Bids set to close on Montreal office building, as market heats up

The Aldred Building in downtown Montreal is for sale with bids closing next week. (Courtesy Cogir)

CBRE says Montreal is heading for its best quarter of office building sales since before the pandemic struck, with Q3 office investments projected to top $614 million. And with the imminent sale of three downtown-area office buildings including the historic Aldred Building in Old Montreal, the fourth quarter shows no sign of a slowdown.

Bidding on the Aldred Building, also known as 507 Place d’Armes, is scheduled to close next week, says Scott Speirs, CBRE executive vice-president and Montreal lead for its National Investment Team. 

The 23-storey art deco tower with 170,000 square feet of office space was completed in 1931 and is sometimes considered Montreal’s first skyscraper.

“It’s a really spectacular building,” but with a current vacancy of about 30 per cent, is “an asset to be repositioned,” Speirs says. “The exterior truly is extraordinary. It is really an architectural landmark in the city. It looks like a miniature version of the Empire State Building.”

CBRE is working on the sale of two other downtown office buildings that are projected to close by year end or in Q1 2022. Speirs declined to provide information on the other properties but noted “both will be at very strong pricing.”

Tour KPMG shows investors “bullish”

Speirs says sales that include the early November sale of downtown Montreal’s Tour KPMG, by BentallGreenOak to Groupe Petra and Groupe Mach, indicates there has been a return to office transactions after a major slowdown in investment activity during the pandemic.

The 33-storey class-AA building with 522,000 square feet of office space, along with the 150,000-square-foot Promenades Cathédrale underground shopping mall, sold for an undisclosed price.

“Without a doubt, it’s partially pent-up demand,” Speirs says of the renewed interest in office investment. “The other dynamic in play is just how expensive some of the other asset classes have become, particularly industrial and multifamily.” 

Speirs says investors are taking a long-term view on offices and are seeking increased exposure to the Montreal market. While office vacancy rates are high, the long-term view is that the office “is absolutely intrinsic to work life” and the asset class will perform well in the future.

“Investors are feeling bullish on the prospects for Montreal going forward. Leading into the pandemic, Montreal and Quebec had one of the strongest performing economies in the country and that momentum is now resurfacing as we emerge from the pandemic.”

Built in 1987, Tour KPMG at 600 de Maisonneuve Blvd. W. was previously known as Place de la Cathédrale and Maison des coopérants. It’s also known locally as the “cat ears” or “Batman building,” given the shape of its rooftop. 

Prior to being owned by BentallGreenOak, Tour KPMG was owned by Oxford and CPP Investments. 

The building has Metro access and will soon by connected to the REM light-rail system. Its vacancy rate is in the 10 to 12 per cent range, marginally below the average downtown vacancy rate.

Speirs says there was strong interest in Tour KPMG from both local private capital and Canadian institutional capital.

The Tour KPMG acquisition “reaffirms our strong confidence in the market for major office buildings in the heart of downtown Montreal,” Patrice Bourbonnais, president and chief operating officer of Groupe Petra, and Mach president Vincent Chiara said in a shared statement. 

Other major Montreal office trades

CBRE says the projected $614-million-plus in Q3 2021 Montreal office investment compares with $136 million in the same quarter a year earlier. It represents the highest office building investment volume since a near-record $760 million in Q1 2020 – just before the pandemic struck.

Downtown class-A office towers transactions in Q3 included 1000 de la Gauchetière W. and Place Gare Viger at 530 Saint Hubert St.

In one of the most important transactions of 2021, Groupe Mach and Petra acquired the 51-storey 1000 de la Gauchetière, which was owned by Ivanhoé Cambridge, the real estate subsidiary of the Caisse de dépôt et placement du Québec.

Allied Properties REIT made the $250-million purchase of the office component of Jesta Group’s million-square-foot Place Gare Viger redevelopment in Montreal. The deal includes the 123-year-old Gare Viger, a new office tower to be anchored by Novartis and adjacent developable land. 

Another major recent office investment downtown was LaSalle Canada Property Fund’s acquisition of a 50 per cent stake in Ivanhoé Cambridge’s Maison Manuvie office tower. 

“What we’re seeing trade are assets that are well-leased, with strong locations, generally with longer lease terms and strong credit tenants,” Speirs says. “Also, we’re seeing a significant trend around transit. Investors are looking past the short-term and really buying assets with great long-term value.”

In its Q3 Office Insights report, JLL notes the recent downtown Montreal transactions “serve as promising indicators for long-term bets on the success of the Montreal office market.”

And in its second office market report for Montreal, Avison Young says “there is a sense that we should see larger transactions in the coming months as the economy picks up and workers return to the office.”



Danny is a multiple award-winning journalist based in Montreal, who has written for about 75 magazines and newspapers in Canada and the U.S. His credits include The Globe and Mail,…

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Danny is a multiple award-winning journalist based in Montreal, who has written for about 75 magazines and newspapers in Canada and the U.S. His credits include The Globe and Mail,…

Read more



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