Acquisition of Amazon Ottawa Aligns with Crestpoint’s Global Outlook | RENX
The acquisition of the 2.8 million square foot Amazon facility in Ottawa, the largest fulfillment center in Canada, meets several key objectives for Crestpoint Real Estate Investments Ltd., which has assembled an international consortium for the $494 million purchase.
Crestpoint and its partners have purchased a 90.1% share of the state-of-the-art, multi-level facility in the community of Barrhaven, a southwest suburb of Ottawa. Developer Broccolini retained the other 9.9% stake in the property, which was completed and handed over to Amazon in late 2021.
“This transaction combines our focus on the industrial market with the appeal that Canada really has in a global context for global investors,” Crestpoint executive vice president Elliott Altberg told RENX.
“It was really just an opportunity for us to buy a very stable, long-term base asset that expands our relationships with capital around the world, and an asset that is leased to a tenant on credit.
“He combines a lot of very good attributes.”
The new owners of the establishment
The new majority owners of the center, which anchors the CitiGate business park, are Crestpoint Core Plus Real Estate Strategy, Vestcor Inc., and Kiwoom Securities and Hangang Asset Management, a South Korean investment consortium.
Crestpoint is a commercial real estate investment manager with $7.5 billion in gross assets under management. The Crestpoint Core Plus Real Estate Strategy was created in 2011 as a diversified open-ended vehicle with a core-plus investment strategy available to institutional clients and high net worth investors.
Connor, Clark & Lunn Financial Group Ltd. — a multi-boutique asset management firm whose affiliates collectively manage approximately $100 billion in assets for individuals, advisors and institutional investors — owns 50% of Crestpoint. Crestpoint’s senior management owns the other half.
Vestcor of Fredericton is jointly owned by the New Brunswick Public Service Pension Plan and the New Brunswick Teachers’ Pension Plan. It provides global investment management services to nine public sector client groups which represented approximately $19.4 billion in assets under management at the end of 2020.
Kiwoom Securities was founded in 2000 and is listed on the Korea Stock Exchange. It offers financial investment, management, investment marketing, investment brokerage, discretionary fiduciary investment and investment advisory services.
Hangang Asset Management is a global alternative asset management company investing in overseas infrastructure and all major real estate asset classes. Its main investors are pension funds, credit unions and insurance companies.
Amazon’s new facility
The facility itself is fully leased to Amazon on a 20-year lease. He is now paying rent, occupying the premises and finishing his fit-out, according to Altberg.
The site is 64.2 acres and the building footprint is approximately 630,000 square feet. It has 54 loading docks.
Various technological applications will allow it to process more than 100,000 parcels per day.
The property also has: 2,062 parking spaces; 107 trailer parking spaces; 250 bicycle parking spaces; 18 parking spaces for motorbikes; and 10 electric vehicle truck chargers.
In keeping his share of the facility, Broccolini is following a similar strategy to the first major fulfillment center he built for Amazon in Ottawa.
Broccolini also sold a 90% interest in that facility, a one million square foot building in the city’s east end, to Concert Properties’ CREC Commercial Fund LP upon completion in 2020.
The two facilities, along with another smaller local fulfillment center recently leased to Canadian Urban, give Amazon nearly four million square feet of fulfillment space in Ottawa.
Crestpoint continues to grow
This most recent transaction, brokered by CBRE, is the largest in a series of major transactions for Crestpoint. It has completed more than $1.9 billion in acquisitions of office, industrial, retail and multi-residential properties over the past 13 months. The acquisitions added more than 6.5 million square feet to its portfolio,
Crestpoint also added 14 new members to its team, bringing its total number of investment professionals to 32. This number is expected to continue to grow.
The company has been a very active buyer in Ottawa, including an industrial portfolio of four properties from Huntington Properties for just over $50 million late last summer as part of its aggressive industrial expansion.
“It’s a different type of purchase, given the long-term nature of the lease, credit rental and the size of the industrial facilities,” Altberg said of the acquisition. Amazon. “It fits very well with our strategy.”
Crestpoint and Vestcor have acquired a 50% interest in the four-building, 1.17 million square foot Place de Ville office complex in downtown Ottawa, paying Alberta Investment $350 million Management Corp., Brookfield Properties and CPP Investments in November.
Altberg told RENX last year that he views Ottawa as a core growth market with more attractive risk-adjusted returns than some other major Canadian cities.
Other acquisitions to come
Although Crestpoint has been active in Ottawa, it continues to seek acquisitions across the country.
“We want to continue growing in industrial space, residential space, and we’ve purchased office space in Ottawa,” Altberg said.
“We are very active and busy and there will be things to discuss, but it is best to leave these discussions until they are over.”