Off-Market Deal Leaves Two Winners

The anonymous sellers owned and had their offices at the Downtown West mixed-use building near Queen St. W for 30 years. But over the past decade, it has become more of an investment property for them. Tim (left), who's part of Ashlar Urban's investment team, and the leasing team of Clarke Struthers and Tony Hamilton, got together to educate the vendor on how to take advantage of the significant capital in the marketplace. The vendor's preference was to quietly complete a transaction. (Here's how good they are: The way they're standing subliminally makes us believe that their revenue is heading up.)

The Pearl Group bought the 22k SF, five-storey building, and retained Ashlar to lease up the one remaining vacant floor. Tim cites Ashlar's long-term relationships and in-house collaboration in getting the deal done. He says the vendor was able to get out of its holding at the top of the market, and the purchaser can reposition an exceptional character building "while adding value through the one vacancy and future renewals,” he says.

In May, PIRET CEO Kevan Gorrie said its sale of two non-core industrial properties was about redeploying that gain for acquisitions in core markets. So the announcement PIRET bought 11 US-based ground-level distribution centres for $235M makes sense. The space is leased entirely to a national courier company. With the number of people shopping via e-commerce, PIRET is taking advantage of “unique opportunities to own leading-edge logistics facilities in key US markets,” Kevan says. In addition, the equity raised for this acquisition will enable PIRET to reduce its leverage. “That's an important step towards our goal of lowering our debt-to-GBV to 40% within the next two to three years," he says. (Is that just a fancy way of saying owning a logistics company = FREE SHIPPING!?)

Landlords of lower-quality Class-B office buildings may well fear the deluge of Class-A space coming online over the next few years in markets like Vancouver and Toronto. But repurposing or repositioning lesser office spaces to lure specific, niche industries could be the secret to survival, says Colliers' Curtis Scott, based in Vancouver. This may be a great fit for "landlords looking to tap into the growing trend of organizations looking for creative spaces... But it's important to understand that it restricts that building's use to a specific industry."