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Bombardier to Sell Downsview Site for US$635 Million

Public Sector Pension Investment Board Buying 370-Acre Tract Expected to be Part of Major Redevelopment
May 3, 2018
Montreal-based Bombardier Inc. is selling its 370-acre Downsview property site for US$635 million to the Public Sector Pension Investment Board, a move that promises a massive redevelopment opportunity.

The deal is expected to close in the second quarter of 2018, generating US$550 million for Bombardier net of transaction and other associated costs.

"As part of Bombardier's five-year turnaround plan, we have been reviewing our facilities worldwide to ensure we have the most efficient operations necessary to support our growth objectives, said Alain Bellemare, chief executive of the airplane manufacturer, in a statement.

As part of the deal with PSP Investments, which manages $139.2 billion of net assets for the pension plans of the Public Service, the Canadian Armed Forces, the Royal Canadian Mounted Police and the Reserve Force, Bombardier will continue to operate from Downsview for a period of up to three years following the closing with two optional one-year extensions.

Bombardier also said it had entered into a letter of agreement with the Greater Toronto Airports Authority for the long-term lease of 38 acres of property at Toronto Pearson International airport. The planes and trains manufacturer is planning to open a new centre of excellence and the final assembly plan for its global business jets. Details on the new lease are to be provided at a future date.

Bellemare said Bombardier was only using about 10 percent of the Downsview site - and bearing the entire cost of operating a 7,000-foot runway. "So, we are very pleased to have reached agreements with PSP Investments and the GTAA," he said, noting the sale will support further economic development and job growth in the Greater Toronto Area.

"This investment is a perfect fit for PSP as it supports our long-term real estate investment strategy," said Neil Cunningham, president and chief executive of PSP Investments in a statement. "We have a stellar track-record in working with large, complex projects across our entire investment portfolio, and we are proud of our continued commitment to investing in Canada."

A local Toronto councilor who had called for the sale to stop reiterated that the land is zoned for employment even though Bombardier, through its sale process, has suggested there is a residential and mixed-use opportunity for the site.

“The employment lands at Downsview are part of a large swathe of lands zoned for jobs,” said Maria Augimeri, the councillor for the ward where the land is located.

PSP said it was looking forward to “"listening to and collaborating with all stakeholders" in Toronto, Ontario and Canada about the development. “This investment is important for PSP as it allows us to expand our real estate footprint in a global city which is in our backyard," said Kristopher Wojtecki, managing director, real estate, for PSP Investments.

Garry Marr, Toronto Market Reporter  CoStar Group   
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