2400 -2620 Trans Canada, Pointe-Claire – Executive Summary
Description of Project
Objective
The objective of the Managing Partners is to generate substantial cash flow and capital appreciation to a real estate asset through a predetermined gentrification program. This program will be multifaceted and ultimately achieve blend of new and high profile hi-tech façade space with an older but still marketable industrial space. Certain other treatments will also serve to achieve the objective including partial demolition and lot sub-division.
Conditions in 2005
The buildings located at 2400 – 2620 Trans Canada form an “L” shape and occupy approximately 1/3 of the nearly 900,000 sf of land area. They are comprised of:
- five older (1962 to1975), deteriorated attached industrial buildings with 16 ‘to 18’ clear height. These buildings front entirely on the Trans Canada Highway. Approximate GLA 180,000 sf
- a more up-to-date 24’ clear height building attached at the rear of the eastern most front building was built for Avon Canada in 1989. Avon Canada continues to occupy the entirety of this building (as well as an additional 40,000 sf in the older attached building). Approximate GLA 112,000 sf.
Development Plans
Following an intensive review of the permitted zoning and building by-laws as well as the local industrial/commercial real estate market, the managing partners have conceived the following development plan;
1) split the property in to two more-or-less equal halves with the property line running perpendicular to the Trans Canada. The centre building of the older front buildings will be demolished to make way for common access and parking between the sites.
2) Following demolition, the two remaining buildings on the eastern half, comprising of approximately 75,000 sf, will receive a complete overhaul, including raising the clear ceiling height to 26’, removal of the existing façade and installation of a new hi-tech “California” style façade on the front and western walls. The Managing Partners have retained architect Maurice Bergman whose projects include the acclaimed Liberty development on Trans Canada and Highway 13 to design the project. His site plans and the related perspective are both impressive and cost effective (see Triad Construction detailed estimate). In addition to the existing structure, approximately 30,000 sf of new construction will be added at the rear of the older section. Including mezzanines, in all this front eastern area (block A) will grow to more than 120,000 sf for a total GLA in excess of 230,000 sf when including the attached Avon area at the rear.
3) The two remaining western front building and land will be either offered for sale or held for future development and will be comprised of approximately 75,000 sf of building on 450,000 of land. It is expected that the eastern half development will greatly improve the value of the western half for both leasing and/or resale purposes.
Market Outlook
It is the opinion of both the Managing Partners and the authors of the Altus Helyar report that the projected rental rates for this project are both reasonable and attainable. The Pointe-Claire industrial rental market enjoys both high rental rates and amongst the lowest vacancy rates in Quebec. Furthermore, the Trans Canada Highway is the most sought after location for high profile industrial/commercial tenants and built-to-suit owners. As such, it is also the opinion Managing Partners that the location and character of the new 2400 -2620 Trans Canada, Pointe-Claire will withstand any future market downturn.
Conclusions
2400 -2620 Trans Canada, Pointe-Claire is no doubt a “diamond in the rough”. The current owners have little development appetite and are presently in the process of liquidating their entire real estate portfolio in the hundreds of millions of dollars. For the most part, the kind of gentrification proposed, while common with other types of real estate such as residential or retail, is rare for an industrial property. Under the supervision of Managing Partners (see personal bios), 2400 – 2620 Trans Canada, Pointe-Claire will soon be the most impressive industrial/commercial real estate project in Montreal’s west island.
