OFFICE MARKET REPORT | 3rd QUARTER 2021
Investments
During the third quarter of 2021, the total amount of commercial sales across all asset classes reached $3,507,931,635, with 673 transactions valued at $1 million and over. The multi-residential sector continues to be the most active asset class with 37.9% of all investment activity for a total value of $1,328,961,182, followed by the industrial sector which accounted for 18.6% of all activity with a total value of $653,051,073.
Only 19 office sale transactions were recorded this quarter, but with the sale of the 1000 de la Gauchetière to Groupe Mach and Groupe Petra for a value of $482,094,466, the office investment volume reached $617,501,715 compared to $101,040,585 the previous quarter. The other notable office transactions included the sale of 275 Viger East in Montréal ($74,000,000), 385 Bouchard Boulevard in Dorval ($15,000,000), 334 Avro Avenue in Pointe-Claire ($10,000,000), 8777 Transcanada Highway in Saint-Laurent ($6,300,000) and 200 Saint-Paul Street West in Montréal ($5,060,000).
The overall capitalization rates (OCR) for class A office buildings in Downtown Montréal have remained at 5.1% since the second quarter of 2020, with an average price per unit of $438.00 psf in the third quarter compared to $445.67 the previous quarter. This is up from $427.55 psf a year ago.
Investors remain confident in Montréal's economy and recovery.
While the transaction is yet to be finalized, the major news comes from Canderel in partnership with Groupe Mach, Blackstone and other partners looking to buy Cominar REIT in what could be one of the largest real estate deals in Québec history if the deal goes through. The transaction would encompass the whole Cominar portfolio including office, retail and industrial properties valued at $5.7 billion.
Allied Properties REIT announced back in August that they had completed the acquisition of Gare Viger and the adjacent developable land, representing the existing urban office component of Jesta Group’s Place Gare Viger. The forward purchase of the urban office building under construction is expected to close in the second half of 2022, subject to various conditions of closing.
Another notable announcement was the sale of the 600 de Maisonneuve West (also known as the KPMG Tower) to Groupe Mach and Groupe Petra in November. This level of activity on the office investment sector is a clear indication that investors remain confident in Montréal’s economy and recovery.
