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Groupe Inspire digs deep to find value-add properties

12300 Boulevard Albert-Hudon in Montreal, which was acquired, re-entitled and then leased by Montreal's Groupe Inspire. (Courtesy Trimont)

Groupe Inspire founder and president Sébastien Gariépy spent 10 years as a real estate appraiser before deciding to focus his attention full-time on investing in and developing industrial, commercial and multiresidential properties in and around Montreal.

“I had a vast network of people I knew in real estate and, most importantly, very good knowledge of all the different types of assets and the links between them and how to calculate values,” Gariépy told RENX.

“That led me to grow a portfolio of more than 250 units and almost a million square feet of industrial with my own capital.”

Groupe Inspire’s nine-property multiresidential portfolio ranges in size from six-unit apartments up to a six-building complex with 96 units.

Its eight industrial properties range in size from 30,000 to 360,000 square feet.

Acquired right for property in Montreal North

Terrebonne, Que.,-based Groupe Inspire focuses on value-add investments and seeks to find value in properties overlooked by other investors.

This was the case with the $3-million acquisition earlier this year of an older 42,000-square-foot industrial property at 12300 Boulevard Albert-Hudon in the borough of Montreal North.

Germando Mazzotta was a broker for Sutton Group at the time (he has since launched a new commercial real estate brokerage firm called Trimont with partners Jimmy and Peter Mouhteros) and facilitated the Montreal North building transaction.

Mazzotta represented both the vendor and the purchaser in the deal and was instrumental in its completion, which took about six months due to entitlement difficulties. 

Mazzotta told RENX the City of Montreal had rezoned the street where the building is located from industrial to commercial and residential.

So, Groupe Inspire entered lengthy negotiations and was able to obtain an acquired right from the city to operate the property as an industrial building.

While it took plenty of work other potential purchasers weren’t willing to put in, Gariépy said the deal ended up as a win for his company, the private vendor, the City of Montreal and the tenant which recently moved into the building.

“It's definitely not a class-A industrial building, but Sébastien (Gariépy) brought a property to market at below-market rates and helped another business survive,” Mazzotta said of the building’s new tenant, which he described as a young and growing e-commerce company specializing in furniture accessories.

Gariépy said the property had been minimally managed in the past and Groupe Inspire made significant improvements to make it more appealing.

“We can continue to operate the property as industrial, but at a point in five, 10 or 15 years, we will be able to redevelop it as residential,” said Gariépy. “That’s a nice potential upside for later.”

Montreal’s shrinking industrial footprint

Groupe Inspire founder and president Sébastien Gariépy. (Courtesy Groupe Inspire)

Mazzotta said the city’s entitlement restrictions are causing Montreal's industrial footprint to slowly shrink as users are having increased difficulty obtaining permits to operate their businesses in industrial parks. This is prompting them to leave the Island of Montreal.

“There aren’t many investors out there like Sébastien that are going to take this type of tricky transaction and just spearhead it by running through the exercises and jumping through all the hoops that the city requires,” Mazzotta noted. 

“He has an excellent team on the admin side, as well as on the legal side, so I think that really helped — apart from him being very creative with this transaction.”

Groupe Inspire continues to be in acquisition mode, according to Gariépy.

“We're looking for value-add deals and repurposing industrial and multires assets, and the bigger the better. We're really into this new vision of creating communities.

"We're really trying to develop innovative ideas to create sustainable communities.”

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