Ivanhoé Cambridge selling its 50-per-cent stake in landmark Sun Life building.
Sun Life joins list of Quebec buildings changing hands
Ivanhoé Cambridge, the real estate wing of Caisse de dépôt et placement du Québec, is selling its 50-per-cent stake in Montreal’s historic Sun Life building, a downtown landmark once the tallest building in the British Commonwealth, The Gazette has learned.
A former symbol of English affluence in Montreal, the ornate building of steel, granite and terracotta became a part of the Quebec pension fund manager’s vast real estate holdings in 2000, following a deal with Sun Life Assurance Company of Canada.
The stake in the Sun Life building was put up for sale last month following a regular asset review, said Claude Sirois, Ivanhoé’s co-chief operating officer and executive vice-president (Quebec).
“It (the sale) allows us to free up some capital (to) redeploy into projects that may generate higher returns for the company,” Sirois said in an email. “This is our business ... knowing the cycles in the evolution of each asset and (disposing of it) at maturity to recycle the capital and re-invest in other projects or properties.”
In August, Ivanhoé Cambridge acquired Alberta Investment Management Corp.’s 50-per-cent stake in Place Ville Marie to become the sole owner of the iconic Montreal skyscraper.
And the pension fund manager is also interested in developing a new office tower at its 900 de Maisonneuve Blvd. W. site. Standard Life Assurance Company of Canada has long expressed interest in signing on as the anchor tenant, but would first have to sell its existing headquarters on Sherbrooke St. W.
The Sun Life building and Place Ville Marie are two of several recent examples where institutional investors have been buying and selling 50-per-cent stakes in Quebec commercial real estate.
In January, fund manager giant PSP Investments was said to have quietly acquired a 50-per-cent stake in Montreal’s 1250 René-Lévesque Blvd., a building co-owned and managed by Oxford Properties.
And in July, Ivanhoé Cambridge partnered with the Canada Pension Plan Investment Board (CPPIB) by ac- quiring a 50-per-cent interest in Sherbrooke’s Carrefour de l’Estrie, the largest shopping centre in the Eastern Townships region.
“More and more, institutional investors are looking for a true partnership with significant positions in order to make clear and complete decisions in managing the properties,” Sirois said.
Sun Life — which reportedly sold its 50-per-cent stake to the Caisse’s former SITQ office division for $64 million — is still a co-owner and key tenant in the building.
The building, with 938,635 square feet of office space, was the ground zero for two crises in Montreal history.
In 1978, Sun Life enraged Quebec’s government when it announced it would be moving its head office from Montreal to Toronto following the adoption of the Bill 101 language law.
And in 1955, Clarence Campbell — the president of the National Hockey League, whose head office was located in the Sun Life building — handed down his controversial suspension of Canadiens legend Maurice “Rocket” Richard. Richard’s suspension for hitting a linesman was denounced by Montreal fans and triggered the Richard Riot.
Sirois could not comment on whether buyer interest in the building would be affected by the Quebec election campaign. Early polls have projected a victory for Pauline Marois’s Parti Québécois. Marois has not committed to holding a third referendum, but said a PQ majority government would hold a consultation, including public hearings and a white paper, about Quebec’s road to independence.
“Sun Life has a solid tenancy (and) significant amounts have been invested into maintaining its ... position in downtown Montreal. It has won an award last fall for its heritage value,” Sirois said. “The Sun Life building is a great opportunity for most investors.”
Ivanhoé Cambridge has about $40 billion in assets.