A Montreal developer more than doubled its $19 million investment in less than two years without building a thing.
Instead, the firm created value by gaining approval to add apartments to a strip mall while buying a stake in another retail property. The strategy shows the potential returns of winning permission to expand shopping areas to include residential real estate—a longtime practice in North American commercial property that's picked up some since the pandemic.
In this case, the investment began when Harden bought a 50% interest in the property, as well as a similar stake in the Galerie Lachines mall about a 15-minute drive west in a $19 million purchase from RioCan Real Estate Investment Trust in December 2019. Harden, a company with 80 employees and led by co-CEOs brothers Chris and Tyler Harden, set to work creating the myriad reports and proposals required to generate approval from municipal authorities.
The two companies sought permission to build 1,800 residential units on the site of the aging Centre Carnaval shopping centre in the Montreal borough of LaSalle. The move to build 13 towers as high as 16 floors follows years of discussions with municipal authorities initially launched by landowners RioCan REIT of Toronto and Montreal developer Harden.
Adding apartments, hotels, offices and other types of buildings to expansive mall sites has long been occurring in the United States. In late 2022, Simon Property Group, the largest owner of malls in the United States, acquired a 50% stake in global mixed-use developer Jamestown in hopes of growing its transformation program and wringing new revenue from its portfolio by diversifying its shopping centers.
In Montreal, the process for obtaining approval to add residential uses to mall properties isn't unusual, as evidenced by applications at the Quebec lobbyists registry. Companies such as Cominar and First Capital REIT, among others, have been working on getting approvals to add residential and commercial space to their shopping malls.
Lots of Legwork Required
As the Centre Carnaval project shows, the approval process can be drawn out and involve expenses costing millions of dollars, and the work and invested funds still do not guarantee success, according to one local lobbyist who did not participate in this deal.
“It requires architects, engineers, and urban planners to create a spot zoning or a bylaw that changes the zoning,” said Karim Boulos, a registered lobbyist specializing in Montreal real estate projects. There’s a whole bunch of legwork required: creating studies, dealing with public consultations, writing reports, consulting experts on environmental issues. There’s a lot to go into a proposal to the city that requires a property get rezoned.”

Harden took part in that process after it purchased a 50-50 share of the Centre Carnaval mall from RioCan, a real estate company with which it frequently partners.
The two companies sought approvals to build something more ambitious on the site.
“We were looking at a fairly impressive plan to do multi-residential, condos, rental, with a seniors component. We worked for a couple of years with the intention of developing, we got to a place where we were able to show the potential of the site. It was exciting,” Harden co-CEO Chris Harden said in an interview. “There were challenges trying to get the project into the construction phase. At one point, we and RioCan, as partners, said maybe we could sell this specific asset.”
Handing Off to Different Owners
After advancing the entitlement process to add residential space to the site, Harden and RioCan sold Centre Carnaval mall to Montreal real estate developer Brivia Group in August 2021 for $70 million. Brivia later completed the entitlement process and won permission to add residential.

The $19 million the Hardens put into the deal for Centre Carnaval translated to $35 million in just under two years after it invested in the property. The Brivia sale did not include the Galeries Lachine property, Harden and RioCan still remain owners of that strip mall at 2760-3510 Remembrance St.
“We are happy that Brivia was able to get their approvals, and we wish them nothing but the best,” said Harden.
Brivia, meanwhile, has faced financial difficulties that have prevented it from completing several projects including one on Peel Street in downtown Montreal.
For his part, lobbyist Boulos said rezoning properties is a more complex process than it once was.
“The public gets its say. They can oppose and block projects," he said in an interview. "It’s a transparent process and has to be done publicly. It’s not a handshake and a martini like in the old days. It requires a whole bunch of documentation in order to amend existing bylaws. It’s a laborious process."
Boulos concedes that turning them all into residential or mixed-use projects doesn't always pencil out.
“You can’t put a dollar value on such permissions because each case is different," Boulos said. "You need to measure the amount of effort put into (each project) in terms of time and professionals and experts against the amount of value you create. There are many properties where, no matter how much work you put in, you can only increase the value by so much. If you increase a property from $5 million to $10 million it might not be worth it. It’s case-by-case but everybody is trying to increase values."
Chris Harden, for his part, agrees that more strip malls will be transformed into residential regardless of the hurdles.
“These transformations are not only the future but also the present," he said. Today’s consumers like convenience. If you are within walking distance of amenities, there will always be life within a property. That’s what people are looking for.”