A Toronto-based real estate investment firm has purchased four class-A industrial buildings in Ottawa for more than $50-million.
Crestpoint Real Estate Investments closed the deal with Ottawa’s Huntington Properties earlier this month.
The four buildings, totalling about 220,000 square feet, are all leased to single tenants. The total sale price was $50.25-million, making it one of the largest real estate transactions of the year in the capital.
The four buildings are:
- A 78,000-square-foot property at 140 Iber Rd. leased to custom packing firm Induspac
- A 72,000-square-foot property at 2355 St. Laurent Blvd. leased to Advanced Business Interiors
- A 46,500-square-foot property at 1100 Algoma Rd. leased to Medical Pharmacies Group
- A 21,000-square-foot property at 130 Iber Rd. leased to electronics manufacturer Lloyd Douglas Solutions
“For us, this is a cashflow play,” Crestpoint head of investments Elliott Altberg said Tuesday.
“The macro bet is obviously that these businesses will be more profitable over the next five years, and they’ll be able to support higher rents with similar margins. There is an insatiable appetite for tenant spaces like this.”
Crestpoint owns industrial properties in several major Canadian markets, but had only a small footprint in the National Capital Region prior to the latest deal.
With Ottawa emerging as a growing e-commerce distribution hub thanks to its close proximity to both Toronto and Montreal, Altberg said Crestpoint is looking to grow its presence in the region.
CBRE noted that Ottawa’s availability rate dipped to three per cent in the second quarter while average net rents hit a record $12.06 per square foot, with available industrial land being snapped up and vacant space leasing at a premium.
“It’s rivalling some of the best markets in Canada,” Altberg said. “This (transaction) is not just a one-off. We’re committed to Ottawa, and I think we will continue to look at it as opportunities come up. The issue is it’s tough to find opportunities, and when they come up, they’re usually very highly sought after. It’s really tough to compete.”
Crestpoint has been ramping up its investments in the National Capital Region in recent years.
In March 2020, the firm purchased a 50 per cent stake in a 26-storey office tower at 234 Laurier Ave. W. whose tenants include Shopify. The company also owns three office buildings in Kanata.
Crestpoint began investing in the residential market late last year. One of its largest investments so far is a partnership with Ottawa-based InterRent REIT to buy 15 multi-residential properties in the Vancouver area worth nearly $300 million.
Altberg said his company is keen to make a move into the Ottawa multi-residential market, which has seen a spate of new construction in recent years.
“Ottawa is a place that we would absolutely like to invest in,” he said. “With a partner like InterRent that’s plugged into the Ottawa market, I’m sure it’s only a matter of time before that happens.”