As offices continue to empty in the Montreal area, Lachance Immobilier is completing the first conversion of an office building into a residential tower with 16, place du Commerce in L’Île-des-Sœurs.
The 10-story building that once had Nortel and Yellow Pages as tenants has been transformed into 142 apartments and commercial premises on the ground floor just steps from the Metropolitan Express Network station.
Lachance and its partner Fonds immobilier de solidarité FTQ had paid 48 million to Groupe Mach, Petra and the Saputo family in 2020 to acquire it.
Coming from a family of real estate developers in Quebec, Claude Lachance founded Lachance Immobilier in 1983 and has since built nearly 1,000 homes in Griffintown.
Vincent Chiara had paid 16.5 million for the building on December 30, 2016, identifiable at the time by the logo of the Yellow Pages company.
Real I.S., a division of a German financial group, paid $42.4 million in 2007 for the same asset when the Yellow Pages lease still had 10 years left.
The building was built in 1992 by developer Canderel for the needs of Nortel (then Bell Northern Research). When Nortel’s lease expired in February 2002, Canderel had turned over the keys to the building to its mortgage lender, Standard Life (now Manulife). The life insurer had pulled off a brilliant coup by re-letting the entire building to Yellow Pages Group.
Groupe Mach continues its shopping. After buying the InterContinental hotel in Old Montreal at the end of January, the real estate company has just acquired a prestigious skyscraper in Ottawa, as well as four commercial properties in Quebec.
Groupe Mach has completed nine major acquisitions since the start of 2023.
Mach and partner Sarees Investments are paying $277 million for ONE60 Elgin, a nearly 93,000 square meter office building. The transaction also includes the adjacent 850-space multi-storey parking lot, which offers building potential of up to 56,000 square meters.
“We love the quality of the building, which is LEED Gold certified. Obtaining certification for an existing building always requires significant costs,” explains Vincent Chiara, president of Mach, over the phone.
Mach now owns 223,000 m2 of office space in the Canadian capital, making it one of the region’s leading office owners.
Completed in 1971, ONE60 Elgin has 27 floors and is 94 meters tall. It is the 12th tallest building in the Ottawa-Gatineau region, according to Wikipedia.
Formerly called Place Bell Canada, the tower still has the telecommunications giant as its largest tenant, occupying about 40% of the area.
The seller is Real Estate Investment Trust H
Last March, Mach paid around $25 million to acquire four commercial properties located just south of Galeries de la Capitale on Bouvier Street in Quebec City. Its tenants are Rona, Adonis, Baton Rouge and the Quality Suites hotel.
In 2021, Mach had acquired six commercial buildings north of the Galeries, on Boulevard Lebourgneuf.
In both transactions, the sellers are Oxford and the Canada Pension Plan. They still own the Galeries de la Capitale shopping center.
“The repeal of the regulation for a mixed metropolis [also called 20-20-20] would reduce development costs and ultimately the price of new units,” argues the Montreal Economic Institute (IEDM), in its brief. pre-budget addressed to the City of Montreal.
The IEDM is a think tank advocating the law of the market in the economy.
The bylaw targeted by the Institute requires developers to incorporate social, affordable and family housing into their residential projects or pay financial compensation.
The organization looked into the case of the Le Mansfield project, at the corner of Sainte-Catherine Ouest and Mansfield streets. The developer wants to build 225 homes there. The bylaw adds $2.4 million to the cost of building and developing the project, or the equivalent of $10,535 per door.
The Institute recalls the existence of the housing affordability crisis, caused by the lack of housing. Based on data from the Canada Mortgage and Housing Corporation, the Institute reports that housing starts in the Montreal area must more than double, from 25,000 to 55,000 per year, “in order to return at a price level qualified as affordable”. However, by-law 20-20-20 constitutes a constraint, maintains the MEI, which slows down the construction of housing.