RoseFellow will spend $93 million to build a 425,000-square-foot industrial building on spec in Candiac on the South Shore of Montreal, part of a near-quarter-billion-dollar investment in the region.
The Montreal developer will also construct two industrial buildings with a combined 800,000 square feet of space at a cost of about $150 million on land recently acquired in Beauharnois, southwest of Montreal.
Construction of the Candiac building, which will have a 40-foot clearance, is set to begin at the end of 2022 with delivery in summer or fall 2023.
“We really like Candiac because of the access to Highways 15 and 30,” says RoseFellow principal Mike Jager. “There’s huge demand on the South Shore now, so we think we can do great things on the site.
“It won’t take long once we start building that we’ll be able to sign a tenant.”
Former Owens Corning property
The 1.057-million-square-foot site at 131 Montcalm Blvd. North near D’Inverness Street was formerly home to an Owens Corning facility that will be demolished.
Part of the site will become a public park of about 100,000 square feet to be designed by Candiac.
“Montcalm in recent years has become a focal central point for Candiac,” with plenty of new residential development, says RoseFellow co-principal Sam Tsoumas. “This park was very important to them.”
Tsoumas expects the Candiac building will suit “basically a mix of everything,” for multiple tenants, including as a regional head office, R&D, manufacturing or warehousing.
BGO partners on Beauharnois buildings
In Beauharnois, RoseFellow teamed up with BentallGreenOak (BGO) and F.I.T. Ventures to acquire a 1.98-million-square-foot site on Turnbull Street where it will build 350,000-square-foot and 450,000-square-foot buildings.
The LEED-certified buildings will have clearances of 40 feet and are slated for delivery in spring 2023.
Sold by the City of Beauharnois, the site is close to the IKEA distribution centre on Highway 30.
Tsoumas says RoseFellow is in discussion with Fortune 500 companies about potential leases for the buildings, including a possible long-term lease for one of them.
“I believe without a doubt that both buildings will be fully leased before we complete construction,” Jager says. “The buildings are easily sub-dividable but with the demand we’ve had, we’ve noticed every request is for over 300,000 square feet, which is pretty amazing for our province.”
BGO plans to acquire the development upon stabilization (after construction and with tenants in place).
“They were looking to expand their development platform in the province of Quebec,” Jager says of BGO. “We’ve had a great relationship with the team in Toronto since we started RoseFellow. We thought that this would be the one that would be a perfect fit for both groups.”
Third development site in Beauharnois
After acquiring the large Beauharnois site, RoseFellow acquired a second adjacent site of about 297,000 square feet from a private individual in an off-market sale. It is also on Turnbull Street.
RoseFellow will spend $25 million on a 144,000-square-foot, multi-tenant development that will have 32 feet of clearance. Construction begins in March and the building is scheduled for completion in fall 2022.
Tsoumas says the industrial market is booming throughout the Greater Montreal Area (GMA), but the South Shore seems to have especially strong demand. “The South Shore has a lack of quality available sites in the short term.”
He foresees demand will surpass availability for 2022. While there are a few developers putting up buildings, by the time they’re built they’re off market, he notes.
“We also see the rental rates increasing another 10 to 15 per cent by the end of the year.”
Other RoseFellow initiatives
Elsewhere, Jager says RoseFellow is looking to add another 500 residential units over the next 18 months on the island of Montreal.
The developer currently has two other residential developments underway on the island, a St. Laurent project in which tenants will move in on July 1 and an Anjou project scheduled for delivery in July 2023.
“Anywhere in the GMA where we see an opportunity, we will jump on it,” he says.
Tsoumas adds RoseFellow is aiming “to make a big push into the Ontario market,” with the acquisition of a few million square feet in the GTA.
“We like the metrics; we like the story. It’s similar to Montreal, just a larger market. We’re working on a few acquisitions.”
EDITOR’S NOTE: This article was updated to specify that Skyline Commercial REIT is one of the partners in the RoseFellow Candiac development.