As the first of five dealerships moves into a new $100-million urban complex, Toronto dealer Shahin Alizadeh says the project’s mixed-use model of condos and auto retail is well-suited to a post-pandemic world.
“Our plans actually ended up being exactly right for the circumstances where we find ourselves,” said Alizadeh, CEO of Downtown Auto Group (DAG). “People won’t be running around anymore and saying, ‘I think I’ll spend my Saturday going from dealer to dealer.’
“What we’re hoping to do is create a destination so that people, rather than sitting at a laptop, can actually go and look at a half-dozen different brands.”
The five-acre (two-hectare), five-tower project represents an opportunity to reach urban consumers on their home turf, as well as a new business model, aimed at generating cost-savings and multiple revenue streams at time when online technology is rapidly transforming automotive retail.
The total cost of the facility, designed by the architectural firm Streetcar Developments, is just under $100 million, almost 50 per cent less than it would have been to build five new stores, Alizadeh said.
Although DAG broke ground in 2015, completion endured an 18-month delay, in part because of the pandemic, he said. Still, costs remained manageable by obtaining lower mortgage interest rates and selling some of the land being vacated by dealerships moving into the complex.
DAG owns the property and will be the sole owner and operator of the five dealerships. The group partnered with Toronto developers Streetcar Developments and Dream in 2014 to design and build the residential and non-automotive retail component, giving DAG partial ownership of the non-automotive businesses.
This development is bringing new aspects and profit centres into the business, said Alizadeh.