Place Dorée Real Estate Holdings’ acquisition of a redevelopment site at 800 Henri-Bourassa Blvd. W. in Montreal is the latest sign of a bounce-back in the city’s residential land market.
Place Dorée acquired the 500,842-square-foot site from Choice Properties for a $15-million base price. The final price will be based on a rate of $40 per-buildable-square-foot for the development that will take place there.
That will likely push the total price to between $20 million and $25 million based on the purchaser’s plans, according to Guillaume Jacob, senior vice-president for CBRE Montreal’s national investment team, which brokered the deal.
The site was once home to a Loblaws store that was closed and relocated a few years ago. The building has since been used as a storage warehouse.
The rest of the site is comprised of surface parking.
Strong interest from investors
Jacob said Choice had considered redeveloping the property itself or partnering with another developer to do it.
Mixed-use and residential makes up four per cent of the real estate investment trust’s more-than-700-property portfolio. But it has no residential expertise at present in Montreal, as it does in Toronto, so the decision was made to sell.
Privately owned Place Dorée is a Montreal-based developer that Jacob said plans to demolish the existing building and add purpose-built rental apartments and condominiums, with the potential integration of some retail, to 800 Henri-Bourassa Blvd. W.
Jacob said he was surprised by the amount of interest in the site, which received 10 bids. CBRE started marketing it in October 2023, and following the sale process there was a six-month closing period before Place Dorée officially acquired it in December.
“There was a mix of institutional capital from Toronto and some local developers,” Jacob said of of the investors which had inquired about the large-scale, transit-oriented site that offers highway connectivity and surrounding amenities.
Residential land investment volume rose in Montreal
Residential land investment volume in Montreal rose to $479 million last year, up 30 per cent from 2023, according to data from CBRE and Altus Group. There were almost 250 transactions, with nine valued at more than $10 million.
Jacob said interest in large-scale sites capable of supporting multi-phased residential development is continuing to build momentum. He attributed this to rent growth, lowering interest rates and construction costs, and the need for more multifamily development.
“Developers need to start building again,” Jacob said. “They’ve been on the sidelines for the past 24 months.
“The pro formas were not working but I think today you can make the numbers work a little bit better.”
Other recent Montreal residential land deals
The ongoing demand for new housing has led to several significant land transactions over the past year.
JADCO acquired the Galeries Laval shopping centre from Fonds de Solidarité FTQ for $126 million in an off-market deal in December. It’s considered a covered land play since the 590,000-square-foot mall is expected to be redeveloped for residential or mixed-use purposes.
Allied Properties REIT sold 75,692 square feet of development land at 810 Rue Saint-Antoine East, part of the Gare Viger site it acquired from Jesta Group in 2021, to Broccolini and PUR Immobilia for $42 million in December. It has a buildable area of 420,000 square feet.
A year earlier, Allied had sold 8 Place du Commerce to Groupe Mach for $20 million. That 130,000-square-foot site has a buildable area of 500,000 square feet.
Plans for Place du Commerce are to demolish the existing buildings to make way for two new 13-storey rental apartments with 563 units, 25,000 square feet of office and commercial space, and a private central park.
“We see a noticeable trend of REITs and institutions trading non-income-producing real estate for future development,” Jacob observed. “We are working with other institutional owners who will sell sites in 2025 as they focus on cash flow and yield.”
