Landmark Investment Site
1200, Rte de l’Église, Québec
The Leaseback (Sale and Lease) arrangement involves the purchaser investing $20M in tenant improvements for building compliance with standards, to be realized in phases. Negotiations for the transaction encompassed lease terms, construction costs, financing, and building valuation, with consideration for cap rates, market interest rates, and Canadian bond values.
In a sale leaseback transaction, a governmental owner aims to become the occupier of a building with a total size of 232,992 square feet. The purchaser conducted a thorough due diligence review, which involved a detailed inspection to verify all demolition, asbestos abatement, retrofitting, and asset maintenance work. The purchaser also prepared plans and specifications for the refurbishment of the building envelope.
The property is located in the Sainte-Foy–Sillery–Cap-Rouge borough of Quebec City, offering an advantageous location. Thanks to the refurbishment of the building envelope, the updated property stands out in the sector with an impressive appearance.
One of the major hurdles in this project is obtaining the necessary zoning approvals. In addition, managing the leaseback transaction and coordinating with the City and financial partners present significant challenges. Another challenge is ensuring that the buyer assumes the responsibility for the rehabilitation work. The success of this project will depend on careful planning and effective communication between all parties involved.