Germany's KanAm puts Montreal office assets up for sale: sources
By John Tilak and Allison Lampert
TORONTO/MONTREAL (Reuters) - German real estate investment firm KanAm Grund Group has put up for sale two office buildings in Montreal that could fetch about C$400 million ($296 million) to C$450 million, according to two sources familiar with the situation.
Interest has come from institutional players, including pension funds and real estate-focused investors, the sources said on condition of anonymity, as they were not authorized to talk with the press.
KanAm expects to complete a deal by the end of the year, the sources said. KanAm spokesman Michael Birnbaum did not comment on the sale process.
The buildings are expected to be sold at a low capitalization rate for the Montreal market, indicating that demand for high-quality office buildings is spilling over from Toronto and Vancouver.
Capitalization rates are calculated by dividing an asset's net operating income by its market price. A lower rate indicates stronger demand.
The 1350-1360 René-Lévesque West properties are a pair of office buildings in downtown Montreal. They have 25 and 17 stories respectively.
KanAm, which owns real estate assets in Europe, North America and Australia, acquired the buildings in 2007 and 2008.
The nearly 1 million square-foot property is managed by Canderel Inc, a Canadian real estate developer. Tenants include IT services providers CGI Group, Computer Sciences Canada, IBM and TD Bank, according to its website. Continued...