Idea Quarter takes shape in former Blackberry buildings in Waterloo

Saturday, October 17, 2015

Michael Wekerle invests in Blackberry buildings

The Record - Waterloo Region

By Terry Pender

WATERLOO - The Waterloo Innovation Network has plans to transform the former BlackBerry properties near Phillip and Columbia streets into a mixed-use, high-density technology cluster that will include several new buildings.

In the short term, the network wants to buy another former BlackBerry building on Phillip Street.

Michael Wekerle, the former Bay Street trader who founded the network, has invested nearly $50 million in six old BlackBerry properties he bought along Columbia and Phillip streets last year. The flamboyant entrepreneur will be spending a lot more if his vision is realized.

The preliminary master plan calls for seven new building in five phases, and a public event space called Innovation Square. The network has hired Robertson Simmons Architects to do the design and master planning.

Wekerle, a dragon on the CBC television show "Dragons' Den," is aiming for a mixed-use development where tech workers can live, work and play in the same area. He loves Liberty Village in Toronto, and wants to see something like that on his company's properties.

"When you do anything, put yourself in the shoes of the people you want to be there, then step back and look at your surroundings," Wekerle said of his vision for the area, which this summer was rebranded as the Idea Quarter.

Currently, there are vast swaths of surface parking between the former BlackBerry buildings. Wekerle wants to see that space filled in with new mixed-use buildings, as well as bike paths, walkways and streets that will connect his technology cluster to the light rail station that will be built in the nearby David Johnston Research and Technology Park. His team is working to integrate his vision with the City of Waterloo's plans for the area around that light rail station.

Wekerle was a lead trader at GMP Securities when BlackBerry, then called Research In Motion, went public in 1997. The founder of Toronto-based Difference Capital has shifted his investment focus from Bay Street to the Waterloo Innovation Network, believing that the next big things in technology will come out of Waterloo Region.

He bought the former BlackBerry building at 156 Columbia St. in early 2014. The network later bought five other former BlackBerry buildings from Spear Street Capital, the San Francisco-based company that acquired most of BlackBerry's Canadian real estate portfolio for $305 million in May 2014.

Today, the network has almost run out of room. It has 78 per cent occupancy in the buildings, which contain about 350,000 square feet of space, and is "in negotiations with several companies," according to Mark Arbour, its chief operating officer.

Two more tenants have signed leases and will be moving into one of the network's buildings.

"We have slowed down the leasing because we are running out of space right now," Wekerle said.

The network wants to buy several nearby commercial properties and at least one other former BlackBerry property — the building at 440 Phillip St. that is still owned by Spear Street and contains 160,000 square feet of space. "I am trying to buy 440 right now," Wekerle said.

Wekerle said he hopes all of the planning work and approvals for the proposed tech cluster will in place by the third anniversary of launching the network. He wants to build it out during the following two years.

"After five years I would like to have the whole thing done," he said.

The area along and around Phillip Street is being branded as the Idea Quarter. Property owners came up with the concept and it received the backing of Waterloo city council in July.

Spear Street also hopes to spark revitalization of the area with the redevelopment of the 250,000-square-foot former BlackBerry building at 451 Phillip St. It is one of the former BlackBerry buildings of which it retains ownership.

The building tells the story of the region's evolving economy. Originally, the home of Waterloo Industries, it later housed leather belt manufacturer Custom Leather and furniture company Stack A Shelf. RIM acquired the building in the late 1990s and turned it into a manufacturing centre for BlackBerry smartphones.

Spear Street is now redeveloping the building as Factory Square. It will contain 200,000 square feet of loft-style offices with skylights and floor-to-ceiling windows. New double-height entrances will be created, one facing Phillip Street and the second, on the opposite side, facing the nearby light rail transit station in the research and technology park. The building will also contain a coffee shop, restaurants and a 16,000-square-foot courtyard with trees, benches and tables.

Raw Design, the same Toronto architecture studio that designed the Tannery building in downtown Kitchener, is working on Factory Square.

Karl Innanen, managing director of the Waterloo Region office of Collier's International, the real estate firm handling leasing of the property, said the first tenants should be moving into Factory Square early next year.

There is little demand in Waterloo for a large industrial building like the one at 451 Phillip St. and many similar spaces have been converted into offices, Innanen said. "The industrial market in Waterloo was actually shrinking for the past five years," he said.

The building's proximity to the University of Waterloo, the research and technology park and the light rail transit station presented Spear Street with a unique opportunity — a transit oriented development with a large floor plate, Innanen said. "It was just seen as a great location to add more office space to the equation," he said.

For a long time, Phillip Street was dominated by BlackBerry. As the smartphone maker's presence shrank, other firms have moved in.

"BlackBerry was elbowing other tenants out of the marketplace, and the thought was as BlackBerry contracted there would be a vacuum that others would be drawn into," Innanen said. "We are absolutely seeing that play out."

tpender@therecord.com

Read original article here.

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