2km North), Centerpoint Mall (2km South), Bayview Village Shopping Centre (4km North-West), Promenade Shopping Centre (5km South-East), and Yorkdale Shopping Centre (9km North-East).

Adding to the commercial nature of the site, MOON Condos will implement exceptional commercial retail spaces at grade which cater to the neighborhood demographic and promote an urban lifestyle. The commercial retail will strategically target and cater to a wide scope of individuals providing useful implementation for all demographic and age groups, drawing on the potential of the exceptional accessibility of the site.

Vibrant Yonge-Finch Lifestyle Aside from its abundance in shopping centers and domestic amenities, Yonge and Finch hosts a vast latenight dining spots, full-service restaurants and specialty alternatives. This urban center is historically known for having a large selection of Asian inspired restaurants. Open 24/7 is popular Korean Cuisine The Famous Owl of Minerva located 1km South, along with an extensive list of dining options to choose from along Yonge St. The area also supports a family friendly nightlife after dark. For instance, Twister Karaoke is one of the many cherished local entertainment spots and is located just 50m North of the site. The area also hosts a variety of bars, lounges and pubs in close proximity to the site.

Urban Living Located adjacent to TTC’s Yonge and Finch station, the area around this hub has evolved from a suburban neighborhood to a lively urban center supporting the conveniences of downtown living but at a lower price. In terms of the building design and its affordability, our expert architects will ensure that the condominium units are design with flexibility in mind, as well as the sensitivity for family living. The units will be supported by interior finishes, supporting spaces, materials and architectural details with extra sensitivity to the prospect of future resiliency and design excellence while simultaneously keeping within range of the determined target market.

The location is supported by all the urban amenities needed for a 21st century lifestyle. For example, located 800m South of Finch at Yonge and Churchill Ave is a Metro Megastore – open 24/7, and located 5km South is a Loblaws, two equally strong centers for groceries and domestic merchandises. Additionally, in support of an international palette is the Korean grocery vender H Mart located at Yonge and Olive Ave just 170m South. Further supporting an urban living environment is the degree of drugstores in close proximity. Rexall, Metro Pharmacy, Loblaws Pharmacy and certainly the 24/7 Shoppers Drugmart that will be subsidized in our new development, are all within walking distance of the site.

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Site Overview

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Address 5568-5576 Yonge St, North York, M2N5S2 Location The site of MOON Condos is located directly north of Old Toronto, and is administrated under the City of North York (as seen in Figure 2). The parcels are located on the South-East edge of the block directly situated on the South-West corner of Yonge and Finch (as seen in Figure 3). The proposed site is currently active, consisting of Shoppers Drug Mart, which will need to be incorporated into the grade level podium of the new development.

Figure 2 Source: City of Toronto Open Data

NTS

N Figure 1 Source: City of Toronto Open Data

0m 1:60 60m

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Municipal Address 1.

5568 Yonge St, North York, M2N5S2 2.

5576 Yonge St, North York, M2N5S2 Legal Description 1.

PT BLK A PL 3705 NORTH YORK AS IN TR15501; T/W TR15501; TORONTO (YORK/TORONTO),

CITY OF TORONTO 2.

PT BLK A PL 3705 NORTH YORK AS IN TB585971; S/T & T/W TB585971; TORONTO (N YORK),

CITY OF TORONTO Property Dimensions Sizing of Lots To Be Consolidated Municipal Address

Property Type

Area (m2)

Party to

5568 Yonge St 5576 Yonge St

Commercial Commercial

323 3103

Mipo Sales Limited, Nivlog Investments Limited.

Mipo Sales Limited, Nivlog Investments Limited.

Proposed Site Dimensions Consolidated Lot

Area (m2)

Perimeter (m)

3426

382

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Site Overview

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Site Characteristics The site consists of two commercial units that both function as Shoppers Drug Mart pharmacy’s. The lot of 5576 Yonge St. is significantly larger than 5568 Yonge St. as the former hosts a large parking lot on the west side of the property (Figure 6).

The commercial lot of Shoppers Drug Mart is a 1-storey retail store with its main facade on the east side facing the main road of Yonge Street (Figure 5). Its main feature is the ground-level access into the building as Yonge St. continually experiences a high degree of pedestrians traffic. The remainder of the lot is an asphalt parking lot on the west side of the building, with an access point from the south of Tolman St. The site is fairly sparse with 3m setback from its front lot line, creating a 9.2m wide pedestrian path. Correspondingly, there is a 46m clearance from the current building structure to its rear lot line, allowing for a proposed development.

Figure 5 - Commercial building at 5576 Yonge Street Source: Joanna Oon

Figure 6 - Parking lot at 5576 Yonge Street Source: Joanna Oon

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Constraints • The site for MOON Condo development proposal falls under the Former City of North York By-Law No.762 with designation of C1 (General Commercial Zones), thus a Zoning ByLaw Amendment would be required to increase height and density of the development • MOON Condos must abide by Toronto Tall Building Guidelines.

• Contaminated Site Assessment and additional articles may be required, increasing the development cost.

• The proposed height limit is strategized to encourage intensification along Yonge Street and within the vicinity of public transit. However, besides the goal of achieving optimum development, the building heights must also reflect stable residential areas within the neighborhood, appropriate transition height between commercial and residential, and most importantly to achieve a comfortable human scale and sense of spatial enclosure along the primary pedestrian streets in the center. In the case for our proposed lot, it would be the east facade along Yonge St.

Site Context Surrounding the site of the proposed development are a variety of land uses. Along the N-S stretch of Yonge St, the properties are dedicated for Mixed-Use development, which includes the proposed lots.

Therefore, Properties towards the north, south and east of the proposed lots are mixed-use buildings, where as the west side west side is residential land use (As seen in Figure 8).

Figure 7 - Land Use Map Source: City of Toronto Open Data (Map 16)

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Site Overview

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The trend to construct high-rise towers with mixed-uses along the Yonge St corridor and specifically in close proximity to our site is clearly depicted in the urban fabric of the built form (Figure 9 + 10). Considering this ongoing trend, and the adjecency to Finch Station, we believe a development like MOON Condos is wholly relevant.

Figure 8 - Ariel perspective showing the built form of the Yonge St. Corridor Source: Google Maps

Figure 10 - Ariel perspective of Yonge St. + Finch Ave W. showing surrounding building heights Source: Google Maps

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Site Context North - To the north of the proposed lot, the parcel is of mixed-use designation. It currently consists of 5 single-storey commercial properties serving retail uses at ground level. These retail stores consist of: restaurants, cafes, karaoke and beauty salons. Having similar lot setbacks, facade character and height allocations as our proposed lot. There is also a bigger area of land allocated as a parking lot next to these properties. It is connected to the parking lot to 5576 Yonge St and has access points from both north and south side.

Figure 11 - Property to the North of Proposed Development Source: Joanna Oon

West - To the west of the proposed lot is a residential high-rise, the Sonata Building on 7 Lorraine Dr, with 26 storeys and 303 condo units, built in 2013. The apartment building has an underground parking entry from the south, its main entrance on the west side, and a few ground level retail on the north side. It is not a mixed use building as the land use designation along Finch Ave W. is dedicated for mixed use.

Figure 12 - Property to the West of Proposed Development Source: Joanna Oon

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Site Overview

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East - Across Yonge St, on the east side of the proposed lot, under the designation of mixed-use, theres a gas station, Olive Square and a 2-storey commercial property with lane-way setbacks along the residential high-rise building (Princess Place on 20-22 Olive Ave). The high-rise have 4 buildings under Princess Place with 26-storeys of 289 units and three other 19-storeys with 213 units.

Figure 13 - Property to the East of Proposed Development Source: Joanna Oon

South - South of the proposed lot, are 2 twin high-rises (Pulse Condos on 5500 Yonge St) with 26-storeys and ground level retail with similar setbacks as the proposed lot current structure. Residential access is from the west facade, with a total of 250 condos, completed in 2008. Another adjacent high-rise apartment building (Symphony Square Condos on 23 Lorraine Dr) is 21-storeys and has 318 residential units with underground parking. With 1-BR, 2-BR,3-BR residential units ranging from 700sf to 1200sf.

Figure 14 - Property to the South of Proposed Development Source: Joanna Oon

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Transportation Network Access to the site is a pronounced hallmark of MOON Condos. The parcel of land is within North York Ward 18: Willowdale. It is located one block south of the major intersection Yonge St and Finch Ave W, and is situated 500 meters south of TTC’s Finch Station. Thus, the nearby TTC station and regular bus routes along Yonge St and Finch Ave W, characterize this development as a gateway mobility hub, enabling a high degree of mobility for new residents. Additionally, located just 3km South of the site via Yonge St. is Highway 401, Canada’s most prominent highway.

Figure 15 - Transit Corridors Source: City of Toronto Open Data (Map 4)

Figure 16 - Downtown Core Access Source: Google Maps

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Site Overview

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Community Services + Amenities Located 200m from the proposed lot, there are plenty of Health care amenities, public schools, places of worship, childcare center, academy centers for newcomers, recreational centers, Finch Hydro Corridor Bike Path Ride and multicultural ethnic amenities such as beauty stores, restaurants and so on. The neighborhood has tremendous amount to offer to residents and thus a proposal within this site will definitely attract residents with its unlimited amenities to assimilate themselves within the neighborhood.

In terms of community engagement and the stimulus of activity, within close proximity of the site are an array of sociocultural amenities. Located a short twenty-minute walk southward of the site is the North York Civic Centre. The multi-faceted facility includes the Douglas Snow Aquatic Centre and the North York Central Library. The adjacent open space in front of the civic centre is the Mel Lastman Square that hosts an amphitheater, wedding pavilions, a garden, and a reflecting pool which doubles as a skating rink in the wintertime (Figure 24). In addition, the Ford Centre for the Performing Arts, the George Weston Recital Hall, and the Studio Theatre enclose the central public space enriching the socio-culture of the community.

Similarly, a fifteen minute walk in the south-east direction is the Mitchell Field Community Centre located at 89 Church Avenue and is home to an ice rink, pool, gymnasium and community meeting rooms.

Figure 17 - North York Civic Centre Complex Source: Google Earth

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03 | MARKET ANALYSIS

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Market Viability MOON Condos a supremely viable contender in the high-rise market on the premise that Yonge St. and Finch Ave W. is notable as a mjaor urban growth center. Presumably, incoming residents will love the fact that they are 5 minute walking distance from the subway, and access to public transit is universally accessible in all directs. We are also confident that prospective dwellers will enjoy the fact that they live in an environment that has a downtown ambience with its own unique character and will be certainly attractive for its the lower comparable rent prices. Both the close proximity to public transit and the lower rental rates, are proven to be a large factor in influencing demand patterns for housing, therefore MOON Condos is expects to thrive at this budding urban location.

Demographic Profile

Figure 18 Source: Neighborhood #37 Census Profile 2016

As depicted by the statistics, the Willowdale ward is increasing in overall population at a surpassing rate in comparison to Toronto. This represents the desirablity of living North of Toronto, and reflects the need for and increase in residential development. Considering that the Median Age of the neighborhood is relatively young, and certainly that the highest percentage of the population are young professionals, it warrants an increase of residential development.

Currently, there is a high degree of development taking action in the area however, to support this yearly growth, MOON Condos will ensure a competitive option in this growing market segment. We target to support the influx of dwellers in the neighborhood by providing the intensification and quality development the area yearns for.

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Site Overview Considering that the majority of families in the area are economically stable, this ward supports the type of development MOON Condos will provide. The majority of individuals living in the ward in their “working age,� warrants that the development is appropriate for its context because it will provide the option for these individuals the option to relocate if they choose.

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Figure 19 Source: Neighborhood #37 Census Profile 2016

With a low unemployement rate, a relatively high average household income rate and a very high percentage of educated individuals, this location will serve to meet the supply of housing that MOON Condos will concieve.

Figure 20 Source: Neighborhood #37 Census Profile 2016

Family sizes consistent of 2 people or 3 people dominate therefore, posing a great opportunity to supply residential units to accomodate for couples and couples with children.

Figure 21 Source: Neighborhood #37 Census Profile 2016

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Supply and Demand - Surrounding Development Land supply in proximity to the development site of MOON Condos is experiencing rapid increase of proposed applications and many sites are in the process of development. Considering the sites urban characteristics and access to transit, the neighborhood is expected to see continual intensification. The influx of developer applications at this major intersection reflects that the development industry believes this is a promising area for development to take place.

Analyzing the surronding development in progress, the trend is to develop a residential high-rises that is least 32-storeys and at least 80m in height. Considering the size of our site and the need for intensification in the neighborhood, we believe two towers at 32-storeys each, ontop of a 4-storey commercial retail podium is necessary to maximize the potential of the site and contextual considerations. This will result in a mixed-use building of 87m above ground level. Maximizing the large area of the site by implementing a two point tower, allows us to create a complex not only allows us to implement the much needed residential development for an influxing population, but it also allows for podium space to support a network of private outdoor spaces and programs to support this large new community.

Development in Progress Proposed Distance Address Use From Site (m) 15 Holmes Ave Residential 450 5400 Yonge St 5350 Yonge St 5799-5915 Yonge St 5959 Yonge St

7 Lorraine Dr 5500 Yonge St 23 Lorraine Dr 20 Olive Ave 23 Olive Ave

Units Storeys

FSI Height (m)

Pre-Construction

358

32

4.99

88.5

Mixed-Use Residential 2 Mixed-Use

650 750 900

Pre-Construction Pre-Construction Pre-Construction

324 385 810

32 30 36, 34

8.02 4.99 1.92

106 92 116, 110

4 Mixed-Use

1100

Pre-Construction

1542

43, 31, 29, 35

5.92

129, 94, 88, 77

Existing Residential High-Rise Address

Status

Distance From Site (m)

Land Use

Adjacent West

Residential

Adjacent South Adjacent South West Adjacent North Adjacent North

Mixed-Use Residential Mixed-Use Mixed-Use

Figure 22 Source: Development Application Center

Units Storeys Height (m) 303

26

80

250 318 289 213

26 21 26 19

80 65 80 59

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Site Overview

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Site Benefits and Challenges Benefits • • • • • • • •

Close proximity to TTC and major transit routes Site is accessible by the existing road and laneways Rear access to laneway Many development applications have been submitted and approved in close proximity All possible services and amenities are within walking distance of the site Unique character, shops and dining options all within walking distance Many outdoor urban environments are located within walking distance Walkable community

Challenges • Negotiation with Shoppers Drug Mart for consolidation • Parking lot aquisition • Ensuring minimal shadow impact of the two towers Statistical Breakdown of Condo Sales in Willowdale

Condo sales analytics give us insight on the condo market and guides our consideration when designing the unit types. It is clearly evident that the condo market it continuing to increase its stock value.

Based on the stats, the trends show that the most valuable unit type is a 2 bedroom plus den option.

In comparison to a 3 bedroom, a 2 bedroom plus den seems to be a much more viable and desirable option, providing the flexibility tenants want.

Figure 23 Source: condos.ca

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Target Market The target market of MOON Condos will be geared towards young professionals between the ages of 25-35 whom are looking to start a family. The new generation of young adults seek to live, work and play in close proximity, and the location of MOON Condos validates and will deliver on this desire. Seeing that the majority of people in the area prefer to purchase rather than rent, the majority of our units will be for purchase sale. Considering that this may be a destination that young couples by their first home, or have their first child, the design of the building will support family lifestyle and will be sensitive to the needs of these individuals through the material choices, programmatic spaces, and amenities.

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Project Data Sheet

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04 | Policy + GuidelinesSite Overview

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Provincial Regulations Ontario Planning Act The Planning Act is a provincial legislation that sets out the ground rules for land use planning in Ontario.

It describes how land uses may be controlled, and who may control them. The Act contains the roles of the province, the roles of the municipalities and The Provincial Policy Statement. The Act is legislation passed by your elected provincial representatives to ensure that land use policies abide to the highest conformity which is the Ontario Planning Act. Roles of the province are such as issuing provincial policy statements, preparing provincial plans such as the Greenbelt Plan and Growth Plan for the Greater Golden Horseshoe (2006), promote provincial interest, provide a one-window planning service to municipalities, give advice to municipalities and administer local planning controls and give approval where required. Roles for municipalities on the other hand are to make local planning decisions that will determine future of communities and to prepare planning documents such as official plan and zoning by-laws.

Provincial Policy Statement, 2014 (PPS) The PPS outlines 5 parts of the statement in ensuring that development proposals conform within the guidelines of the broader scale city planning. Part 5 is particular with the providing guidelines about building design. Section 5.1 focuses on Building Strong Communities in terms of land use, employment areas, housing, recreational areas, public infrastructure and so on. Section 5.2 outlines proper use and management of resources and waste on the site. Section 5.3 highlights public health and safety and Section 5.4 suggests ways of implementation and interpretation of the PPS. Finally, Section 5.5 suggests ways on how the public can be involved in voicing their opinions on development proposals within their communities.

Greenbelt / ORM / Growth Plan / Big Move These are provincial plans that challenges and ensures that the protection and effective use of finite source in proposing new developments are built on the Provincial Policy Statement to establish a unique land use planning framework for the Greater Golden Horseshoe (GGH) that supports the achievement of complete communities, a thriving economy, a clean and healthy environment, and social equity.

By implementing these provincial plans, the Province recognizes the importance of consulting with First Nations and MĂŠtis communities on planning matters that may affect their rights and interests. Provincial plans must be implemented in a manner that is consistent with the recognition and affirmation of existing Aboriginal and treaty rights under section 35 of the Constitution Act, 1982.

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Municipal Regulations City of Toronto Official Plan The official plan sets out the municipality’s general planning goals and policies that will guide future land use. It lets the public know about the planning for the future, how it should be coordinated based on a established framework, settles any kind of conflict of interest. When considering a plan, the authority must have at least one public meeting, given time to review all the info then provide a proposed plan made available to all public. The official plan allows for amendment which is a formal document to change the municipality’s official plan. If amendments is requested, the Council will consider it. It the Council disapproves, the applicant has 30 days to bring it to the (Ontario Municipality Board) OMB and the OMB’s decision is final.

North York Centre Secondary Plan The North York Centre is an important focus of transit-based employment and residential growth. The North York Centre is one of the four Centres that have an important role in achieving the strategic growth objectives of the Official Plan. While redevelopment is encouraged in the North York Centre, existing Neighbourhoods outside the North York Centre will be protected, preserved and enhanced.

Land Division These are official municipal documents used when dividing a piece of land into 2 or more parcels for sale.

It protects the land-use suitability, make sure it conforms to official plans and zoning by laws, and ensure local community is protected from any strain on facilities, services and finances.

Former City of North York By-Law No.762 The zoning by-laws of each site sets out rules and regulations that control development as it occurs. The Planning Act also gives planning boards in northern Ontario the power to adopt official plans and pass zoning by-laws for unorganized territory within their planning areas ensures planning decisions and planning documents are consistent with the Provincial Policy Statement and conform or do not conflict with provincial plans.

The current site of 5568-5576 Yonge St. falls under the Former City of North York By-Law No.762 with designation of C1 (General Commercial Zones) Toronto Tall Buildings Guidelines The Tall Building Design Guidelines do not determine where tall buildings are permitted. Rather, the Guidelines assist with the implementation of Official Plan policy to help ensure that tall buildings, where they are permitted, “fit within their context and minimize their local impacts.

Building Permits Building permits ensures that development complies with the Ontario Building Code, Zoning By-Laws and Other applicable legislations (ie. The Environmental Protection Act). A building permit is required befor construction any new development.

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04 | F I N A N C I A L F E A S I B I L I T Y

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Market Conditions A financial feasibility study is conducted to understand the profitability of the proposed development.

The feasibility study was completed by creating a number of assumptions and then creating a financial pro forma for the development using these assumptions. These assumptions are precedented according to the industry’s market, target demographics and neighboring examples to create a fair combination of market research and industry standards. The follow section provides a description of the assumptions and how they were calculated. The entire assumptions page for the base case scenario can be found in the appendix.

The pro forma showcases a 10 year period with construction beginning in the second year and finishing in the third year. Condo pre sales begin in the first year of construction and finish one year after completion of the building.

Efficiency Rate The efficiency rate assumption is 90% as the given location shows signs of growth in population and of vacancy demands. Therefore, 90% will be acting as a target to reach through the successful design of the residential units with its amenities, units variance, hallways, elevators, fire stairs and lobby. Similarly, the commercial element of this mixed-use building will contribute successfully to the efficiency rate. This gives us a total of 97 635.6 square foot of saleable floor area.

Building Parcel Size FSI GSF Efficiency RSF

36,877 5 109,632 90% 98,669

Development Cost Land Cost Building Construction Cost Parking Construction Cost Hard Costs Soft Costs Development Charges - 1BR Development Charges - 2BR+more Contingency Total before Financing

3,466,438 141,011,787 14,100,000 155,111,787 46,533,536 5,285,462 26,426,144 7,755,589 244,578,956

Financing Equity Construction Loan Construction Interest Permanent Loan Loan Payment Total Land and Development Costs

73,373,687 171,205,270 9,416,290 180,621,559 (12,432,940) 253,995,246

Building Sale

1 Bedroom 2 Bedroom 2 Bedroom + Den

Number of Units 182 463 60

SF per unit 573.7 818 1164

Total SF 104,413 378,734 69,840

Price per Unit $500,000 $700,000 $800,000

Reven

24 $91,000,0

$324,100,0 $48,000,0

Construction Cost

Site Overview

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Land Acquisition Land cost in Toronto is $94/sf according to the GA High Rise Land Insight Report. Using this report as a fair comparison for an assumption as the typical building typologies along Yonge and Finch to be high rises.

Land Cost = $94/sf x 36877 sf = $3,466,438

Demolition Cost Considering the existing site of Shoppers Drug Mart would need to be replaced, a demolition cost neds to be taken into account.

Demolition Cost - $10/sf x 36877 sf = $368,770

Hard Cost

$255/sq ft

Hard costs were determined through the Altus Guide 2019. The hard costs given for the GTA

for a residential building of 13 to 29 stories ranged from 190-255. The hard costs for a commercial

building of 5 to 30 stories ranged from 190 - 265. Given that the location of the site is in the cen

tre of downtown Toronto and averaging both commercial and residential, the hard cost assump

tion used is $255 per square foot.

Soft Cost

$76.5/sq ft

The developments standard practice for soft costs is to use 30% of the hard costs. The soft costs

include the legal fees, architectural and engineering fees, marketing and advertising. Taking the

30% of 255, the cost per square foot is $76.5 per square foot.

Cap Rates

Residential - 5%

Taken from the Canadian Cap Rates & Investment Insights, a cap rate of 6% was determined for

the retail portion of the project.

Commercial - 6% Taken from the Colliers International capitalization rates report for the commercial component.

Development Charges

Development Charges depend on the unit type. Charges for 1 Bedroom and Bachelor units are

$29,041 and $50,528 for 2 and 2+den bedroom units according to the Toronto Residential

Development Charge Rates. Which cost a total of $34,739,424 for development charges.

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Vacancy Rate

Residential - 5%

The residential vacancy rate was taken from an average of the vacancy rates of the buildings used

for comparables.

Commercial - 5%

The vacancy rate of 5% was selected to reflect the character of the neighbourhood. The majority

of the retail spaces in the area are currently leased or owned, providing a strong market in the area.

Contingency

Contingency is determined as a percentage of the hard costs. It is typically 5% of the hard costs,

and what was used in this pro forma analysis.

Financing

Cost to Loan

A percentage of 75% will be used by taking the average of the industry standard that ranges

from 70% to 80%.

Construction Interest Rate Taking the prime interest rate of 3% and further adding 2.45% in order to reflect a lower risk of construction loans, the construction loan rate was determined as 5.45%.

Building Parameters Equity Parcel Size (sf) 36,877

The amount necessary to be secured into the project to receive the remaining cost as a loan Floor Space Index 4.7 Building fromEfficiency the bank. This is taken to be 25%.

90% Gross Floor Area (sf)

Floor Area (sf) CostSalable and Financing Variables

Development

Demolition Cost Land Cost per sf Hard Costs per GSF Soft Costs (30% of HC) Contingency (per unit) Development Charges - 1BR Development Charges - 2BR + more Parking Cost Parking Ratio

109632 98,669

$10 $94 $255.00 $76.50 5.00% $29,041 $50,528 $20,000 1.2

Financing

Construction Loan Loan to Cost Ratio Construction Interest Rate

70% 5.5%

Permanent Loan Loan to Value Ratio Permanent Loan Interest Rate Permanent Loan Term (yrs)

80% 4.7% 25

Residential Operation

Rent per RSF (/sf/yr) Rent Escalation (/yr) Vacancy Factor (/yr)

$38.40 6.0% 5.0%

26

Parcel Size FSI GSF Efficiency RSF

Cost and Financing calculations

Site Overview

36,877 5 109,632 90% 98,669

Development Cost Land Cost Building Construction Cost Parking Construction Cost Hard Costs Soft Costs Development Charges - 1BR Development Charges - 2BR+more Contingency Total before Financing

3,466,438 141,011,787 14,100,000 155,111,787 46,533,536 5,285,462 26,426,144 7,755,589 244,578,956

Financing Equity Construction Loan Construction Interest Permanent Loan Loan Payment Total Land and Development Costs

73,373,687 171,205,270 9,416,290 180,621,559 (12,432,940) 253,995,246

April 16, 2019 | MOON Condos

Building Sale Revenue Number SF per Total Price

Residential Price/Unit - $38.40/sf Units SF per Unit

The average rental cost in Toronto is $38.40/sf, howeverofthis location is unit more expensive than 1 Bedroom 182 573.7 104,413 $500,000

the Toronto average due to the high demand of this area being close to the downtown core and 2 Bedroom 463 market818

right on the terminal of the Yonge subway line. Based on current trends from378,734 condos.ca,$700,000

2 Bedroom + Den 60 about 1164 $800,000

caprent.ca, and rentseeker.ca, indicating averages that 1-BR are $500,000, 2-BR69,840 for $700,000 Gross Area for $800,000.

705 552,987

andFloor 2-BR+den Total Saleable Area 634.5 497,689

Commercial Rent - $26.00/sq ft

Taken from TREB Commercial Market Figures, the average rent for commercial properties was

$20.79 as of April 2018. Given that this is a full year later, and the prime location of the retail

properties, the retail rent used was $26.00.

Rent Escalation

Rent escalation is set at 3% per year based on neighboring examples.

Property Taxes

Property Taxes are taken at $100,000 based on previous examples rounded for the simplicity

of calculation.

Property Taxes Escalation

Property Taxes are expected to increase at 2% per year.

Cap Ex

2% or $28.00/sq ft

Taken from TREB Commercial Market Figures, the average rent for office properties was

$14.65 as of April 2018. CBRE Q4 2018 reflected a larger number of $30.00. An average was

taken between the two, with inflation due to the fact that these are student spaces rather

than offices in a high demand area.

27

ze

y

Permanent Loan Permanent Loan Loan to Value Ratio Loan to Value Ratio Permanent Loan Interest Rate Building Permanent Loan Interest Rate Permanent Term (yrs) Parcel Size Loan Permanent Loan Term (yrs)

Revenue Variables FSI

GSF Residential Residential Operation Operation Efficiency Rent per RSF Rent per RSF RSF Rent Escalation

80% 80% 4.7% 4.7% 25 36,877 25

36,877 5 5 109,632 109,632 90% $38.40 /sf/yr 90% /sf/yr 98,669 $38.40 98,669 6.0% /yr

Rent Escalation Vacancy Factor Vacancy Factor ment CostDevelopment Cost Operating Expenses Operating t Land Cost Expenses Operating Expenses Cost Escalation Construction Building Cost Construction Operating Expenses Escalation Property Tax Construction Parking Cost Construction Cost Property Tax Property Tax Escalation ts Hard Costs Property Tax Escalation CapEx/Reserves s Soft Costs CapEx/Reserves

6.0% /yr 5.0% /yr 5.0% /yr $7.00 /sf/yr /sf/yr 3,466,438 $7.00 3,466,438 2.0% 141,011,787 141,011,787 2.0% $100,00014,100,000 14,100,000 $100,000 2.0% 155,111,787 155,111,787 2.0% 2.0% 46,533,536 46,533,536 2.0%

Rent Escalation Rent Escalation Vacancy Factor g Financing Vacancy Factor Operating Expenses Equity Operating Expenses Operating Expenses Escalation tion Loan Construction Loan Operating Expenses Escalation Property TaxInterest tion Interest Construction Property Tax nt Loan Permanent Loan Property Tax Escalation Property Tax Escalation ment Loan Payment CapEx/Reserves CapEx/Reserves

6.0% /yr 6.0% /yr 5.0% /yr 5.0% /yr $7.00 /sf/yr 73,373,687 $7.0073,373,687 /sf/yr 2.0% 171,205,270 171,205,270 2.0% $100,000 9,416,290 9,416,290 $100,000 180,621,559 180,621,559 2.0% 2.0% (12,432,940) (12,432,940) 2.0% 2.0%

ment Charges Development - 1BR Charges - 1BR ment Charges Development - 2BR+more Charges - 2BR+more Commercial Commercial Operation Operation ncy Contingency Rent per RSF Rent before per RSFFinancing ore Financing Total

nd and Development Total Land and CostsDevelopment Costs

Sale

Revenue Calculations Building Sale

om 1 Bedroom om 2 Bedroom om + Den2 Bedroom + Den tial Residential rcial Commercial leable Area Total Saleable Area

April 16, 2019 | MOON Condos

(changes for commercial and residential) (changes for commercial and residential)

5,285,462 5,285,462 26,426,144 26,426,144 7,755,589 7,755,589 $26.00 /sf/yr /sf/yr 244,578,956 $26.00 244,578,956

253,995,246

253,995,246

Number of Units 182 463 60 705

SFNumber per unit of Units 573.7 182 818 463 1164 60 705

634.5

634.5

SFTotal per unit SF 104,413 573.7 378,734 818 69,840 1164 552,987 73,840 497,689

Total Price per Unit SF $500,000 104,413 $700,000 378,734 $800,000 69,840 552,987 $1,919,840.00 73,840 497,689

Revenues Price per Unit $91,000,000 $500,000 $324,100,000 $700,000 $48,000,000 $800,000 $463,100,000 $1,919,840.00 $1,919,840.00 $416,790,000

Reve

$91,000 $324,100 $48,000 $463,100 $1,919,84 $416,790

erformance Condo Performance Operating Expenses Revenue $463,100,000 $463,100,000 Total Cost This incorporates the operating expenses of the entire building amounting to $7/sf/yr. This st 248,709,784 248,709,784 Profit number is multiplied by the$214,390,216 GSF of the building to obtain operation of the building including $214,390,216 Profit/Cost HVAC, maintenance, hydro, use 86.20% of public spaces etc. Operation Pro Forma - Residential + ost 86.20% Commercial. alue Profit/Value 46.29% 46.29%

ue Residual Land Value Residual Operation Pro Forma - Residential + Commercial er Return Rate Developer Return Rate 12% 12% er Value Developer Value $463,100,000 $463,100,000 The operation pro forma shows the244,578,956 profit made each year from renting out the residential and commercial er Costs Developer Costs 244,578,956 spaces.

The operation revenue and expenses are calculated er Return Rate Developer Return Rate $55,572,000 $55,572,000 on a yearly basis including escalation prices over 11 years. The Net Operating Income shows $162,949,044 a trend of being higher than the expenses in every year ue Land Value $162,949,044

which proves to be a good investment as the income over these years are enough to cover operating expenses as well as to produce a profit, based on this preliminary assessment.

28

07 | Conclusion + Recommedation Site Overview

April 16, 2019 | MOON Condos

The introduction of a 29 storey mixed-use hirise tower composed of ground floor commercial retail with residential units above is the desirable form of development that supports intensificaiton of a transit oriented neighborhood. The proposal matches the market conditions of the area and will be able to support the influx of people moving in the neighborhood. The site will serve as an urban pulse, providing a great variety of amenities and services, which comprise for a great location for a new residential tower.

The 350 units consistent of 1-BR, 2-BR and 2-BR+den units will support a growing need for bigger units to accommodate for bigger families and MOON condos will be designed to accommodate this demand. The residential component is also designed to have each floor plates offsetting each other to create balconies for a better living condition and in house amenities will support the livelyhood of prospective tenants and the community at large.

The feasibility analysis has captured the potential of MOON Condos to be financially viable and a desirable building typology for the target market segment and it is recommended that the development proceed. The proposal provides the required contextual information necessary to initiate and continue the development process. Overall, considering the discoveries made from market research, site plan analysis and level of design quality, MOON Condos will immediately enhance the neighborhood and have a positive impact of the demographic.

29

APPENDIX A : ASSUMPTIONS

Building Parameters

Parcel Size (sf) Floor Space Index Building Efficiency Gross Floor Area (sf) Salable Floor Area (sf)

Development

Demolition Cost Land Cost per sf Hard Costs per GSF Soft Costs (30% of HC) Contingency (per unit) Development Charges - 1BR Development Charges - 2BR + more Parking Cost Parking Ratio

April 16, 2019 | MOON Condos

36,877 4.7 90% 109632 98,669

$10 $94 $255.00 $76.50 5.00% $29,041 $50,528 $20,000 1.2

Financing

Construction Loan Loan to Cost Ratio Construction Interest Rate

70% 5.5%

Permanent Loan Loan to Value Ratio Permanent Loan Interest Rate Permanent Loan Term (yrs)

80% 4.7% 25

Residential Operation

Rent per RSF (/sf/yr) Rent Escalation (/yr) Vacancy Factor (/yr) Operating Expenses (/sf/yr) Operating Expenses Escalation Property Tax Property Tax Escalation CapEx/Reserves

Commercial Operation

Rent per RSF (/sf/yr) Rent Escalation (/yr) Vacancy Factor (/yr) Operating Expenses (/sf/yr) Operating Expenses Escalation Property Tax Property Tax Escalation CapEx/Reserves Valuation Capitalization Rate Discount Rate

$38.40 6.0% 5.0% $7.00 2.0% $100,000 2.0% 2.0%

$26.00 6.0% 5.0% $7.00 2.0% $100,000 2.0% 2.0%

5.0% 10.0%

30

ze

ze

y

y

Site Overview APPENDIX B : DEVELOPMENT + FINANCING Building Parcel Size Building FSI Parcel GSF Size FSI Efficiency GSF RSF Efficiency RSF

ment CostDevelopment Cost t Land Cost Cost ment CostDevelopment Construction Building Cost t Land CostConstruction Cost Construction Parking CostConstruction ConstructionCost Cost Construction Building Cost ts Hard Construction Parking CostCosts Construction Cost Hard Costs sts Soft Costs s Soft Costs ment Charges Development - 1BR Charges - 1BR ment Charges Development - -1BR Charges - 1BR ment Charges Development 2BR+more Charges - 2BR+more ment Charges Development 2BR+more Charges 2BR+more ncy Contingency ncy Contingency ore Financing Total before Financing

ore Financing Total before Financing

gg

Financing

Sale Sale

Building Sale

om

1 Bedroom

Financing Equity Equity tion LoanConstruction ConstructionLoan Loan tion Loan tion Interest ConstructionInterest Interest tion Interest Construction nt Loan Loan Permanent PermanentLoan Loan ment Loan ment LoanPayment Payment nd and Development Total Land Costs Development Costs nd and Development Total Landand and Costs Development Costs

Building Sale

om Bedroom om 21 Bedroom om Bedroom+ Den om + Den22 Bedroom om 2 Bedroom + Den tial + DenResidential tial Residential rcial Commercial Total Saleable Area leable Area Total Saleable Area rcial Commercial

36,877 5 36,877 109,632 5 90% 109,632 98,669 90% 98,669

36,877 5 36,877 109,632 5 90% 109,63298,669 90% 98,669

3,466,438 3,466,438 141,011,787 141,011,787 3,466,438 3,466,438 14,100,000 14,100,000 141,011,787 141,011,787 155,111,787 14,100,000 155,111,787 14,100,000 155,111,787 46,533,536 155,111,787 46,533,536 46,533,536 46,533,536 5,285,462 5,285,462 5,285,462 26,426,144 5,285,462 26,426,144 26,426,144 7,755,589 26,426,144 7,755,589 7,755,589 7,755,589 244,578,956 244,578,956 244,578,956

244,578,956

73,373,687 73,373,687 73,373,687 73,373,687 171,205,270 171,205,270 171,205,270 171,205,270 9,416,290 9,416,290 9,416,290 9,416,290 180,621,559 180,621,559 180,621,559 180,621,559 (12,432,940) (12,432,940)(12,432,940) (12,432,940) 253,995,246 253,995,246 253,995,246 253,995,246

Number SFNumber per SFTotal per Total Price Revenues Price Reve Number SFNumber per SFTotal per Total Price Revenues Price of Units unit of Units unit SF per Unit SF per Unit of Units of unit Units unit SF per Unit SF per Unit 182 573.7 182 104,413 573.7 $500,000 104,413 $91,000,000 $500,000 $91,000 573.7182 573.7 $700,000 104,413 $500,000 463 182 818 463 378,734 818104,413 378,734 $500,000 $324,100,000 $700,000$91,000,000 $324,100 81846369,840 818 $800,000 378,734 $324,100,000 $700,000 60 463 1164 60 1164378,734 69,840 $700,000 $48,000,000 $800,000 $48,000 1164 60 1164 552,987 $800,000 69,840 $48,000,000 $800,000 705 60 705 552,987 69,840 $463,100,000 $463,100 705 70573,840552,987 $463,100,000 $1,919,840.00 73,840 552,987 $1,919,840.00 $1,919,840.00 $1,919,84 634.5 497,689 634.5 634.5 497,689 73,840 497,689 $416,790,000 $416,790 $1,919,840.00 73,840 $1,919,840.00 $1,919,840.00

CondoPerformance Performance erformance Condo Revenue Revenue TotalCost Cost st Total Profit Profit ost Profit/Cost Profit/Cost alue Profit/Value Profit/Value

$463,100,000 248,709,784 $214,390,216 86.20% 46.29%

$463,100,000 $463,100,000 248,709,784 248,709,784 $214,390,216 $214,390,216 86.20%86.20% 46.29%46.29%

ue Residual Land LandValue ValueResidual Residual er Return Rate Developer Return Rate Developer Return Rate er Value Developer Value Developer Value er Costs Developer Costs DeveloperReturn Costs Rate er Return Rate Developer Developer Return Rate ue Land Value

12% $463,100,000 244,578,956 $55,572,000 $162,949,044

12% 12% $463,100,000 $463,100,000 244,578,956 244,578,956 $55,572,000 $55,572,000 $162,949,044

Land Value

April 16, 2019 | MOON Condos

$162,949,044

31

APPENDIX C : OPERATION PRO FORMA 0 $73,373,687 $244,578,956

Equity Development Costs Operation Revenues Potential Gross Revenue Vacancy Effective Gross Revenue Expenses Building Operation Expenses Property Taxes CapEx Total Expenses

Operation

April 16, 2019 | MOON Condos

1

2

3

4

$416,790,000 20,839,500 395,950,500

$441,797,400 22,089,870 419,707,530

$468,305,244 23,415,262 444,889,982

$496,403,559 24,820,178 471,583,381

767,424 100,000 7,919,010 8,786,434

782,772 102,000 8,394,151 9,278,923

798,428 104,040 8,897,800 9,800,268

814,396 106,121 9,431,668 10,352,185

($73,373,687)

387,164,066 (12,432,940) $374,731,126

410,428,607 (12,432,940) $397,995,667

435,089,714 (12,432,940) $422,656,774

461,231,196 (12,432,940) $448,798,256

($73,373,687) ($244,578,956)

$374,731,126 $387,164,066

$397,995,667 $410,428,607

$422,656,774 $435,089,714

$448,798,256 $461,231,196

Project Performance Leveraged 5 6 IRR NPV Equity Unleveraged Costs Development IRR NPV $526,187,772 $557,759,038$ Operation 26,309,389 27,887,952 Revenues 499,878,384 Potential Gross Revenue 529,871,087 Vacancy Effective Gross Revenue 830,684 847,298 110,408 Expenses 108,243 10,597,422 Building9,997,568 Operation Expenses 10,936,495 11,555,128 Property Taxes CapEx 488,941,888 518,315,959 Total Expenses (12,432,940) (12,432,940) $476,508,948 Net Operating Income $505,883,019 Debt Service Before Tax Cash Flow $476,508,948 $505,883,019 $488,941,888 $518,315,959 Building Sale BTCF Leveraged BTCF Unleveraged

7 8 16.7% Operation $85,627,092.650 1 $73,373,687 $244,578,956 7.7% 21,406,773.16 $591,224,581 $626,698,056 29,561,229 31,334,903 561,663,352 595,363,153 $416,790,000 20,839,500 395,950,500 864,244 881,529 112,616 114,869 11,233,267 11,907,263 767,424 12,210,127 12,903,661 100,000 7,919,010 549,453,224 582,459,492 8,786,434 (12,432,940) (12,432,940) $537,020,285 $570,026,553 387,164,066 (12,432,940) ($73,373,687) $374,731,126 $537,020,285 $570,026,553 $549,453,224 $582,459,492 ($73,373,687) $374,731,126 ($244,578,956) $387,164,066

9

10

11

2

3

4

Project Performance Leveraged IRR NPV

16.7% $85,627,092.65

Net Operating Income Debt Service Before Tax Cash Flow Building Sale BTCF Leveraged BTCF Unleveraged

Unleveraged IRR NPV

$

7.7% 21,406,773.16

$664,299,939 33,214,997 631,084,942 $441,797,400 22,089,870 419,707,530 899,160 117,166 12,621,699 782,772 13,638,024 102,000 8,394,151 617,446,918 9,278,923 (12,432,940) $605,013,978 410,428,607 (12,432,940) $397,995,667 $605,013,978 $617,446,918 $397,995,667 $410,428,607

$704,157,935 $746,407,411 35,207,897 37,320,371 668,950,039 709,087,041 $468,305,244 $496,403,559 23,415,262 24,820,178 444,889,982 471,583,381 917,143 935,486 119,509 121,899 13,379,001 14,181,741 798,428 814,396 14,415,653 15,239,126 104,040 106,121 8,897,800 9,431,668 654,534,386 693,847,915 9,800,268 10,352,185 (12,432,940) (12,432,940) $642,101,446 $681,414,975 435,089,714 461,231,196 (12,432,940) (12,432,940) $422,656,774 $448,798,256 $642,101,446 $ 681,414,975 $654,534,386 $693,847,915 $422,656,774 $448,798,256 $435,089,714 $461,231,196

32