Algoma Central Properties has begun its selloff

While Algoma Central Properties president Tom Siklos would prefer if its parent company wasn’t getting out of the real estate business, he’s trying to make the most of it.

Algoma Properties“We want to accomplish what the board has asked and when we walk away from here we want to have raised as much capital as possible,” said Siklos, who’s in his seventh year as president of the Algoma Central Corporation unit.

Algoma Central Corporation operates the largest Canadian flag fleet of dry and liquid bulk carriers on the Great Lakes-St. Lawrence Waterway and has contracts for seven new vessels as part of its ongoing fleet renewal program. It also owns ocean dry bulk vessels operating in international markets, provides ship management services for other ship owners and owns a ship repair and steel fabricating facility. The company is also undertaking a new initiative to grow into global niche markets, beginning with a 50-per cent interest in a pneumatic cement carrier business.

To fund these initiatives Algoma Central Corporation decided last fall to sell its portfolio of 13 properties comprising more than a million square feet of space in Sault Ste. Marie, St. Catharines and Waterloo, Ont. The disposition will mark the end of Algoma Central Properties, which was founded in 1973.

Algoma Central Properties’ origins

“They were in Sault Ste. Marie and decided to diversify in the 1970s, so they built a small shopping centre, a hotel and a small office tower which is called Station Tower,” said Siklos. “Things went well and there were three subsequent expansions of the shopping centre, and they built the apartment building.

“When they moved the head office to St. Catharines, they decided they wanted to diversify into southern Ontario so they bought a portfolio of properties here in St. Catharines. They bought the building they were headquartered in, which is 63 Church, and then a little bit here and a little bit there.

“Waterloo was another acquisition for diversification purposes. Waterloo was the last big acquisition we made, and that was eight years ago. Since then we’ve focused on renovating, upgrading and leasing the portfolio.”

First three properties to be sold

Algoma Central Properties announced last month that the Martindale Business Centre in St. Catharines and the three buildings at 408, 410 and 412 Albert St. located within the “Waterloo Technology Campus” sold for total $36.8 million.

The Martindale Business Centre is a 35,000-square-foot service plaza that accommodates tenants requiring 1,000 to 10,000 square feet of space. Siklos said the “small office and flex industrial space” has roll-up doors in the back but was only being used as office space.

The Waterloo properties total approximately 155,000 square feet of office space, with 408 Albert combining office, distribution, testing, production, assembly and warehousing. The three buildings were sold to Sandvine, one of the tenants of the property.

The $14.1-million sale of Ridley Square in St. Catharines closed on Oct. 7. The 47,585-square-foot retail and service industry property is situated at the intersection of Fourth Avenue and Martindale Road and offers excellent visibility and access, high traffic counts and ample parking.

There were multiple bids on each property, according to Siklos. Algoma Central Corporation is listed on the Toronto Stock Exchange and Siklos said the market has reacted favourably to each sale.

Algoma Central Properties’ remaining portfolio

The rest of the Algoma Central Properties portfolio will be listed for sale in the next month or two, according to Siklos. Avison Young, CBRE and Colliers International are the brokers.

The remaining Sault Ste. Marie properties are: the 195-guestroom Delta Sault Ste. Marie Waterfront Hotel and Conference Centre; the Station 49 apartment building; a three-storey heritage office building at 289 Bay St.; the 62,000-square-foot Station Tower office and retail property; and the 500,000-square-foot Station Mall.

The remaining St. Catharines properties are: the 44,000-square-foot Huntington Square retail complex; a 57,000-square-foot office building at 75 Corporate Park Dr.; an eight-year-old office building at 25 Corporate Park Dr.; an office building at 20 Corporate Park Dr.; and the 63 Church St. office complex that’s home to Algoma Central Corporation’s headquarters.

Siklos said the portfolio has a 94-per cent occupancy rate and has been performing well.

Selloff will cause job losses

“We’re selling at top market price. But if you were just a real estate company you wouldn’t sell now. You’d hold on to it and keep growing. But if you want to reinvest in higher returns in the shipping business, the timing is right. Right now shipping is not doing well worldwide, so buying opportunities are very good.”

When all the sales are completed sometime next year, Siklos and 26 other Algoma Central Properties head office employees will be out of jobs.

“It’s not what I would have wanted because I run the real estate company, but I understand from a portfolio decision-making perspective why they’re doing it,” said Siklos.

“There are very few times that you get an opportunity to work for a company that’s not cash-strapped. We’ve been able to invest in our properties in very meaningful ways, so all of them are showing very well because we haven’t had to skimp on maintenance and renovations.”


Steve is a veteran writer, reporter, editor and communications specialist whose work has appeared in a wide variety of print and online outlets. He’s the author of the book Hot…

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Steve is a veteran writer, reporter, editor and communications specialist whose work has appeared in a wide variety of print and online outlets. He’s the author of the book Hot…

Read more





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