One of the most significant tech hubs in Montreal, the recently redeveloped O Mile-Ex complex, has been sold to San Francisco-based Spear Street Capital by the partners who redeveloped the property.
The deal was announced Monday morning. Financial terms were not disclosed.
O Mile-Ex is located at 6650–6666 Saint-Urbain in the Marconi-Alexandra district, which is now more commonly known as Mile-Ex. The 400,000-square-foot former textile mill was acquired in 2014 and fully converted by TGTA and three partners, who also financed, designed, developed and managed the project.
The renovations cost about $60 million, according to published reports.
Among the partners are Fondaction and the Ville de Québec pension funds.
O Mile-Ex welcomed its first tenants in 2016.
“There’s a lot to like about this transaction, which reflects the market’s strong interest in our building and for Montreal in general,” said Martin Galarneau, a partner at TGTA, in the release. “Spear Street Capital’s bid was the most attractive offer and the most reassuring in terms of the future of the project.
“Given their experience and their portfolio of assets, we believe they’ll be able to uphold the vision that has guided us in designing, developing and managing this one-of-a-kind workspace that contributes to the Montreal of today and tomorrow.
“We would also like to applaud our institutional partners for their outstanding support and, especially, the trust they placed in us from the outset of this project.”
O Mile-Ex a major AI, tech hub
Recognized as Canada’s biggest artificial intelligence hub, the two-building, five-storey complex houses some 20 tenants, including Mila, IVADO, Thales and Element AI.
Other companies from a number of tech-related sectors, including video games (Behaviour Interactive), multimedia production (4U2C, a division of Cirque du Soleil) and life sciences (Rogue Research), also have offices there.
“When we partnered with TGTA in 2014 to acquire the two buildings that now make up O Mile-Ex, they were almost entirely vacant and located in a devitalized area,” said Stephan Morency, Fondaction’s chief investment officer, in the release.
“A few years later, these buildings are the focal point for a neighbourhood that hosts the best teams in the world in terms of artificial intelligence and that helps make Montreal a leader in the field.
“This is a perfect example of urban renewal, which is at the heart of our investment strategy in real estate; we are very proud of it.”
The buildings were originally constructed in the 1960s for Tricots Main Inc., and operated as textile factories for almost a half century before the business finally closed in 2008.
TGTA says its goal in the renovation was to help its tenants attract top talent by “creating a unique complex that’s more of a living environment than a conventional place of business.”
The project’s amenities include a gym, board game area, daycare and a cafe operated by chef Martin Juneau, owner of Restaurant Pastaga. The site includes both indoor and outdoor parking.
This summer, a park and greenspace was added to the back of the building on a site that was originally intended as a parking lot.
“With our flexible structure and highly skilled team, we have the agility to seize opportunities that pop up on the market like we did with O Mile-Ex,” Galarneau said in the release. “This deal will allow us to pursue our mission of carrying out other ground-breaking projects in Montreal.”
About Spear Street Capital
The O Mile-Ex investment is not Spear Street Capital’s first venture into Canada.
The company already owns three other office properties across the country; the 630,000-square-foot Northfield Park complex in Waterloo, Ont.; the 365,000-square-foot Willingdon Park centre in Vancouver; and The District at Beltline, a 356,000-square-foot office development in Calgary.
Its Canadian holdings have a tenant base that tilts heavily to the tech sector.
It also owns 15 other properties in the U.S., Ireland and the United Kingdom, according to its website. Together, the portfolio comprises well over eight million square feet of space.
Spear Street Capital was established in 2001 and currently maintains offices in San Francisco and New York.
Over its history, Spear Street Capital has invested in more than 70 properties in the United States, Canada and Europe, representing over $7.5 billion in total value. Spear Street Capital owns 100 per cent of most of its properties, but has in some cases invested with partners.
Its properties include single- and multi-asset portfolios, large corporate campuses, partial and full development projects. Sold assets to date represent over $5.5 billion in total value.
TGTA is a real estate development and investment firm based in Montreal since 1989. The firm is owned by Galarneau, Bernard Thibault and Guy Trudeau.
Known for its expertise in office and residential buildings, TGTA also has extensive experience in commercial real estate including commercial, industrial, seniors’ residences, hotels and land development.
Over the past 10 years, TGTA has focused its efforts mainly on Montreal, but has also been active in Southeast Florida.
In that time, TGTA has gained significant expertise in the requalification of sites and buildings in sensitive areas of the city.