The acquisition of the 2.8-million-square-foot Amazon facility in Ottawa, the largest fulfillment centre in Canada, meets several key objectives for Crestpoint Real Estate Investments Ltd., which assembled an international consortium for the $494-million purchase.
Crestpoint and its partners purchased a 90.1 per cent share of the state-of-the-art, multi-level facility in the suburban Southwest Ottawa community of Barrhaven. Developer Broccolini retained the other 9.9 per cent interest in the property, which was completed and turned over to Amazon late in 2021.
“This transaction combines our interest in the industrial market with the attractiveness that Canada really has in a global context for global investors,” Crestpoint executive vice-president Elliott Altberg told RENX.
“This was really just an opportunity for us to purchase a very stable, long-term core asset that expands our relationships with capital from around the globe, and an asset that’s leased to a credit tenant.
“It combines a lot of really good attributes.”
The facility’s new owners
The new majority owners of the centre, which anchors the CitiGate business park, are Crestpoint Core Plus Real Estate Strategy, Vestcor Inc., and Kiwoom Securities and Hangang Asset Management, a South Korean investment consortium.
Crestpoint is a commercial real estate investment manager with $7.5 billion of gross assets under management. The Crestpoint Core Plus Real Estate Strategy was established in 2011 as a diversified, open-ended pooled vehicle with a core-plus investment strategy that’s available to institutional clients and high-net-worth investors.
Connor, Clark & Lunn Financial Group Ltd. — a multi-boutique asset management firm whose affiliates collectively manage approximately $100 billion in assets for individuals, advisors and institutional investors — owns 50 per cent of Crestpoint. Crestpoint’s senior management owns the other half.
Fredericton-based Vestcor is jointly owned by the New Brunswick Public Service Pension Plan and the New Brunswick Teachers’ Pension Plan. It provides global investment management services to nine public sector client groups that represented approximately $19.4 billion in assets under management at the end of 2020.
Kiwoom Securities was founded in 2000 and trades on the Korea Exchange. It offers financial investment, management, investment marketing, investment brokerage, discretionary trust investment and investment advisory services.
Hangang Asset Management is a global alternative asset management company that invests in overseas infrastructure and all major real estate asset classes. Its major investors are pension funds, credit unions and insurance companies.
The new Amazon facility
The facility itself is fully leased to Amazon on a 20-year lease. It’s now paying rent, occupying the facility and has been finishing its fit-out, according to Altberg.
The site is 64.2 acres and the building footprint is approximately 630,000 square feet. It has 54 loading docks.
A variety of technological applications will enable it to process more than 100,000 packages per day.
The property also has: 2,062 car parking spots; 107 trailer parking spots; 250 bicycle parking spots; 18 motorcycle parking spots; and 10 electric vehicle truck chargers.
In retaining its share of the facility, Broccolini is following a similar strategy to the first major fulfillment centre it constructed for Amazon in Ottawa.
Broccolini also sold a 90 per cent stake in that facility, a million-square-foot building in the east end of the city, to Concert Properties‘ CREC Commercial Fund LP upon completion in 2020.
The two facilities, plus another smaller local distribution hub recently leased from Canadian Urban, give Amazon almost four million square feet of distribution space in Ottawa.
Crestpoint’s continued growth
This most recent deal, brokered by CBRE, is the largest of a series of major transactions for Crestpoint. It completed more than $1.9 billion of acquisitions involving office, industrial, retail and multiresidential properties during the past 13 months. The acquisitions have added more than 6.5 million square feet to its portfolio,
Crestpoint has also added 14 new members to its team, bringing its total number of investment professionals to 32. That number is expected to continue to grow.
The company has been a very active purchaser in Ottawa, including a four-property industrial portfolio from Huntington Properties for just over $50 million late last summer as part of its aggressive industrial expansion.
“This is a different type of purchase, given the long-term nature of the lease, the credit tenancy and the size of the industrial facilities,” Altberg said of the Amazon acquisition. “It meshes really well with our strategy.”
Crestpoint and Vestcor acquired 50 per cent stakes in downtown Ottawa’s four-building, 1.17-million-square-foot Place de Ville office complex, paying $350 million to Alberta Investment Management Corp., Brookfield Properties and CPP Investments in November.
Altberg told RENX last year it considers Ottawa a core growth market with risk-adjusted returns more attractive than for some other major Canadian cities.
More acquisitions to come
While Crestpoint has been active in Ottawa, it continues to seek out acquisitions across the country.
“We have an appetite to continue to grow in the industrial space, the residential space, and we’ve purchased office space in Ottawa,” said Altberg.
“We are very active and we are busy and there will be some things to talk about, but it’s best to leave those discussions until they close.”