Canderel gears up for busy 2021 after third Mile-Ex acquisition

Montreal real-estate developer and manager Canderel has big plans for 2021.

Fresh off the purchase of a third office building in Mile-Ex, at 6600 St-Urbain St., the closely held company is considering acquisitions next year that could total “hundreds of millions of dollars, if we execute on all our projects,” chief executive officer Brett Miller said.

“We’re very committed to Montreal,” Miller said Thursday in a telephone interview. “We have at least half a dozen sites or buildings that we’re looking at acquiring for either future development or repositioning plays. For the most part, they’re undeveloped sites for rental apartment buildings, condo projects or industrial properties.”

Canderel already manages about 23 million square feet of property across Canada. In the Montreal area, the company is developing the third Tour des Canadiens residential tower next to the Bell Centre and the Aquablu luxury condo project in Laval.

A relatively slower year for real estate allowed Canderel to spend more time scouting for potential deals, the CEO said.

“A lot of the big capital groups were on the sidelines this year,” Miller said. “They were less active or distracted by other challenges. We were very active through COVID-19, evaluating sourcing opportunities. We’re at a point where we’re ready to put ink to paper.”

Canderel acquired 6600 St-Urbain in August to access a pool of artificial intelligence and life sciences tenants.

Built in the mid-1960s, the property — which started life as a textile factory and is being refurbished — includes 157,000 square feet of office space. It expands Canderel’s roster of Mile-Ex buildings, which includes 6795 Marconi — a 100,000 square foot structure that houses a Microsoft artificial intelligence centre — and 155 Beaubien St. West, which the company wants to redevelop within five years.

Canderel has teamed up with a local company called MASSIVart to run a competition to decorate 6600 St-Urbain’s façade with murals. Artists will probably start painting in the spring of 2021, Miller said.

“I get more excited about bringing life to a 1960s building than building a brand new tower,” Miller said. “You can really recognize the past and bring in creativity.”

Rents at 6600 St-Urbain range from about $25 to $30 per square foot, including taxes and fees. That represents roughly half of what business tenants would pay in a downtown high-rise.

“We needed a product that was at a lower price point, and that’s what this building fulfils,” Miller said. “The ecosystem of artificial intelligence and life sciences is really built around the startups. As these startups grow and they get additional financing, they have the ability to invest in their premises. So this deal allows us to get that first contact with the clients, nurture them and see them grow.”

And despite the soaring popularity of work-from-home arrangements during the pandemic, which has emptied downtown cores and led many observers to question the future of office buildings, Miller insists he has no concern about the asset class.

“Our fundamental belief is that demand for office space will recover,” he said. “It will take a certain amount of time, but companies are going to want their employees to be together to collaborate, to be creative. People can work from home one or two days a week now, but that doesn’t change the fact employees need to be together.”

The CEO is equally bullish about Canderel’s hometown.

“Until the pandemic, Montreal was experiencing the best economic boom it’s had in 50 years,” Miller said. “There’s no reason to believe we won’t get back to that same growth curve.”