Giant U.S. equity firm secures stake in Brentwood

LCRE now a strategic partner in the $2 billion North Burnaby mixed-use project

The “Amazing Brentwood”: $2 billion mixed-use Burnaby development, still under construction, has attracted international equity investors | Shape Properties

Shape Properties and co-owner Healthcare of Ontario Pension Plan (HOOPP) have brought in L Catterton Real Estate (LCRE), the real estate investment and development arm of U.S. private equity firm L Catterton, as a strategic partner in the massive redevelopment of the Brentwood Town Centre mall site in Burnaby.

LCRE is linked with French luxury retail conglomerate LVMH (Louis Vuitton Moët Hennessy) and Paris, France-based Groupe Arnault. Brentwood is LCRE’s first Canadian project and only its second in North America.

With more than $14 billion of equity capital across 17 offices globally, Connecticut-based L Catterton is the world’s largest consumer-focused private equity firm.

Marketed as the “Amazing Brentwood,” the North Burnaby project has been underway since 2014. The redevelopment includes more than 250 shops across 1.1 million square feet of retail space, 600,000 square feet of office and commercial space, and a one-acre plaza, all connected to SkyTrain on a 28-acre site. Most significantly, the development includes more than 6,000 condominiums in 11 highrise towers, some up to 70 storeys.

Shape Properties, the developer and landlord, declined to release details of LCRE’s stake in the $2 billion project.

“Shape was introduced to LCRE through discussions between the Shape leasing team and brands in LVMH’s portfolio about the Amazing Brentwood,” said Shape executive vice-president of development Darren Kwiatkowski. “As LVMH learned more, they recognized a potential fit for LCRE.”

John Horton, president of Shape, said the LCRE partnership is “a huge vote of confidence” for one of Canada’s largest mixed-use developments.

Some notable LCRE projects include the Miami Design District in Florida and Ginza Six in Tokyo, Japan.

Alexandre Heriard-Dubreuil, a partner and chief investment officer with LCRE, noted that HOOPP has been a long-term partner with LCRE, and said he was “impressed by the vision and quality of the Shape team.”

Brentwood has already seen three of its new residential towers sell out 1,400 condominiums, and the development’s Phase 1 is expected to be completed in the spring of 2019.

The existing Brentwood Town Centre mall, which includes Sears Canada as an anchor, will remain open throughout the initial phase of redevelopment.

“As a part of future phases, it will be fully renovated, reimagined and integrated into the rest of the Amazing Brentwood,” said Kwiatkowski.

No tenants for the office space have been announced, but Kwiatkowski said the towers would offer flexible workspaces to accommodate office campuses and large corporate headquarters.

Shape is also developing the $7 billion City of Lougheed, a 40-acre master-planned community clustered around Burnaby’s Lougheed SkyTrain station, that will include 23 residential towers; and the 80-acre Destination: Deerfoot City retail development in Calgary.

HOOPP, a fully funded pension plan, has 321,000 members across Ontario and holds more than $70 billion in real estate and other assets in Canada, the United States and Europe.