Recipe for Success on Calgary’s 17th Avenue SW • RENX • Real Estate News Exchange

Enzo is the next development to be built along Calgary’s 17th Avenue SW by Arlington Street Investments. (Courtesy of Arlington Street)

Calgary developer Frank Lonardelli sees a void in the city for purpose-built residential rental properties that also feature street-side retail. It is a void that he intends to help fill.

The model has been a staple of the development community for years in places like Toronto, Vancouver, and Montreal, as well as European cities.

And it’s a trend that Lonardelli, the CEO of Arlington Street Investments, has already skipped in Calgary. In particular, it concentrates these types of projects along the busy 17th Avenue SW corridor, with its high traffic in terms of both pedestrians and vehicles.

His latest project is Enzo, which overlooks the busy street and is located across from Tompkins Park. It will house 90 units and approximately 10,000 square feet of retail space, including the popular Italian restaurant Buon Giorno which has stood on the current site for decades.

Construction is also expected to begin in early 2023 and be completed in 2024.

“And we had 70,000 square feet of ground floor retail interest,” Lonardelli said.

Enzo, Arlington, apartments and shops

The Enzo site includes four properties Arlington has purchased in recent years and follows the recent completion of Fifth, which features 52 apartments and 12,000 square feet of street-front retail at the busy intersection of 17th Avenue and 5th Street.

“It’s a very European model. If you go to any European city, there’s always a landlord on the ground floor and it’s very common for people to live upstairs,” Lonardelli explained.

“The thing is, if you went to Vancouver or Toronto, there would be a huge number of examples of mixed-use development.

“Calgary is 20 years behind Vancouver and Toronto. I like to be part of a trend that is 20 years behind.”

He also cites generational differences as another driver of the trend.

“We also have this very interesting demographic that has been perpetuated by a number of things. In our generation, the first thing we wanted to have was a car, then we wanted to have a house. Gen Z and millennials don’t think that,” he said.

“They think about experiences. So they want to live in new, well-located, amenity-rich buildings. And that’s our clientele. We’re not a mass landlord.

“Large rentals really represent the entry level of the market. . . . We are not interested in this clientele.

“The clientele we want and will serve will be an urban clientele, likely recent graduates, who want to live, work, play and shop within a four-block radius of where they walk to work.

“My guy or my daughter is not going to own a car. They are going to get around on scooters and Ubers.”

Other segments identified by Lonardelli include urban professionals recently divorced or separated from a partner; and retirees who have sold their home in Calgary, have retirement properties in warmer climates, and want to move into a smaller home in the city.

Developing 17th Avenue

Frank Lonardelli is the CEO of Arlington Street Investments.  (Courtesy of Arlington Street)
Frank Lonardelli is the CEO of Arlington Street Investments. (Courtesy of Arlington Street)

Lonardelli said 17th Avenue has always been the street “that wants to happen.”

“I didn’t do anything unique. I just decided to do what everyone wanted to do. They just didn’t do it because it would take too long or it would be too difficult, which they were probably right about,” he said. “If you talk to any developer today and say, ‘If you had the ability to build in the Beltline, where would you want to build?’ they would tell you the 17th.

“The reason they didn’t is because we went out of the market to buy all these buildings. So none were for sale. If you’re a developer and you’re going door to door, you know that, man, it’s going to take a lot of time, a lot of energy. We thought it was an opportunity. »

Arlington intends to develop approximately seven sites along the much-publicized gateway on the outskirts of downtown Calgary.

“We didn’t tell anyone we were going after all these buildings on 17th Avenue, and then we bought 27 buildings and consolidated them into eight different development sites. We now own 40 buildings. It’s over that aspect of it,” Lonardelli said.

“Then it was about changing the land use, which we did on every project.”

Plans for the 17th Avenue development began three years ago when Arlington renovated the National Building at the corner of 17th and 5th Streets. The 36,000 square feet of office space is fully occupied and the street front includes two food establishments.

“The appeal for us (for rental apartments) is that we don’t like to sell our assets. We believe that the 17th Avenue Corridor will continue to appreciate in the short and long term.

“Our city is way behind in terms of new rental stock. And the other thing is we really want to create an ecosystem . . .

“We wanted to acquire intersections and then how do we use commercial tenants to positively affect every commercial tenant in our building versus the tapestry of all the other things that are already in the market,” Lonardelli said.

Future projects along the corridor

The fourth project Arlington has planned is the Fishman Block at the corner of SW 17th Avenue and 5th Street, across from Fifth and kitty-corner at the National. This project will include approximately 210 apartments with 12,000 to 15,000 square feet of retail space.

Arlington will partner with a builder on this project, which it expects to announce in 2023. The project is scheduled to start either late in the third quarter or in the fourth quarter and be completed in 2025.

Arlington also has a site a few blocks west that it calls High Street, where the Higher Ground cafe is currently located. Eventually, it will become the company’s fifth project on 17th Avenue SW.

“We don’t intend to do anything with this building at this time,” Lonardelli said.

The company also has two sites at the corner of 17th Avenue and 14th Street for future development.

One is called The Sentinel, which Lonardelli describes as the largest assembled site on the Beltline at 66,000 square feet.

“That asset over there has 500 units. It will probably be a partner, or we have some very large institutions that want to move this project forward. So we’re going through that process right now,” Lonardelli said.

“Our long-term goal is to execute on a project-by-project basis and make sure you test the market along the way.”