Mondev and Foxmar Immobilier have acquired a loft-style office building and development land in the Montreal technology hub of Mile-Ex from Spear Street Capital for $10.5 million.

The 96,705-square-foot building at 6750 Esplanade Ave. has undergone significant renovations in recent years. It offers tenants flexible 24,000-square-foot floor plates, an abundance of natural light, interior bicycle storage, showers, underground parking, two loading docks, a terrace, and a cafe and lounge.

The property is strategically situated in a concentrated cluster of renovated loft office buildings that’s recognized as one of Montreal’s premier hubs for technology, gaming and artificial intelligence firms. It's easily accessible by public transit and is surrounded by mix of entertainment, retail, dining and green spaces.

“It's in an amazing location,” Mondev president and partner Michael Owen told RENX, which also attracted the interest of other potential purchasers. “I have a number of these loft office buildings and my vacancy rate happens to be extremely low.

"I think the building's got a ton of potential and I'm going to fill it up.”

Spear Street acquired 6750 Esplanade in 2019. Owen said it was mostly full and occupied by several smaller tenants at the time.

“They emptied it with the idea of finding a very large tenant, and the market went the wrong way on them,” Owen explained.

The building is currently 20 per cent occupied by smaller tenants. Clothing retailer Simons has office space in it but will be leaving when its lease expires later this year.

Optimism about the office market

“I think the office market has bottomed and, for as much fear is still in the system about office space, it’s going to make a very strong comeback,” Owen predicted. “It's already happening in Toronto and I think Montreal is a little bit late, but we'll catch up very quickly.

“The work from home trend is over. People here and there might still want to do that but, for for the most part, I think companies have realized it’s bad for productivity and bad for morale. 

“As soon as the big companies, the banks and the governments all mandate people to come back to the office, you're going to see a major shortage of office space.”

As much as Owen would love for a couple of tenants to lease all of 6750 Esplanade, the more realistic goal is for users occupying spaces in the 2,500- to 10,000-square-foot range.

“It could be startup companies, design firms, architects, engineers, and smaller AI and tech companies,” Owen said. “The AI hub of Quebec is literally around the corner.”

The 6750 Esplanade site also includes a surface parking lot and an abandoned building that will be demolished. Mondev envisions developing a building in the range of 80,000 to 100,000 square feet on that vacant land. 

The two purchasers

Montreal-based Mondev is an active developer of residential, commercial and mixed-use properties. It has contributed more than 8,000 homes and more than 100 commercial spaces to neighbourhoods around the city since the company was founded by David Owen in 1993.

Montreal-based Foxmar is a real estate investment firm with assets in Montreal, New York City and Florida. It specializes in loft office spaces as well as residential mixed-use and industrial properties.

“Foxmar and us have been partners for a number of years,” Owen said. “We own other loft office buildings with them.”

Spear Street in Canada

San Francisco, Calif.-headquartered Spear Street is an owner and operator of office properties in the United States, Canada and Europe. It was formed in 2001 and has since invested in more than 85 properties representing more than US$11 billion in total value.

Spear Street also owns the 367,000-square-foot O Mile-Ex office complex at 6650-6666 Saint-Urbain St., located a block away from 6750 Esplanade.

Spear Street just acquired an 18-storey, 187,987-square-foot office building at 141 Adelaide St. W. in downtown Toronto’s Financial District from Epic Investment Services for $95.25 million.

The company also owns three buildings in Vancouver totalling 366,300 square feet and Calgary’s 356,000-square-foot The District at Beltline. 

Mondev’s acquisition and development pipelines

Owen said Mondev expects to close on another office building similar to 6750 Esplanade and in the same area in the near future. 

Mondev has delivered approximately 1,000 new purpose-built rental apartment units annually over the last several years and plans to continue at that pace, if it’s still feasible, despite challenging market conditions. 

The first tenants have just moved into Joseph -- a new five-storey, 156-unit apartment building with a gym and outdoor swimming pool at 3420 St. Joseph Blvd. E., across the street from Lafond Park -- in Montreal’s Rosemont-La-Petite-Patrie neighbourhood.

The first of approximately 1,000 rental units, ranging in size from studios to four-bedroom townhouses, will soon be available as part of a two-city-block development called Univert that will also include a small retail component in the southern Montreal borough of LaSalle.

“You could live in this thing forever,” Owen said. “You could go to school and be in a studio and then get married and live in a two-bedroom and then move into a townhouse.”