Devmont is building its first industrial project in Montreal, a 141,000-square-foot building near Trudeau International Airport that will provide employees views of a runway from its rooftop patio.
The Montreal developer, which has a track record of primarily residential projects, is partnering with Sina to develop the structure at 7300 Côte de Liesse Rd. in the borough of Saint-Laurent.
Dubbed Le Se7t300, the building will have 36.5-foot clearance and air conditioning and is targeting a LEED Silver certification.
Devmont president and co-founder Sam Scalia says the firm decided to enter the industrial market because of the region’s very low vacancy rate. He hopes the project will be the first of many industrial developments for Devmont on the Island of Montreal, “if we come across some top locations as this one.”
He says his recipe for development in Montreal has always been to remain on the island because “there’s more tenants; there’s more people, and it always has a better value.”
Devmont partnered with Sina because of the company’s expertise in industrial, Scalia says. “They have a track record of about 1.6 million square feet of industrial delivered and about 500,000 square feet in construction.”
Le Se7t300 and Montreal’s industrial market
Construction of Le Se7t300 began in November and the single-tenant building will be ready next month. Scalia did not provide the cost.
Rental rates are $20 per square foot and include a five-year municipal tax credit from the City of Montreal. While there have been “very good leads,” a tenant has not yet been signed. Scalia says he is open to tenants in both warehousing and manufacturing.
The site was home to a run-down 185-room Travelodge Hotel, but Devmont research found the best use for the property would be industrial.
Le Se7t300 will have 45 underground parking spots, dedicated bicycle spots and charging stations.
“I always try to have something that’s unique in the offering,” Scalia says of the underground parking in the industrial building.
“I wanted to have some features incorporated in the development that could attract employees,” given that talent has “become a precious commodity.”
Other features like the location and a rooftop patio with runway views “will distinguish us from any other property.”
Devmont shifts from condos to rental apartments
Scalia began building condos in 1994 and co-founded Devmont with his brother Joe in 1999.
The company has primarily developed condominiums over the years, including the Rouge and Westbury developments, and some retail and hotels, but has recently shifted its focus to multipurpose rental.
Scalia calls the shift “a natural process in our business. We came to a point in our business where we wanted to diversify” and hold long-term assets.
The decision was made when interest rates were still very low, he says, but “sometimes you get lucky with the timing.”
Given today’s interest rates, “to have a successful condo project, you need to sell 100 units within the first nine months,” he says. “No developer at the moment is able to sell even two or three units a month with the interest rates. There’s no condo market.”
The move to rental development also enables Devmont to make use of the CMHC’s advantageous programs for rental developments, Scalia says.
Devmont currently has about 500 apartments under construction and 1,400 apartments in the planning stage in Anjou in Montreal’s east end, in Pointe-Claire on the West Island, and in Stittsville, Ont., about 20 kilometres west of downtown Ottawa.
The Anjou project, Westwalk Anjou, will consist of three 15-storey buildings, each with about 180 units. It will be near the Galeries d’Anjou mall and a future metro station on the Blue line.
Westwalk Pointe-Claire is awaiting approval from city council. Plans call for 365 rental units in two 12-storey buildings at Labrosse Avenue and Saint-Jean Boulevard.
Scalia learned about the Stittsville site – its first project outside Quebec – from some high school friends. The site at 6310 Hazeldean Rd,, near the Stittsville Corners Shopping Plaza, was formerly a distribution centre. Plans call for 423 units in 21- and 12-storey buildings.
All three sites feature high demand, high rents and good absorption, Scalia says. He hopes to be in the ground for all three developments in 2025.
Westwalk, Westbury developments underway
In addition, Westwalk DDO on Brunswick Boulevard and Davignon Street in Dollard des Ormeaux is now being pre-leased. Delivery of the three-building West Island development begins next February.
New phases are also being built at Westbury, a mixed-use midtown Montreal development off Décarie Boulevard that will include about 1,100 condos and rental apartments once the latest phases are completed.
The development is also home to the Hilton Garden Inn / Homewood Suites by Hilton hotels, as well as retail and office components.
Westbury is Devmont’s largest project and “the one we’re the most proud of because we created an entire neighbourhood,” in what was once an industrial site.
Westbury Green, a mixed-use building with four storeys and 65,000 square feet of office space and 10 storeys of residential rentals, is the newest development on the site. Two of the four floors of office space have been rented as have about 60 per cent of the residential units.
Also to be developed at the site is the two-phase Westbury 9 which will include 360 rental apartments.
Scalia says the demand for rental is high and will remain high given current rates of immigration and labour shortages.
With “quite a bit on our plate,” Devmont is “not really in acquisition mode this year,” he says. “We’re more into execution mode for the next year and a half.”