Investment Insights

Investment Insights
Montréal | Q3-2014
Multi-residential
The multi-residential market saw a considerable increase in sales
volume in comparison to last quarter, with approximately $344 million in
sales for the third quarter of 2014. Although the number of transactions
stayed relatively stable, the increase in sales volume can be attributed
to larger assets and building portfolios being traded this quarter. The
ELAD Group was by far the most active vendor this quarter, accounting
for 40 per cent of the sales volume in the multi-residential market.
Most Notably, ELAD sold 84 units in the iconic Westmount Square
tower to the Leclerc family; a private investor who paid approximately
$70 million dollars for the portfolio, representing $833,333 per unit.
Cogir Management Corporation also got in on the action, acquiring
a three property portfolio from the ELAD Group totaling 950 units for
approximately $68 million, representing close to $72,000 per unit.
Another notable transaction was the 186 unit property located in
Lévis, Quebec which traded hands for $13.1 million, representing
approximately $70,500 per unit.
Vacancy rates on the primary rental market remained relatively steady
in the Greater Montreal Area (GMA) at 2.8 percent while average
rents increased by 1.7 percent. Despite the increase of units on the
secondary rental market, vacancy rates also remained steady at
about 2.7 percent. The Villeray–Saint Michel–Parc Extension borough
currently has the lowest average rental rate in the GMA ($621) for a
2-bedroom apartment while the downtown area of Ville-Marie has the
highest ($1,399).
Cap Rate
Top Quality
Q3 2013: 4.50%-4.75%
Other Apartment
Q3 2013: 5.50%-5.75%
Sales Volume
Q3 2013: $151 M |
Q3 2014: 4.50%-4.75%
|
Q3 2014: 5.50%-5.75%
|
Q3 2014: $344 M
Number of Transactions
Q3 2013: 61 |
Q3 2014: 56
Notable Transactions
Portfolio sale (3 properties), GMA
Vendor: ELAD Group
Purchaser: Cogir
Sale Price: $68,200,000
Number of Doors: 950
Price per Door: $72,000
44 Châteaubriand Street, Lévis
Vendor: André Trudel
Purchaser: Christian Rouleau
Sale Price: $13,100,000
Number of Doors: 186
Price per Door: $70,430
Portfolio sale (3 properties), Lachine
Vendor: 9178-6707 Québec Inc.
Purchaser: 9307-6925 Québec Inc.
Sale Price: $12,940,270
Number of Doors: 153
Price per Doors: $84,575
The ELAD Group sold 84 units
in the iconic Westmount Square
tower to a private investor for
approximately $70 million.
JLL | Montréal | Capital Markets
Investment Insight | Q3-2014 | Page 2
Office
The office investment market experienced a substantial increase in the
third quarter of 2014, mainly attributable to the closing of the Liberty
Sites portfolio. The 1.7 million square foot transaction includes 26
office buildings and 1 industrial building located in the Saint-Laurent
Technoparc and was sold by Liberty Sites Ltd to the joint venture
partnership between HOOPP, Forgestone Capital and Canderel for
approximately $285 million dollars.
The Redbourne Group acquired a 3 property portfolio from Iscanco
located in Longueuil totaling 309,803 square feet for approximately
$54.2 million, representing $175 per square foot. A total of 4.2 million
square feet of office space was traded in the third quarter representing
a total sales volume of approximately $427 million, of which 67 percent
was attributable to the Liberty Sites portfolio. The average weighted
price per square foot stayed relatively stable quarter to quarter and
currently sits at $164.40 in the GMA.
Cap Rate
Downtown Class A
Q3 2013: 5.75% Downtown Class B
Q3 2013: 6.50% Sales Volume
Q3 2013: $113 M |
Q3 2014: 5.75%
|
Q3 2014: 6.50%
|
Q3 2014: $427 M
Number of Transactions
Q3 2013: 7 |
Q3 2014: 13
Notable Transactions
Liberty Sites portfolio (27 properties), SaintLaurent
Vendor: Liberty Sites Limited (Sandra Levy)
Purchaser: Joint venture (HOOPP, Canderel,
Foregestone Capital)
Sale Price: $285,000,000
501-507 Côte de la Place d’Armes, Montréal
Vendor: 9213-4568 Québec Inc.
Purchaser: Holand Leasing Limited
Sale Price: $23,500,000
Portfolio sale (3 properties) GMA
Vendor: Iscanco
Purchaser: Redbourne
Sale Price: $54,175,897
The 27 property Liberty Sites
portfolio closed this quarter
and was purchased by a
joint venture for an
approximate $285 million.
JLL | Montréal | Capital Markets
Investment Insight | Q3-2014 | Page 3
Industrial
After last quarter’s sub-par performance in the sector, the industrial
market saw a significant increase in investment activity. Total sales
volume for the third quarter totaled approximately $189 million in
comparison to just $65.5 million last quarter. This also represents a
12 percent increase as compared to the same period last year. 46
industrial properties traded over $1 million in Q3-2014 (including user
and vacant sales).
The most notable industrial transaction was the 106,263 square foot
FedEx Ground building with additional land in Dorval sold as part
of an 11 property portfolio to Pure Industrial REIT. The building has
a net lease to FedEx expiring in 2024 and sold for approximately
$20.4 million, representing $192 per square foot and a 7.2% cap rate
(allocated). Another significant investment transaction was that of a
60,786 square foot industrial property located at 6810 Boulevard des
Prairies in Saint Leonard. The single tenant building is currently 100
percent occupied by Alasko foods with a lease expiry in 2022. The
property was acquired by Nobel REIT for a purchase price of $9.7
million.The weighted average square foot for industrial properties
currently sits at $64.40 per square foot in the GMA, which includes
investment transactions as well as user and vacant sales.
Cap Rate
Single-Tenant
Q3 2013: 7.00% Multi-Tenant
Q3 2013: 8.0% Sales Volume
Q3 2013: $168 M |
Q3 2014: 7.00%
|
Q3 2014: 8.0%
|
Q3 2014: $189 M
Number of Transactions
Q3 2013: 37 |
Q3 2014: 46
Notable Transactions
2000 Saint-François Street, Saint-Laurent
Vendor: Scannell Properties
Purchaser: Pure Industrial REIT
Sale Price: $20,444,735
6810 des Grandes Prairies Boulevard,
Saint-Léonard
Vendor: Mounir El-Mashtoub
Purchaser: Nobel REIT
Sale Price: $9,700,000
2995-2999 Le Corbusier Boulevard, Laval
Vendor: KingSett Capital
Purchaser: Dream REIT
Sale Price: $8,400,000
Following a slow second
quarter, the industrial market
has seen a substantial increase
in investment activity in Q3.
JLL | Montréal | Capital Markets
Investment Insight | Q3-2014 | Page 4
Retail
The retail investment market also experienced significant growth in both
total sales volume and the number of square feet traded in comparison
to the same time last year. Although the number of transactions stayed
relatively stable, several large transactions were attributable to the
upsurge in activity. A total of 1.5 million square feet of retail space was
traded this quarter representing a total sales volume of approximately
$349 millionand a weighted average price per square foot of $176.51.
The most notable transaction this quarter was the 236,000 square foot
acquisition of newly developed mix-use, retail and office assets in the
heart of Montreal’s Griffintown neighbourhood. The acquisition by First
capital Realty from Montreal developer Devimco, includes 157,000
square feet of retail space along with 79,000 of office space and 255
parking underground parking spaces, for an aggregate purchase price
of $102.2 million, representing $433 per square foot. The retail portion
will include strong covenant tenants including Winners, SAQ and will be
grocery anchored with a Metro supermarket.
Another notable transaction this quarter was the sale of the Lachenaie
SmartCentre located in Terrebonne. A joint venture comprised of
Calloway REIT and Investors Group acquired the 442,800 square foot
shopping centre from SmartCentres Group for approximately 55.9
million, representing $126 per square foot.
Cap Rate
Regional Shopping Centre
Q3 2013: 5.00%
|
Sub-regional Shopping Centre
Q3 2013: 6.5% |
Sales Volume
Q3 2013: $97 M |
Number of Transactions
Q3 2013: 49 |
Q3 2014: 5.00%
Q3 2014: 6.50%
Q3 2014: $349 M
Q3 2014: 46
Notable Transactions
Peel and Wellington Streets, Montréal
Vendor: Devimco
Purchaser: First Capital Realty
Sale Price: $102,200,000
1001 des Migrateurs Street, Terrebonne
Vendor: Smart Centres
Purchaser: Joint venture (Calloway REIT
and Investors Group)
Sale Price: $55,991,878
3100 de la Concorde Boulevard East, Laval
Vendor: Pyxis
Purchaser: Group Mach
Sale Price: $17,500,000
First Capital Realty has
purchased the commercial
portion of the District-surPeel, a condo project to
delivered in 2016.
JLL | Montréal | Capital Markets
Investment Insight | Q3-2014 | Page 5
Land
Total sales volume for land transactions totaled approximately $167
million in the third quarter of 2014, an increase of 7 percent from the
same time last year. This increase was mainly attributable to the 36
million square foot acquisition by the Monit Group of 131 lots located
near Highway 25 East in Laval.
Another notable transaction was a 21,000 square foot residentially
zoned vacant lot acquired by local developer Canvar located on
Rene-Levesque Boulevard. The purchase price was $11.75 million,
representing $562.25 per square foot.
Sales Volume
Q3 2013: $156 M |
Number of Transactions
Q3 2013: 31 |
Q3 2014: $167 M
Q3 2014: 34
Notable Transactions
Marcel-Villeneuve Avenue, Laval
Vendor: 9039-2630 Québec Inc.
Purchaser: Monit
Sale Price: $26,200,000
René-Lévesque Boulevard West, Montréal
Vendor: Smart 92384 Canada Limited
Purchaser: Canvar
Sale Price: $11,750,000
Jean-Talon Street East, Saint-Léonard
Vendor: Ace Holdings Limited
Purchaser: Résidence Le 22 Inc.
Sale Price: $8,052,500
The Monit Group acquired 36
million square feet of land from a
private investor near Highway 25
East in Laval.
JLL | Montréal | Capital Markets
Investment Insight | Q3-2014 | Page 6
For more information, please contact:
Mark Sinnett
Executive Vice President
Real Estate Broker
+1 514 667 5696
mark.sinnett@am.jll.com
Robert A. MacDougall
Senior Vice President
Chartered Real Estate Broker
+1 514 667 5654
robert.macdougall@am.jll.com
Joseph von Maltzahn
Associate Vice President
Real Estate Broker
+1 514 667 5699
joseph.vonmaltzahn@am.jll.com
Armen Markarian
Associate
Commercial Real Estate Broker
+1 514 667 5695
armen.markarian@am.jll.com
Prepared by:
Scott Speirs
Vice President
Real Estate Broker
+1 514 667 5663
scott.speirs@am.jll.com
Sebastien Gatti
Associate
Commercial Real Estate Broker
+1 514 664 5682
sebastien.gatti@am.jll.com
Jones Lang LaSalle Real Estate Services Inc.
Real Estate Agency
1 Place Ville Marie, Suite 2121
Montréal, Québec, H3B 2C6
Tel. +1 514 849 8849
For further infomation, please visit our website: www.jll.ca
About JLL
JLL (NYSE: JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased
value by owning, occupying and investing in real estate. With annual fee revenue of $4 billion, JLL has more than 200 corporate offices and operates
in 75 countries worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 3
billion square feet and completed $99 billion in sales, acquisitions and finance transactions in 2013. Its investment management business, LaSalle
Investment Management, has $48.0 billion of real estate assets under management. JLL is the brand name of Jones Lang LaSalle Incorporated. For
further information, visit www.jll.com.
About JLL Research
JLL’s research team delivers intelligence, analysis and insight through market-leading reports and services that illuminate today’s commercial
real estate dynamics and identify tomorrow’s challenges and opportunities. Our more than 400 global research professionals track and analyze
economic and property trends and forecast future conditions in over 60 countries, producing unrivalled local and global perspectives. Our research
and expertise, fueled by real-time information and innovative thinking around the world, creates a competitive advantage for our clients and drives
successful strategies and optimal real estate decisions.
This publication is the sole property of Jones Lang LaSalle IP, Inc. and must not be copied, reproduced or transmitted in any form or by any means,
either in whole or in part, without prior written consent of Jones Lang LaSalle IP, Inc.
COPYRIGHT © JONES LANG LASALLE IP, INC. 2014