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Shelborne acquires $95M eight-building industrial portfolio

Sale-leaseback transaction for Olympia Tile sites from Burnaby to Quebec City

Olympia Tile distribution centres in Toronto (top) and Montreal are among eight Canadian industrial/commercial buildings sold to Shelborne Capital in a sale-leaseback transaction. (Courtesy Shelborne)
Olympia Tile distribution centres in Toronto (top) and Montreal are among eight Canadian industrial/commercial buildings sold to Shelborne Capital in a sale-leaseback transaction. (Courtesy Shelborne)

Shelborne Capital has acquired eight single-tenant industrial buildings for $95 million from Olympia Tile as part of a nationwide sale-leaseback transaction.

“The portfolio represented an opportunity for Shelborne to geographically diversify its industrial holdings and, at the same time, acquire contractual long-term income through a sale-leaseback arrangement,” president and chief executive officer Nathan Bierbrier told RENX in an email interview. 

“It also allowed us to enter into key markets across Canada.”

The properties are in Burnaby, Calgary, Hamilton, Toronto, Ottawa, Montreal and Quebec City and total 650,573 square feet.

Terms of the deal

Olympia was founded by the Reichmann brothers in 1956 and has grown to become the exclusive tile distributor for more than 75 foreign manufacturers on five continents, making it the largest importer of tile in Canada and a leading supplier in the United States. 

It has more than 900 employees and more than 50 distribution, showroom and manufacturing facilities occupying more than 4.2 million square feet.

Bierbrier said Olympia felt it was advantageous to unlock the capital that was tied up in its real estate assets and decided to sell.

Olympia will lease back the portfolio for an initial term of 10 years with varying rental rates. The leases are all triple net and carefree to the landlord.

Shelborne’s growth

Shelborne was founded in 2016 by Bierbrier as an investor, owner and manager of income-generating real estate.

It owns and operates more than 50 residential and commercial properties totalling approximately 2.5 million square feet.

Shelborne’s investors are comprised of individuals and private groups and the Toronto-headquartered company takes a stake in each acquisition alongside them.

Shelborne acquired a 20-building industrial portfolio totalling 549,962 square feet on 52.5 acres of land in Barrie for $90 million two years ago.

“We feel that our success over the past few years was by being nimble and looking at any asset class that has potential for value creation,” said Bierbrier.

“The environment of high interest rates has made it difficult for many transactions to close. We see a very quiet landscape with few bids being placed on listings. 

"Notwithstanding, we believe that this will create opportunities for strong buyers and we continue to search for opportunities.”

Proposed Scarborough condominium development

Shelborne recently submitted a development application for towers that rise to 24 and 21 storeys from a six-storey podium for a mixed-use condominium at 2157 Lawrence Ave. E., at the southeast corner of Birchmount Road, in the Toronto suburb of Scarborough. 

The proposed Kirkor Architects and Planners-designed project would accommodate: 526 residential units; more than 7,700 square feet of retail space; approximately 22,600 square feet of interior and exterior amenities; three underground parking levels for 264 vehicles; and 395 spaces for bicycles. 

The development would intensify a site currently occupied by a low-rise strip mall with 19 commercial units totalling 18,192 square feet and a surface parking lot.

Shelborne also owns the nearby 12-storey, 142-unit McGregor Park Manor Apartments building at 2185 Lawrence Ave. E.

Shelborne plans to submit development applications for other sites it owns in the upcoming year, according to Bierbrier. 

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