Cushman & Wakefield picks up LePage Commercial
Piece of Canadian property history goes for US$55M
GARRY MARR Foundations Cushman
& Wakefield Inc.
confirmed yesterday it is buying real estate Canadian icon Royal LePage Commercial Inc. from Brascan Corp., as first reported in the Financial Post.
New York-based Cushman & Wakefield is said to have paid US$55-million for the wholly owned subsidiary of Brascan, which is considered one of the most storied real estate companies in Canada. The acquisition includes LePage’s commercial brokerage operations in Vancouver, Calgary, Ottawa, greater Toronto and Montreal.
The two, which have been negotiating for months, already had a working relationship: LePage directed its Canadian clients moving south to Cushman & Wakefield, which, in turn, directed its U. S. clients moving north to LePage.
The Canadian firm dates to 1913, when Albert E. LePage revolutionized the real estate business by turning the buying and selling of homes into a business. Royal LePage’s residential business is not part of yesterday’s deal.
Colum Bastable, chief executive of LePage, said he and other top executives will be staying on with the new company, which will be branded Cushman & Wakefield LePage.
Brascan is going to retain everything associated with its investment banking unit. Over the past several months, Brascan stripped key personnel out of LePage to work on larger real estate deals for the parent.
Much to the chagrin of Brascan, 10 of them — some working for Brascan Financial Real Estate Group and some for LePage — jumped ship en masse to BMO Nesbitt Burns’ real estate group last month. The Canada Pension Plan Investment Board is on the verge of buying three shopping malls from privately held Iberville Investments Ltd.
The Quebec-based company has been selling its malls as it faces increased competition from big-box stores. Iberville sold nine shopping centres to RioCan Real Estate Investment Trust for $100-million in May, 2004. The malls were purchased for RioCan Retail Value LP, which RioCan set up to buy distressed or turnaround properties.
The malls are in Victoriaville, Sherbrooke, and Quebec City, where the Citadel is considered the jewel in the transaction. The deal is still being negotiated. Call me when you get a tenant. That was the reaction of cynics over Cadillac Fairview Corp.’ s announcement that it would be building a new tower near Toronto’s financial core.
The subsidiary of the Ontario Teachers’ Pension Plan Board plans to spend $400-million on a 1.2-million-square-foot tower and proceed once it finds a tenant for 200,000 sq. ft. There’s only one problem: Cadillac is in the same boat as other developers ready to start building in the core.
Brookfield Properties Corp. is one major tenant away from getting its 1.3-million-sq.-ft. site at Bay and Adelaide off the ground. The stump of a building is built, and being used for parking. Brookfield is said to be in a better position to start construction.
Then there’s Menkes Developments, which has a site under contract near the Air Canada Centre and behind Union Station. Scuttlebutt is that Menkes already has an investor lined up, a mid-sized Ontario pension fund.
But the key is going to be finding tenants. The most logical lead tenant would be a law firm; there are a number with leases due to end during the time it would take to construct a new tower.