451 Phillip St., part of the Factory Square office complex in Waterloo which has been acquired by Montez Corp. (Courtesy Montez)

Montez Corporation has acquired the 526,235-square-foot Factory Square office complex in Waterloo, Ont. for $122.8 million as part of its strategy to focus on technology hubs.

CanFirst Capital Management, on behalf of CanFirst Industrial Realty Fund V and CanFirst Industrial Realty Fund VI, sold the buildings at 440, 451 and 455 Phillip St.

The total site size is 34 acres and forms part of Waterloo’s Idea Quarter, a still-evolving district which is planned to offer 3.2 million square feet of space employing 16,500 tech workers and 20,000 co-op students.

Factory Square is 92 per cent occupied and Montez president and chief executive officer Manfred Lau told RENX his company has already signed a lease deal with a new tenant since acquiring the complex in mid-May.

Lau said current Factory Square tenants are involved with server warehousing, advanced lab and manufacturing processes, research and development, artificial intelligence, and managed detection and response, among other tech-related sectors.

Factory Square in major tech hub

There’s a light rail transit line stop adjacent to Factory Square, which is also close to the University of Waterloo, David Johnston Research + Technology Park, Wilfrid Laurier University and Highway 85.

“We really like this asset and it highlights our various investment themes,” said Lau. “The proximity to the University of Waterloo and Wilfrid Laurier University provides the opportunity for activation of the common space, talent recruitment and the continuation in support of various co-op programs.

“This is a really dynamic ecosystem that includes over 150 research centres, accelerators and incubators, with a growing commercialization of its technology, innovation and entrepreneurialism.”

Lau believes Factory Square, Idea Quarter and the surrounding area are becoming an increasingly important part of the economy locally, provincially and nationally.

Montez marks 20th anniversary

Montez is an integrated multi-asset real estate investment firm, developer and asset manager that invests in office, industrial, retail, multiresidential, hotel and mixed-use assets across Canada on behalf of institutional investors.

The Toronto-based company also invests alongside its clients.

This is Montez’s 20th year in business and it has more than 25 million square feet of assets under management across various funds and segregated accounts, valued at just over $7 billion. This includes about 10 million square feet of active development assets.

“Most of our developments and most of our investments try to latch on to some form of what we call infrastructure — such as a university, a major transit investment, a hospital and those types of things — because we see spinoff activity off of that,” said Lau.

Land holdings, development pipeline

Montez has an active development pipeline in various asset classes across multiple projects. It also owns urban land for future multiresidential developments and suburban land for future industrial developments. Some sites are going through the entitlement process.

Lau said Montez has annually averaged around $500 million to $600 million in combined acquisitions and dispositions over the past 10 years.

With Montez’s interest in tech-related spaces, it’s no surprise Toronto, Vancouver, Montreal, Ottawa and Waterloo are among its key markets.

As with many commercial real estate companies, Lau said Montez has become more active with industrial and multiresidential assets in the past couple of years.

Montez also has a small but growing interest in alternative real estate assets, including film studios and cold-storage facilities.