Montreal’s real estate scene is more dynamic today than at any time during the past five decades, says Jean Laurin, CEO of the real estate brokerage and advisory group Devencore.
Laurin, who has been with Devencore since 1973, made that claim in a recent blog post on the company’s website.
According to Laurin, the city is better-positioned than it has been for a long time and is ascending on virtually every front, including office and condo development, critical infrastructure overhauls, investment activity, economic conditions, population growth and intellectual capital.
In the future, “we may very well look back on this period in Montreal’s evolution and recognize it as marking a truly momentous turning point.”
Artificial intelligence, gaming and app businesses have been fuelling much of the demand and growth, Laurin said in an interview with RENX.
A city full of “smart people”
Montreal’s major strength is the city’s four universities which “recruit and attract a lot of smart people and get the attention of a lot of international investors.” As increasing numbers of students come to Montreal, some of their parents are looking to invest in Montreal’s residential sector.
He noted the rest of the country’s real estate scene is also looked upon favourably by international investors.
“Canada is a safe place to park dollars and investments (given its good investment returns, low security issues and solid banking system),” he said. “We’re welcoming to outside investors or people that want to move to the country.”
Laurin said Devencore is the largest privately held, employee-managed real estate broker and advisor in Canada. It is the only Montreal-based firm of its kind.
Founded in 1972 in Montreal, Devencore soon expanded across the country and developed a strong consulting group in the 1970s. “We thought there was a need and an opportunity to provide that kind of expertise to potential clients.”
Devencore ends relationship with NFK
The company now has about 150 employees, with the Montreal office the largest with about 70 employees. There are also offices in Vancouver, Toronto, Calgary, Edmonton, Moncton, Halifax, Québec City and Victoria.
Much of the business is conducted in Ontario and Quebec, whose real estate markets “are turbo-charged,” but Laurin said “business is increasing on the West Coast.”
For several years, Devencore had a partnership with New York City-based Newmark Knight Frank and was known as Newmark Knight Frank Devencore or NKF Devencore.
But Devencore terminated the relationship with NKF “because it didn’t really respond anymore to what we were looking for,” he said.
“We were looking for better collaboration, and we didn’t think that it was in our best interests or the interests of our clients to maintain that relationship. We just decided it was time for us to move on, which we did.”
The firm has since rebranded under its original Devencore name, but last year formed a strategic alliance with Houston-based Transwestern, which specializes in agency leasing, asset services, occupier solutions, capital markets and research. With that alliance, “we’re in a better position to respond to our clients’ needs.”
Selling Montreal’s 600 de la Gauchetiére
Laurin said Devencore increasingly sees its role as being a consultant rather than a broker. “Clients are looking for people that understand the market, understand the real estate industry and how you can negotiate and obtain better conditions,” while also considering such factors as finance, operations, HR and branding.
“We probably have the largest consulting group that’s working at supporting corporate decision-makers in analyzing whether they should own, rent, whether they should get something built or redeveloped. So we understand the real estate business from a development perspective and we apply that talent and knowledge for the benefit of the occupier.”
Among its bigger transactions, Devencore is currently involved in the sale of the National Bank’s office building on 600 de la Gauchetière St. W., a 28-storey tower built in the early 1980s. The bank is building a new 46-storey head office with more than one million square feet on Saint-Jacques Street West.
In a separate transaction, the sale of it’s neighbour at 700 de la Gauchetiére is pending final approvals. Allied Properties REIT(AP.UN-T) is buying that building from Dream Office REIT (D.UN-T) for $322.5M.
Laurin says Montreal’s downtown area is more vibrant than it ever has been, in large part due to “tremendous growth” in the residential sector.
Ten years ago, a number of sites were available on René Lévesque Boulevard between Peel Street and Atwater Avenue. However, the bulk of these sites have now been developed, primarily into residential housing.
“Part of it is demography. As families mature, kids leave home and then they need a place to live,” he says. “Downtown is a sector that’s definitely an attraction to the younger generation.”
Infrastructure fuels development
Laurin says the REM light-rail transit system now under construction will promote additional development “because whenever you touch the infrastructure of a city that by itself triggers development activity.”
Other ongoing major infrastructure projects like the new Champlain Bridge, which should be completed this summer, and the Turcot Interchange revamp will also pay dividends, he says.
He says several real estate projects on the radar will continue to promote development, including Groupe Mach’s redevelopment of the CBC-Radio-Canada land in the east end of downtown into the 4.5-million-square-foot Quartier des Lumières.
The project is slated to include 3,000 residential units, about one million square feet of office space and 600,000 square feet of retail space.
The area “has been quieter in the last 10 years. I suspect we’re going to start seeing a little more activity from that sector.”