A Halifax-based real estate investment trust has purchased Westmount Place from Sun Life Financial for $77.8 million and says it will focus on the “significant multi-residential opportunity” the site provides.
Killam Apartment REIT bought the mixed-use development because it has all of the key elements it looks for in potential sites for new development — a great neighbourhood, jobs, transit, shopping and entertainment, Philip Fraser, the Halifax-based company’s president and chief executive officer said in a statement.
Westmount Place has 297,000 square feet of space on 14.7 acres of land at Westmount Road and Erb Street West. It includes a grocery store, scheduled to open in September, a pharmacy, medical offices, a bank, a Michaels store and a four-storey office building that houses Sun Life workers.
Most important for Killam, the site has 88,000 square feet of land on the Erb Street side of the property that could be developed with buildings containing up to 600 new apartments.
“Westmount Place is well located close to downtown Waterloo, both the University of Waterloo and Wilfrid Laurier University, the Waterloo Memorial Recreation Complex and the Waterloo Public Library,” Fraser said in a news release.
Sun Life’s Canadian headquarters are located in a historic building on King Street South in Waterloo. The financial services company employs about 3,500 people in the city.
At one point Sun Life was the largest source of property taxes for Waterloo. But it sold its Waterloo headquarters at 227 King St. S. in 2014 and now leases the property back. With this latest sale, Sun Life stresses it has no plans to move out of Waterloo, and will maintain its Canadian headquarters there.
“As part of a regular review of our real estate portfolio properties, we determined that in the current Canadian real estate market, it is more financially attractive for Sun Life to redeploy the capital elsewhere as part of our long-term real estate investment strategy,” Laura Torchia, the company’s manager of corporate communications, said in an email.
Sun Life is the biggest tenant at Westmount Place with 188,702 square feet of space. It has a lease agreement with Killam that runs until 2026.
“Sun Life will remain the sole tenant with full control over the facilities,” said Torchia. “The sale of the building has no impact on employee operations, how we conduct our day-to-day business, or our commitment to the Kitchener-Waterloo region.”
The sale of Westmount Place will count among the largest real estate transactions in the region in 2018.
“It is a very big one,” said Karl Innanen, managing director and broker for Colliers International. “It’s a big deal.”
The site has the potential for an incredible multi-residential development, he said.
“Killam being the buyer, that’s what they do, that’s what they are good at, and they placed a big bet there,” said Innanen.
Killam is among the biggest residential landlords in Canada with 184 apartment buildings containing 14,983 units. It also has 35 manufactured home communities with 5,165 units.
Killam said it will begin the process of consultations and master planning for the site this spring. It said it wants to maximize pedestrian connections, green space and new landscaping. It said it wants to begin construction of the first phase of the development within two years.
The site straddles the urban-suburban boundary, is close to Waterloo Park and the recreation complex, Innanen noted.
“A really nicely located site that lets you take part in everything the region has to offer, close to a lot of great amenities,” he said.
Killam is the latest in a growing list of investors to put big money into local real estate. In recent years, institutional investors bought the Sun Life’s headquarters, the Tannery building in downtown Kitchener, some of the former BlackBerry buildings and a big stake in the Breithaupt Block that houses Google’s Canadian engineering headquarters.