Skyline Industrial REIT, a privately managed portfolio of Canadian industrial properties, and Rosefellow, a Montreal-based developer, released a video outlining how their unexpected partnership has led to mutual achievement between the two companies.
In the video, Mike Bonneveld, President, Skyline Industrial REIT, and Mike Jager and Sam Tsoumas, Co-Founders of Rosefellow, discuss highlights of their successful partnership as well as plans for upcoming industrial developments.
Skyline Industrial REIT, launched in 2012, owns and manages $1.52 billion in assets*, with a focus on warehousing, distribution, and logistics-centred properties along major transportation routes in Canada’s primary markets.
The REIT first partnered with Rosefellow in late 2020 as it sought a partner to develop purpose-built industrial assets in Montreal. Rosefellow was a relatively new firm at the time, having been incorporated in the previous year.
"It was a leap of faith,” said Mike Jager of Rosefellow. “No investors, no parcels of land in our back pocket. We literally mortgaged everything we had and put it into this business. We believe in this dream of building spec industrial properties in the provinces of Quebec and Ontario.”
Skyline Industrial REIT and Rosefellow saw significant potential in each other, with both companies having a long-term commitment to their development strategies.
Skyline Industrial REIT credits Rosefellow’s ingenuity and disruptor status as a major reason for the partnership's inception. At the time of Rosefellow’s launch, the spec build concept was more prevalent in cities like Toronto and Calgary than in Montreal. Skyline was impressed with Rosefellow’s commitment to bring a spec build strategy to its home city and leverage an opportunity that few other developers were taking advantage of.
Additionally, both firms prioritize agility and adaptability in their operations.
“One of the things that concerned us the most when we were starting out was being tied to a group that would result in a lot of red tape,” said Rosefellow’s Sam Tsoumas.
“It would have basically halted our development strategy from the beginning. After a couple of developments with Skyline Industrial REIT, we saw that wasn't the case. So, when we started talking about long-term relationship and partnership with Skyline, it was very easy for us to say absolutely, let's jump in.”
Together with F.I.T. Ventures, a Montreal-based private equity fund, the firms initially partnered on a development at 151 Avenue Reverchon in Pointe-Claire, Quebec. The over-325,000 square foot property was completed in June 2022 and is now long-term leased to Nespresso Canada.
Another notable development was a 275,000 square foot build at 6000 Avenue Victor-Davis, also in Pointe-Claire. The building has been 100% leased to Sleep Country (Dormez-Vous) and Steve Madden, and is a prime example of exceptional location with its high visibility from the highway.
The partners also have an approximately 588,000 square foot project underway in Kirkland on the west end of the Island of Montreal.
"We were competing against the other biggest developers in the city to bid on Kirkland,” said Jager.
“When we presented to the city, it was never about the actual buildings in themselves. It was about how we were going to deliver the best development to the city of Kirkland and to the neighbouring residents. I think that’s what set us apart.”
Skyline Industrial REIT and Rosefellow are also the sole partners in a nearly complete 320,000 square foot development at 3601 Avenue de la Gare, which includes a 226,000 square foot cold storage facility leased to Congebec.
Skyline Industrial REIT and Rosefellow view the development as a huge success story, with Congebec committing to the building at the beginning of the design phase, and the building’s status as Congebec’s largest cold storage facility in Canada in terms of height and cubic feet.
Expanding into Ontario
With their mutual success in the province of Quebec, the Skyline Industrial REIT-Rosefellow partnership has continued with an expansion into new development in Ontario. The partners are developing two properties in the Ottawa area: a 480,000 square foot two-building complex at 405 Huntman Drive in Stittsville (Kanata West; slated for completion in Q4 2024), and a 323,000 square foot development at 575 Dealership Drive, Ottawa (slated for completion in Q3 2025).
Skyline Industrial REIT has owned assets in the Ottawa market since the early days of the REIT. It sold much of its older, smaller bay product in 2021 as it transitioned to larger, more modern warehousing. Although development in Ottawa can present challenges, Skyline Industrial REIT believes it adds to the long-term viability of the asset due to generally minimized competition – which is what the Rosefellow team is observing in terms of the early leasing demand for its Stittsville (Kanata) and Ottawa builds.
During a recent multi-site tour with some members of Skyline Industrial REIT’s Board of Trustees, they remarked, “It's easy to pick these [Skyline-Rosefellow properties] out because they're the best-looking things around.” Skyline credits the compliment to Rosefellow’s consistency of design and quality, and choice of optimal architects and contractors.
With a string of successes since initially teaming up, Skyline Industrial REIT and Rosefellow plan to continue their partnership for the long term. Both firms are committed to providing best-in-class industrial properties to their valued tenants.
* As of March 31, 2023