Prime, Downtown-Fredericton Development Lot Hits The Market
FREDERICTON – A regional player in corporate real estate is calling it “a rare opportunity” for potential developers to obtain a centrally located property in downtown Fredericton.
For the first time in more than 25 years, a vacant parcel of land at the northwest corner of King and Westmorland Street has hit the market.
The two-thirds acre lot, listed June 20 for $1.95 million, is located steps away from the city’s Westmorland Street bridge access and surrounded by several seven-to-ten-storey commercial buildings, residential properties, restaurants, and retailers.
The online listing from Partner’s Global also teases substantial redevelopment possibilities.
The land is zoned as “City Centre,” which allows developers the option to put up many kinds of buildings, including apartments, offices, retail, a licensed restaurant, hotel, institution, clinic or fitness centre, and more.
Prior development plans halted
The seller, Kileel Developments Ltd., an active developer in Fredericton’s commercial and residential sector, received approval from the City of Fredericton to build a nine-storey, mixed-use development in 2018. The plan was for KDL to construct a building with up to 75,000 square feet of office space at the site.
The company was at a point that it was negotiating with potential tenants in effort to fill at least 75 percent of the space to proceed with the development, though it never progressed much further.
President and CEO, John Kileel told Huddle in February of that year that the initial development involved a five-storey building but was altered to a mixed-use project, with up to seven floors of apartments, to better tap into what was a growing need for downtown housing in Fredericton.
“There’s [actually] a much stronger demand for apartments downtown than office space,” Kileel said at the time.
Fast forward to today and the need for residential housing has continued to grow–especially throughout the pandemic.
Residential developments remain active
Mark LeBlanc with Partners Global Corporate Real Estate in Fredericton helped list the site this week.
He says while there’s plenty of opportunity to be had from the space, he’s still seeing plenty of demand for multi-unit residential development.
“The multi-unit residential market has been extremely buoyant and active,” LeBlanc told Huddle. “We’re seeing that by way of new and significant developments in the downtown core for multi-unit residential, and notwithstanding increased construction costs and interest rates.”
Commercial demand slower in downtown
Assuming demand remains to support it, LeBlanc still sees multi-unit residential development continuing its current forward momentum, though he says it’s been a different story on the office side in Fredericton.
“There’s still a wait-and-see [attitude] in the market for tenants who are trying to figure their lives out after the pandemic – and if they’re going to go back and operate business as usual,” remarked LeBlanc. He adds that hybrid scenarios and various work-from-home models are still being considered.
“Those decisions I find are still being made by tenants,” he says. “I do see the market for office space as going to come back. It might take a bit longer than most might like but it’ll be there.”
Likewise, LeBlanc says there are some tenants who will inevitably pivot and decide that working from the office isn’t necessary but that there’s always going to be some degree of demand for downtown office space in a provincial capital such as Fredericton.
He says any potential developer — whether they lean into commercial, residential, or a mix of both at the King/Westmorland site — will have an opportunity to create something new, a rarity for a parcel that size downtown.
Parking perks
While KDL ultimately didn’t pursue its development plan, it has been renting the vacant lot as surface parking, with 95 spaces rented.
“Depending on the developer’s desire, the city would be open to entertaining various development scenarios given this is one of the last development pieces for the downtown,” states the ad.
Additionally, a Parkade Agreement between KDL and the City provides up to 100 parking spaces to be allocated to the new development.
Given the lot size and possibilities created by zoning, LeBlanc says the King/Westmorland parcel was already gaining some interest even before it officially listed this week.
“I’ve had a few discussions out of the gate early,” says LeBlanc, who relayed the wheels are still spinning on the marketing of the property, with signs not yet in the ground at the time of our interview on Wednesday.
“It’s early days,” he said, “but we do have some early interest for sure.”
Tyler Mclean is a Huddle reporter based in Fredericton. Send him your feedback and story ideas: [email protected].