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Breaking: Minto Group Selling Another Piece of HQ

Ottawa-based Company Keeping Just One-Third of Capital's Minto Place, Now Valued at $405 Million
August 7, 2018
Minto Place at 180 Kent St. in downtown Ottawa.

Ottawa-based Minto Group is selling off another portion of its head office in a deal that would value Minto Place at more than $400 million, CoStar News can report.

The $135 million deal will see the three-building development in downtown Ottawa split three ways, with Investors Group and LaSalle Investment Management each taking one-third along with Minto, which will manage the property.

It was over a year ago that Minto first sold Investors Group a 50 per cent interest in the complex just blocks away from Parliament Hill. The two have been working ever since on bringing in a third party.

"It's definitely one of the top three or four buildings in the city. We were looking to redeploy capital elsewhere in the organization," said Glen MacMullin, senior vice president of investment management at Minto, in an interview. "We were looking to sell down our ownership position, and we did that with [the original] Investors Group deal."

The deal comes with office vacancies at 5.6 per cent at the end of the second quarter of 2018, a 10 basis point decline over the past six months, according to CoStar data.

The three towers at Minto Place include the 18-storey, 315,996-square-foot Canada Building at 344 Slater St. and the 14-storey, 214,896-square-foot Enterprise Building at 427 Laurier Ave. West, both built in 1988. A third tower at 180 Kent Ave., built in 2009 and home to Minto staff, is 395,067 square feet.

"We left the door open to a greater interest in the future, but we closed the deal," said MacMullin about the original transaction for $188 million for a 50 per cent stake. He said the best price it could get at that time was the 50/50 deal with Investors Group.

Over the last 15 months, Investors Group and Minto have been working together to try and come up with a deal for a third partner so there would be a "symmetrical ownership," and brought LaSalle in at that point.

In essence, both Minto and Investors Group sold a third to LaSalle, Chicago-based real estate investment management firm and independent subsidiary of Jones Lang LaSalle, for a total of $135 million, valuing the entire Minto Place at $405 million.

Michael Waters, chief executive of Minto who also serves as the head of its publicly traded real estate investment trust, said the deal comes down to redeploying capital.

"We are taking capital so we can deploy it into higher growth, higher-return opportunities," said Waters.

Minto Apartment REIT just closed a highly successful initial public offering, first reported by CoStar News, with total proceeds of $230 million once underwriters exercised the overallotment. Included in the REIT is a luxury multifamily building that is part of the same city block as Minto Place.

"For tenants and employees, the change in ownership is largely invisible," said MacMullin, adding the complex will retain the same name.

Lest anybody think Minto is exiting the capital, he added it was just too much real estate concentrated in one place.

"For a family to own, when you add in the multifamily tower, this is $500 million or $600 million. It doesn’t make much sense to have that much devoted to one block," he said, noting Minto still has $200 million invested in the block.

Minto was formed by Ottawa's legendary Greenberg family, which Canadian Business magazine estimated had a net worth of $1.57 billion in 2015. The company was created in 1955 by four brothers, Gilbert, Irving, Lorry and Louis Greenberg. Roger Greenberg, the son of Louis, remains chairman of the Minto board.

Garry Marr, Toronto Market Reporter  CoStar Group   
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