By Robert Frank
TGTA Real Estate partner Martin Galarneau has concocted a winning recipe for adding value to office redevelopment in midtown Montreal.
First, find a suitably sized property, close to mass transit, trendy shops and services. Remove the shell and gut the interior, keeping only the solid structure. Add in all-new mechanical systems, elevators and leading-edge energy-saving environmental controls. Keep your needs flexible, to adapt to the tenants whom you attract. Finally, garnish with green space.
The formula has proved profitable for two buildings, totaling some 62,000 sq.ft., that TGTA is currently repurposing, Galarneau said.
“It was a completely speculative initiative,” he recalled. “We had a vision: Employee well-being is top-of-mind for ceos. The workplace environment is a crucial determining factor for their ability to attract and retain top-notch staff.”
“We’re not talking about initial startups,” Galarneau explained. “The Mile X and Mile End cachet is more A-class. There, we offer the same level of comfort that would be expected of a downtown building.”
From there, TGTA upped the ante with Mother Nature.
“We gave up 40 parking spots behind the building to build a big park,” he said. “Folks asked me ‘Are you crazy?’”
“We capitalized on our location,” Galarneau explained. “The park that we built connects University of Montreal’s Outremont campus with Little Italy. So we talked to the city and identified how best to collaborate to optimize that corridor. It proved precisely the lifestyle option that quality tenants were looking for.”
The tenant mix uncannily matched what TGTA had expected.
“Of the tenants who have signed, about 50% develop internet video games; 10% are life sciences; 15% design firms; and the remaining 25% traditional businesses like engineering,” he said.
Buoyed by his success, Galarneau is in the process of acquiring another property elsewhere in the city akin to his Mile X project.
“There are still midtown sites ripe for redevelopment. On the other hand, prices are making it increasingly difficult to buy,” he cautioned. “This sort of project has to be sensitive to cost for it to work.”
Despite his accomplishments there, Galarneau insisted that ample opportunity remains in the city core as well.
“Downtown Montreal is extraordinarily rich and vibrant—and is becoming more so with as residential development grows,” he concluded. “Midtown development opportunities don’t come at its expense.”
This report first appeared in the Spring 2017 edition of Canadian Real Estate