While the housing market languishes, investment activity in commercial property continues to be red hot, with a $500-million deal for Standard Life?s real estate portfolio the latest on the horizon.
By some definitions, this could make 2012 the best year ever for commercial property sales ? a year in which the Bank of Nova Scotia sold its head office for a record-breaking $1.27-billion.
Postmedia News has learned that Montreal-based Standard Life is selling a major Toronto office along with three other properties in Montreal, Calgary and Edmonton in what would be the third-largest deal of the year.
Standard Life spokeswoman Ann-Marie Gagn? confirmed the sale of the two buildings in Alberta, but would not disclose the purchase price. The two had been part of a deal for a four-piece portfolio but it has since been broken up into two transactions.
?This was the best way for us to do it,? Ms. Gagn? said.
Northam Realty Advisors Ltd. has announced the acquisition of the two Alberta properties for its Luxembourg-based Northam Canadian Commercial Property Fund. According to data from RealNet Canada Inc., Standard Life sold the Calgary building for $114-million, after acquiring it for $42.9-million in 2005.
The other part of the transaction has yet to close but has ?gone firm,? according to several sources who identify Bentall Kennedy as the purchaser. No one could be reached for comment there.
The Bentall portion of the deal includes an office building at 1600 Ren? L?vesque Blvd. at the corner of Guy St. in Montreal, while the Toronto section is for the 25-storey Standard Life Centre at 121 King St. W.? It?s the latest large acquisition by Bentall, which bought 10 Dundas St. E. in Toronto for $226-million in 2011.
At a time when residential sales are softening in many parts of the country, the portfolio sale illustrates the ongoing demand for office properties in Canada.
Returns in the stock market and low bond yields still make real estate an attractive investment and there is lots of capital looking to find a home
?There?s not a lot for sale on the market,? said Bernie Marcotte, senior managing director of Cushman & Wakefield Ltd., Montreal. ?The demand is there; it?s just the product that?s not there.?
CB Richard Ellis Canada says based on year-to-date activity, it looks like there will be $28-billion in sales in 2012, which would make it the second-best year ever for activity.
Data from Colliers International, which don?t include deals under $10-million, put the rolling 12-month figure at $17-million, which actually surpasses the peak reached in 2007. Over the first nine months of the year, Colliers says there has been $13.5-billion in activity, which leaves the country on pace to pass 2007 when $16-billion in deals were made.
?It tells us there is still an enormous amount of capital looking for a yield or a return on investment,? said David Bowden, chief executive of Colliers. ?Returns in the stock market and low bond yields still make real estate an attractive investment and there is lots of capital looking to find a home.?
One source, who asked not to be named, said the Standard Life properties attracted as much attention as Scotia Plaza because it was a smaller deal that made it easier for companies to buy.
?They wanted us to bid on the entire portfolio but no one wanted it all so they started doing individual deals for all the properties,? said the source, adding the pricing wasn?t as high as the Scotiabank building. ?People liked it because it was a smaller deal.?
It?s not clear who Bentall is acting for on the transaction. It is 33% owned by management and 33% by the British Columbia Management Investment Corp. and 33% by CalPERS, the California Public Employees? Retirement System.
?They might be buying it for one of their funds which represents smaller pension funds,? the source said.
luck sag awards 2012 nominees sag awards pro bowl 2012 roster yamaguchi road house occupy oakland
No comments:
Post a Comment