BTB Real Estate Investment Trust has invested $ 38.1 million to purchase two Class A office buildings in Ottawa adjacent to Lansdowne Park and TD Place Stadium, home of the CFL Redblacks.
Previously owned by Minto, the buildings are six-story 979 Bank Street, with a leasable area of 104,716 square feet, and adjacent 1031 Bank Street, with a leasable area of 11,510 square feet. They are located in the Glebe district, south of the city center.
“The price was right. For BTB, it’s a profitable acquisition, ”BTB (BTB-UN-T) President and CEO Michel Léonard told RENX.
“It’s a great investment and the properties are really well located. You can live, work and play in the same neighborhood, ”he said. “When I first saw it on paper I liked it, but when I went to visit it I really liked it and thought it was a property that we should acquire.”
Lansdowne Park Acquisitions
The buildings are 95% leased. Tenants include the Royal College of Physicians and Surgeons of Canada, BMO Nesbitt Burns, the Canadian Internet Registration Authority, Field Effect Software, and CPCS Solutions.
“We already have tenants looking to move,” he said. “We are already talking to tenants. “
The properties were negotiated by CBRE and BTB topped a bidding process.
BTB funded the $ 38.1 million acquisition (excluding transaction costs) by securing a $ 24.8 million first mortgage, with the balance coming from cash and a credit facility. existing acquisition.
A commercial part on the ground floor of 979 Bank, which includes a restaurant, was not acquired by BTB. There is also an underground parking garage on site which is owned by the City of Ottawa.
The buildings were completed in 2015 and feature glass curtain walls with views of Redblack matches and other stadium events from the offices.
No capital improvements are expected over the next few years, which was a major investment criterion for BTB, Leonardo said.
“Sometimes you buy a property and you think you have a good purchase price, then you turn around and find that there is a lot of investment to be made. In this case it was a newer property, it was extremely well maintained, extremely clean from the bowels to the tenant suites.
“Minto has done a really good job of maintaining this property.
Ottawa an attractive market for BTB
Real estate in Ottawa is a natural investment for a Montreal company like BTB, he said: “You get in your car, you drive for two hours, you do whatever you have to do and you can go home. you the same evening. You don’t waste a lot of time.
Additionally, with its high number of federal and professional organizations as tenants, the market is very stable, Leonard noted.
“The rest of Canada doesn’t look at Ottawa the way a Montrealer would consider investing in Ottawa,” he said. “There’s a lot of investment from Ottawa to Ottawa, but it’s a natural progression for a Montreal-based organization to go to Ottawa first. “
BTB now owns 10 office and industrial buildings in Ottawa and neighboring Gatineau.
According to the Altus group Investing trends survey For the third quarter of 2021, the Ottawa market is ranked fourth most preferred in Canada by investors, behind Vancouver, Toronto and Montreal.
Another report from Altus found that in the first three quarters of 2021, all asset types in Ottawa outperformed the same period in 2020, except for those offices which experienced the most uncertainty during the pandemic.
BTB seeks to diversify geographically
Leonard said nearly 80 percent of BTB’s investments are in Quebec and most of the rest is in Ontario. Most of BTB’s activities in the coming years will be in Ontario and elsewhere in Canada, outside of Quebec, “because we are trying to balance our investments”.
Last fall, for example, BTB acquired nine industrial properties and one office building in Saskatoon and the Edmonton area.
Most industrial properties are well located, recently built and in good condition. All have single tenants and good floor-to-ceiling clearances of 24 feet or more, he says.
“For a while we wanted to have some kind of geographic diversification, and so for us it became important to look at other cities in Canada in order to have that geographic diversification. “
BTB is also keen to purchase suburban office space in the Toronto area, where it has made several attempts to invest in recent years.
“We have been left at the altar many times in our quest to buy in this market. Hopefully over the next year or so we can do some deals in the suburbs of Toronto, because it’s been on our radar for three, four, or five years.
BTB now owns 73 properties, representing a total leasable area of approximately 5.7 million square feet and a total asset value of over $ 1.1 billion.
Leonard said BTB’s goal of reaching $ 2 billion in total assets by 2026 was ahead of schedule.