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Downtown Montreal continues to attract development dollars

Declaring its “views on the importance and pertinence of downtown Montreal have not changed,” dev...

IMAGE: Kevric is making major renovations to the Place Bonaventure office and commercial property in downtown Montreal. (Courtesy Kevric)

Kevric is making major renovations to the Place Bonaventure office and commercial property in downtown Montreal. (Courtesy Kevric)

Declaring its “views on the importance and pertinence of downtown Montreal have not changed,” developer Kevric is forging ahead with redevelopments of two of Montreal’s major office buildings, Place Bonaventure and 600 de la Gauchetière W.

Sébastien Hylands, vice-president, development at Kevric, said modernization of the massive Place Bonaventure (with 1.354 million square feet of office space) at 800 de la Gauchetière W. began in 2015 but advanced significantly in 2020, during the height of the pandemic.  Major changes have been made to the former exhibition halls that were once home to car shows and to the monumental façade of the 1960s development.

Hylands was speaking at a session on the continuing relevance of the downtown core during the Montreal Real Estate Strategy & Leasing Conference, held virtually on Oct. 6.

The former Place Bonaventure exhibition halls, which comprise more than 245,000 square feet, are being redeveloped into an open area with ceilings of 32 feet and windows of 28 feet “that would be impossible to recreate in the middle of downtown,” Hylands said.

A potential usage is an office campus that could occupy the entire space on one floor which, he says, would create a collaborative work environment where everyone has room to breathe.

Kevric is “in advanced negotiations” with potential tenants, he said.

Kevric’s plans for 600 de la Gauchetiére

New windows have been added to the formerly windowless facades on de la Gauchetière and Robert Bourassa Boulevard, paving the way for street-level stores of 1,000 to 10,000 square feet with street access.

Kevric is also working on plans to transform 600 de la Gauchetière, the current headquarters of the National Bank. The building will be vacated once the bank moves into its new head office at 800 Saint-Jacques St. W., now under construction.

The developer acquired 600 de la Gauchetière, which has 710,000 square feet of office space, in 2019 and is now working on plans to reconfigure access to the 28-storey building so that it can serve as a link between downtown and the Quartier International district.

Another goal is to “create a unique working environment” in the 38-year-old building.

People still want to live downtown

Downtown Montreal is holding up well despite the pandemic, said Glenn Castanheira, executive director of the downtown commercial development group SDC Montréal centre-ville, which is similar to a business improvement association.

IMAGE: Le Sherbrooke is a downtown Montreal condominium development by Broccolini. (Courtesy Broccolini)

Le Sherbrooke is a downtown Montreal condominium development by Broccolini. (Courtesy Broccolini)

Castanheira said it is false to say people are leaving downtown.

In fact, in Q1 2021, fewer of the downtown’s 100,000 residents (20 per cent) expressed a desire to move, compared with 24 per cent of Montrealers outside downtown, 29 per cent of Laval, North Shore and South Shore residents and 28 per cent outside the Montreal area.

The attractiveness of downtown remains unchallenged, said Castanheira, noting he witnessed huge lineups at the recent sales launch of Broccolini’s Le Sherbrooke condo development downtown and a high number of sales despite the absence of foreign buyers.

Le Sherbrooke will be built on a 70,000-square-foot parcel of land Broccolini acquired in 2019 at the corner of Sherbrooke and Guy Streets.

With a total building area of 490,000 square feet, the 25-storey Le Sherbrooke will have 562 units and is set for completion in 2025.

Return to office brings traffic woes

Elsewhere downtown, Castanheira said at least 40 per cent of downtown office workers have returned to the office.

However, traffic congestion has returned to pre-pandemic levels despite the fact many downtown workers are absent. This is a major cause for concern, he said.

The model of working at the office from 9 to 5 five days a week is gone and a hybrid format that will combine work from home and at the office is here to stay, he said.

Castanheira said attractive work environments will be needed to attract and maintain talent and employers will no longer be able to merely use salaries and perks such as pension funds to compete for employees.

It will be “how cool it is to be at work? And when we say cool, it’s not just the tech geek that’s programming the video game. It’s the junior lawyer that you’re trying to bring in as a partner,” he said. “They need an environment that distinguishes itself from the competition.”

Montreal’s retail begins to recover

Ste. Catherine Street, downtown’s main retail artery, is showing a strong recovery, Castanheira said. The street’s commercial inactivity/vacancy rate was 24 per cent in Q1 2021, compared with 28 per cent for 5th Ave. and 40 per cent for Madison Ave. in New York City.

However, the latest data shows Ste. Catherine’s vacancy rate has declined to 11 per cent.

“It’s very encouraging,” he says. “There’s a strong level of confidence in urban retail, in the experience, in entertainment for downtown. The pipeline of new tenants is very interesting on the major arteries.”

On the other hand, the shopping mall situation downtown is dicey, particularly for stores underground, and will remain challenging for some time to come, he said.

Luc Sicotte, market leader and senior vice-president, Quebec region, Colliers International, said Montreal’s downtown will be one of the most attractive in North America in a few years, with the opening of the REM light-rail system, hospital and university investments, the new Champlain Bridge and Turcot Interchange.

Downtown still matters, Sicotte said. “It’s not virtual; it’s real.”

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