Hines joins Northcrest to JV on Downsview Hangar District development

Steve McLeanBusiness Writer

Hines has entered a partnership with Northcrest Developments to develop a portion of the 102-acre The Hangar District, the first proposed neighbourhood at Toronto’s massive Downsview Airport Lands redevelopment.

The proposed development, currently being reviewed by the City of Toronto, envisions: nearly 3,000 new homes, including rental apartments and affordable options; more than 7,000 new jobs located in retrofitted hangar buildings and new commercial and office spaces; and amenities including shops, parks, day-care centres and public spaces.

The partnership involves a 40-plus acre portion of The Hangar District.

“It was always our intention to bring on partners,” Northcrest chief executive officer Derek Goring told RENX. 

“So when we started the process to find our first partner, we wanted to get the project far enough along so that we could give a clear vision and understanding of what we wanted, both for the project and from our partners.” 

Northcrest approached a short list of potential partners more than a year ago. It elected to go with Hines and the two companies have spent recent months negotiating a final agreement.

Terms of the partnership

“It's a complicated deal and we can't share the specifics of it, but we are joint owners of this phase of the project,” Goring told RENX. 

Toronto-based Northcrest is a subsidiary of PSP Investments, one of Canada’s largest pension investment managers, which had $243.7 billion of net assets under management as of March 31, 2023. 

Ottawa-headquartered PSP purchased the 370-acre Downsview Airport Lands site for $825 million from Bombardier in 2018 and created Northcrest that same year to shape the vision for its future.

“We're honoured that PSP and Northcrest have selected us as their long-term partner for the first phase here,” Hines senior managing director Syl Apps told RENX. “It allows us to bring our global mixed-use and place-making expertise to the project.”

Northcrest will retain responsibility as the lead developer of Downsview Airport Lands through all phases of one of the largest mixed-use development projects in North America, which is expected to take 30 years to complete.

“We very specifically brought on Hines for their expertise and experience and, frankly, the horsepower that they have, the global experience they have and the leadership that they've shown,” Goring explained. “We very much want to leverage that.

"So they will be leading the vertical development of the first phase and we will be very much joined at the hip with them as they go through that process.”

Apps is looking forward to The Hangar District becoming a global leader from “sustainability, embodied carbon and operational carbon perspectives.”

Northcrest also plans to work with partners on future development phases since Downsview Airport Lands is such a large site, but Goring said the current focus is The Hangar District.

Hines is both global and local

Hines is a global real estate investment, development and property manager operating in 30 countries. It managed a portfolio of 790 residential, logistics, retail, office and mixed-use properties totalling more than 269 million square feet and valued at $94.6 billion as of June 30, 2023.

Since the launch of its Canadian operations in 2004, Hines has developed, acquired and/or managed more than 13 million square feet of office, retail, residential and mixed-use properties. It has more than 120 employees in offices in Toronto, Vancouver, Calgary and Edmonton.

“Hines is this very large global organization, but they've also got a really great track record in Toronto with some of the projects that they've done here and the team that we're working with is the Toronto team,” Goring said.

“From a perception perspective, some people may look at this as us bringing someone in from outside, but we look at it as a Toronto development firm that we are partnering with which happens to have global reach and global experience.”

Community consultations and approvals

Northcrest has consulted with thousands of local community members, stakeholders and Indigenous Peoples and is working with the City of Toronto on the Downsview Area Secondary Plan that will cover the overall site. 

Canada Lands Company owns an adjacent 150 acres and has also been working closely with Northcrest for the past few years. The adjacent 291-acre, Canada Lands-owned Downsview Park — which was created in 2012 and is separate from the Downsview Airport Lands — will remain and won’t be reduced in size.

The Downsview Area Secondary Plan area is generally bounded by Keele Street to the west, Wilson Heights Boulevard to the east, Sheppard Avenue to the north and Wilson Avenue and Highway 401 to the south. 

The plan will set out the long-term vision for a complete community centred on transit investment, job creation, parks, open spaces, community services and facilities to meet the needs of future residents and workers.

Goring is hopeful the plan will receive city council approval this spring.

The blueprint guiding the Downsview Framework Plan recently received the 2023 Toronto Urban Design Award in the Master Vision and Masterplan category. 

Parallel to that process, there are ongoing rezoning applications for The Hangar District that must be dealt with. A re-submission that includes tweaks resulting from community and City of Toronto feedback is expected in the next six months or so.

“One of the reasons we brought Hines on at this stage is we wanted them to be part of that process and ensure that we've got their input and buy-in before we finalize things for The Hangar District with the city and the local community,” said Goring.

“Meanwhile uses” of site will grow

Bombardier’s lease at Downsview Airport Lands expires at the end of March and Northcrest will have full access to the site in April, which will allow it to introduce more “meanwhile uses” at the site before development begins. 

Northcrest’s short-term goal is to promote activities aligned with the vision for the broader project and demonstrate what the future of the site might look like.

The idea is to draw people to the property and move it forward from its former uses as an air field, air force base and testing and manufacturing facility.

Northcrest has thus far:

• welcomed people to ride bicycles and scooters, roller-skate, use hula hoops, play pickleball and more on a runway;
• introduced lighting and art displays;
• created an artist-designed nine-hole miniature golf course; and
• hosted public skating events.

Film and television production studio

PSP and Los Angeles-based Hackman Capital Partners, a privately held real estate investment operating company and owner of studio-based equipment and production vendor The MBS Group, signed a memorandum of understanding in 2021 for a long-term ground lease and the construction of a film and television production studio campus.

The deal will see an investment of approximately $200 million and is expected to create thousands of new direct and indirect jobs.

The long-term plan envisions more than one million square feet of production and support space, with sound stages ranging from 20,000 to 80,000 square feet.

“Hopefully we'll have some more to share on that shortly,” said Goring.