Crombie REIT Considering "Monetization" Of Vancouver Safeway JV With Westbank

Crombie Real Estate Investment Trust (REIT), based in Nova Scotia, is contemplating the "monetization" of its joint venture with Westbank Corp. concerning the redevelopment of the Safeway site at 1780 East Broadway in Vancouver. This site is strategically located adjacent to the Commercial-Broadway SkyTrain Station, one of the city's busiest transit hubs.

Over the past five years, Crombie REIT and Vancouver-based developer Westbank have collaborated on plans to transform the existing Safeway and its surrounding surface parking lot into a mixed-use development featuring three residential towers. The project has undergone several revisions, with the most recent proposal submitted in June 2024. This latest plan includes towers of 36, 37, and 43 storeys, comprising a total of 1,044 residential units—940 market rental units and 104 below-market rental units—resulting in a total density of 8.27 Floor Space Ratio (FSR). The development also envisions a new and expanded Safeway, a public plaza, and commercial spaces within the building podiums.

In a third-quarter investors' call on November 7, 2024, Crombie REIT's CEO, Mark Holly, indicated that once the rezoning process is completed—anticipated in the first half of 2025—the company plans to evaluate its options, including the potential monetization of the asset. This statement suggests that Crombie REIT may consider selling its stake in the project post-rezoning to capitalize on the increased property value resulting from the approved development plans.

The redevelopment project has been a subject of public debate, with community groups expressing concerns over the proposed height and density of the towers, as well as the affordability of the housing units. The latest proposal exceeds the existing policy guidelines for the area, prompting discussions about its alignment with community needs and city planning objectives.

Crombie REIT's consideration of monetizing its investment aligns with its broader strategic objectives. The company has previously engaged in similar transactions, such as the sale of its interest in the Zephyr development on Davie Street in Vancouver to Westbank for $133 million in September 2024. These moves reflect a strategy of optimizing its portfolio by capitalizing on high-value assets in competitive markets.

As the rezoning process progresses, stakeholders, including local residents, city planners, and investors, are closely monitoring developments. The potential monetization of the Safeway site underscores the dynamic nature of Vancouver's real estate market and the strategic decisions companies like Crombie REIT must make to balance community interests with business objectives.