One of Old Montreal’s most “spectacular” office and commercial properties, The Aldred Building at 507 Place d’Armes, is likely to soon have a new owner.
“It’s a building that has tremendous potential,” Scott Spiers, vice-chairman and practice lead for CBRE Montreal’s national investment team, told RENX.
The architecturally significant, heritage mixed-use office building also holds strong potential for residential or hotel conversion, depending on how its eventual buyer wants to position the property.
“It has the potential to be a true A-building,” added Spiers, who called it a trophy opportunity. “This is an old building but a spectacular building with spectacular views and a great location.”
CBRE is representing the building’s owner, Holand Real Estate Group, which also owns other residential, commercial and office properties in Montreal. The company is affiliated with Holand Automotive Group, which provides corporate and consumer leasing and financing services and also owns and operates dealerships in Montreal and Florida.
What The Aldred Building offers
The 23-storey building offers 168,913 square feet of office space and highly visible retail in an iconic Art Deco-inspired building completed in 1931. Designed by renowned architect Ernest Isbell Barott of the firm Barott & Blackader, it somewhat resembles a smaller-scale version of New York City’s Empire State Building, which was completed the same year.
Spiers said The Aldred Building is somewhat uniquely positioned in that it’s older and needs some systems upgrades to bring it up to modern standards. It doesn’t have LEED, BOMA BEST or other certifications that most new office buildings have, but it’s historic, beautifully decorated and features marble walls and floors.
Floor plates gradually taper from 11,300 square feet in the lower levels down to 1,000 square feet on the highest floors. The upper floors offer views of downtown Montreal and the Old Port waterfront.
A café, a restaurant, a convenience store and a Société des alcools du Québec store are on the building’s ground floor.
The Aldred Building fronts Place d’Armes, across from Notre-Dame Basilica of Montreal, and is in close proximity to the Place-d’Armes Metro, the Palais des Congrès de Montreal convention centre and a variety of restaurants, bars, stores, hotels, the waterfront, historical landmarks and other services and amenities.
The property has a Walk Score of 95 and provides convenient highway access via the nearby Ville-Marie Expressway.
Viable office space and potential conversion candidate
“Most of the groups that are looking at this are looking at it for conversion to residential,” said Spiers. “Other than that, we have a couple of office users that are looking at it as well.”
The building, which is property managed by Cogir, is 72 per cent leased to a diverse range of smaller, privately owned companies with a weighted average lease term of 4.6 years.
The Aldred Building has approximately 40,000 square feet of space ready to be occupied, which could make it an attractive investment for an occupier seeking a landmark asset at below replacement cost. It could enjoy the financial benefits of owning space instead of renting while also generating cash flow from other tenants.
“There’s a flight to quality,” Spiers said of Montreal’s office market. “If you’re a AA building, you’re still doing well. Vacancy rates are relatively low and there’s still very good demand. If you’re B- or C- office, it’s difficult.”
Google and Amazon have offices in the area, which has become popular for knowledge-based companies.
“Compared to other asset classes, office is not at the top of the food chain,” Spiers conceded. He added, however, that there’s been “a strong level of interest” in The Aldred Building.
Neighbourhood population is growing
The surrounding area is experiencing exceptional growth and development and the local population has grown by 31.5 per cent since 2019, positioning the property optimally for a residential conversion.
The property’s floor plan layout would make that easier, as would The Aldred Building’s zoning, which allows multiple uses for potential redevelopment — including residential and hotel.
There’s no bid deadline for The Aldred Building at this point, but Spiers expects one to be announced later this month.
