Core Development hunts infill sites in and around GTA
Corey Hawtin founded Core Development Group six years ago as a subsidiary of his North York-based Mazenga Building Group to exploit infill property opportunities that don’t fit the parent company’s model. Core’s focus is on finding these properties in the Greater Toronto and Golden Horseshoe areas of Ontario and building low-, mid- and high-rise residential buildings, some with commercial elements.
“Finding sites is a challenge in a city where the infill development opportunities are becoming scarcer,” Core president Bryan Nykoliation told RENX. “We typically look for off-market opportunities, not something that’s listed. We have two full-time analysts on our team that hunt and gather, and a lot of opportunities come in through networking and relationships.”
Core is well-financed through a variety of institutional equity partners and high-net-worth investors, as well as several lenders. This has enabled the company to grow from three to 12 employees and take on more and larger projects than it would have considered in its early days.
Core Development Group’s Strategy
“We’re looking to do 10 to 15 sizable projects a year and we’ve been ramping up to that very successfully,” said Nykoliation. “We do everything from procurement of sites to fully financing the sites, from both debt and equity perspectives. We do full cash-flow and pro-forma analyses for our own accounts and, if anyone asks us to do that as a service, we’re open to doing that for outside clients and other developers.”
While Core currently outsources its construction, it has a “well-seasoned” director of construction with expertise in managing projects. Nykoliation also praises his company’s planning staff, which has been instrumental in moving projects through increasingly complex regulations and processes.
Core wants its growth to be measured and there are enough opportunities in its current markets that it isn’t rushing to expand into areas outside its current markets. Two of Core’s prominent completed developments are: Eglinton Towns, comprised of four-storey townhomes in Toronto’s Leaside neighbourhood just west of Bayview Avenue; and Relmar Gardens, comprised of semi-detached, single-family homes in Toronto’s Forest Hill Village, just west of Spadina Road and north of St. Clair Avenue.
Core Activity in Birchcliff
“We want to go into areas where we can be a change agent,” said Nykoliation, who said Core invests in and extends philanthropic efforts in the communities it builds in. “Our reputation is going to be a good one and a long one that we’d like to maintain. “When we put something in, we want to be very proud of it not just five years from now, but 25 or 30 years from now.”
Core’s latest area of interest is southwest Scarborough’s Birch Cliff neighbourhood, where it has assembled three development sites. “We saw that as a very up-and-coming area where we thought we could make a lot of difference in terms of what we develop setting a benchmark and a new standard,” said Nykoliation.
Core held six public meetings to inform people about its plans for the area and to get feedback. “I think that’s a differentiating factor in why the projects we do are well-accepted and supported by not only city staff but the community at large,” said Nykoliation.
Core's Birchcliff Projects
Birchcliff Urban Towns is a collection of 52 suites located on the southeast corner of Kingston Road and Birchcliff Avenue atop the Scarborough Bluffs just east of The Toronto Hunt golf club. The project hit its pre-construction sales target and construction is now underway, with occupancy expected in November 2020.
Core isn’t actively selling the remaining homes now, but will refocus on that activity closer to completion. Clonmore Urban Towns will feature 118 townhomes just north of Kingston Road and east of Victoria Park Avenue. The three-bedroom homes will have a similar visual aesthetic as Birchcliff Urban Towns and be priced from the upper $700,000s when they go on sale later this fall. “We feel it will be a great success based on all the learning we’ve had from Birchcliff Urban Towns,” said Nykoliation.
The Manderley is going through the planning stages and the necessary approvals are expected by the end of the year. Sales would then begin next spring. Core is proposing a 10-storey condominium with retail at grade at a site near Kingston Road and Manderley Drive.
Future Core projects and co-living
Nykoliation said a residential building of more than 20 storeys is going through the planning and approval process for a site on Burlington’s waterfront.
Core is interested in the purpose-built apartment and co-living sectors, the latter of which is relatively new to Ontario. Co-living is a form of housing where residents have individual space in a shared property.
Co-living spaces have been called a combination of apartment, college dorm, hotel and high-end rooming house. Residents generally sacrifice some private space in return for lower rents and share a kitchen, living room, bathroom and building amenities.
While there’s plenty of talk about the need for lower-cost housing, high land prices and construction costs often make providing options a difficult proposition for developers who still want to achieve a decent margin.
“Co-living provides a meaningful way of providing value to the market without sacrificing quality or undercutting today’s costs to build it,” said Nykoliation. “It’s new to Ontario, relative to the States, but it’s a proven model. With millennials today, and the way people are socializing and co-habiting, this is the new way that allows people to come in in an affordable way that allows development.”