Commercial Real Estate Magazine volume 16 - issue 2

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– QUÉBEC MARKET –

VOLUME 16 | ISSUE 2

ON THE EVE OF HIS RETIREMENT ROGER PLAMONDON

A MAN ENGAGED ON ALL FRONTS REM EFFECT ON OFFICE BUILDINGS FACILITATING UNIT ENCOURAGING NEWS QUÉBEC CITY HOTEL MARKET RAPIDLY CHANGING

PP 41614528

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PUBLISHER Jacques Boisvert EDITORIALS Journalists : Foulques Delbar, Emmanuelle Gril, Nathalie Savaria, Nathalie Vallerand and René Vézina Content quality and assistant editor : Céleste Carpentier CONTRIBUTORS TO THIS ISSUE Sylvie Bouvette, Jean-Michel Champagne, Anissa Errai, Jean-Marc Fournier, Valérie Laurendeau, Paul Lewis, Frédéric Meunier and Fabienne Racicot

Jacques Boisvert Publisher

TRANSLATION, REVISION AND PROOF-READING Neil Kroetsch

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PRODUCTION Supervision : Edith Lajoie Graphic design, layout and advertisements: Carole Bordeleau from Carbodesign PHOTOGRAPHS Denis Bernier, Laëtitia Boudaud, Éric Carrière and Roxane Paquet COVER PAGE PHOTO © JBC Média by Denis Bernier ADVERTISING Claire Boisvert Sales advisor Marie Girard Advertising project manager Québec 418 317-0669

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A TWO-FOR-ONE! If you are reading this magazine on our website or after sharing it on social media, you should know that our digital and print subscribers have received two copies: the one you are currently reading and a special feature souvenir edition that focuses on the real estate career of Roger Plamondon, who is also featured on the cover of this magazine (available at jbcmedia.ca + Library + Special Edition). While it's unusual to be on the front page of two issues at once, it's very much in keeping with this great real estate leader who has never done things by halves, always going above and beyond basic requirements.

Roger is about to enter active retirement.

The journalist Nathalie Vallerand first spoke to him for the opening interview, which focuses on the man, his commitment to society, his family life and his retirement plans.

After some research, she then gathered information for the special feature devoted to a retrospective of his long career.

In this issue we are also pleased to welcome other industry leaders like Anthony Arquin, a renowned commercial real estate lawyer and partner at Davies Ward Phillips & Vineberg; Philippe Krivicky, assistant managing director for Economic Development and Public Outreach with the City of Montréal; and the broker André G. Plourde, executive vice-president with Colliers. You will also see that there are several references to the launch of the Facilitating Unit, a common denominator for Roger Plamondon, Philippe Krivicky, Jean-Marc Fournier and many of our readers, it goes without saying.

In terms of new features, the well-known economic journalist René Vézina is now writing a regular column where he chats with various economists who share their forecasts with you and other readers. But that is only part of what's on offer in this issue. I invite you to browse through each page of your magazine to discover many other interesting texts, not the least of which is the special edition paying tribute to the career and achievements of Roger Plamondon.

Enjoy your reading!

Jacques Boisvert Publisher

www.jbcmedia.ca We acknowledge the financial support of the Government of Canada

COMMERCIAL REAL ESTATE MAGAZINE : : APRIL – MAY 2023

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CONTENT : : VOLUME 16 | ISSUE 2

3 WORD FROM THE PUBLISHER A two-for-one!

7 INTERVIEW – ROGER PLAMONDON On the eve of his retirement A man engaged on all fronts

18 INTERUNIVERSITY COMPETITION i3c CHALLENGE Identifying cities of the future 20 INTERVIEW – PHILIPPE KRIVICKY SENDS A CLEAR MESSAGE Montréal open to dialogue 27 DID YOU KNOW? Facilitating unit Encouraging news 32 INTERVIEW – ANTHONY ARQUIN A passion for real estate

CONTENT 12 DATA + FACTS = SMART INVESTING REM effect on office buildings 7 years later

24 SUSTAINABLE DEVELOPMENT Equity, Diversity, Inclusion Basic concepts of ESG Performance

28 ECONOMY A resilient economy, but for how long?

30 COMMON AREAS Gaze skyward

37 QUÉBEC Québec city hotel market rapidly changing

42 WORD FROM THE IDU Accelerate real estate development: time to take action!

44

REAL ESTATE OVERVIEW André G. Plourde A passion for real estate deals

51 DID YOU KNOW? LIB Aylmer Residence Emergence of a Concept 54 ONE ON ONE WITH – ROBERT J. VÉZINA Eyes on the future 58 MIPIM 62 INDUSTRY INFO

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COMMERCIAL REAL ESTATE MAGAZINE : : APRIL – MAY 2023

48 PROPERTY LAW Two offers, two attempted transfers of title… who wins?

52 FRESH TAKE The human factor essential in commercial real estate

60 WOMEN WITH EXPERTISE AND INFLUENCE Pre-emptive Rights Urban Planning that complicates real estate transactions

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INTERVIEW

ON THE EVE OF HIS RETIREMENT

A MAN ENGAGED ON ALL FRONTS

BY NATHALIE VALLERAND, JOURNALIST

Who in the Montréal estate industry doesn't know Roger Plamondon? Since he began his career in real estate 50 years ago, he has been involved with a wide range of social causes, boards of directors and think tanks. It's hard to believe that this hyperactive man will soon be retiring. A retirement, however, that will be far from tranquil.

O

n June 13 Roger Plamondon will complete his last day of work as president of the Broccolini real estate group. On that day, he will end his career in style by co-chairing the 2023 Montréal Real Estate Summit. Last year at the same event, he caused quite a stir by entering the Palais des congrès convention centre at the controls of his gleaming Harley-Davidson LiveWire electric motorcycle. The intent was to highlight the importance of environmental criteria in real estate projects.

What will his big move be this year? The future retiree is still thinking about it. But one thing is certain, the day will be rich in emotion because his wife, Rita Robitaille, and his assistant of the last 10 years, Anne-Marie Fondacaro, will be present. "Without Rita by my side, I would not have been able to do a tenth of what I have done in my career," he said. As for Anne-Marie, she is my right hand, my advisor, my conscience. They are two very special women."

JBC MÉDIA BY DENIS BERNIER

COMMERCIAL REAL ESTATE MAGAZINE : : APRIL – MAY 2023

7

INTERVIEW

SOCIALLY RESPONSIBLE REAL ESTATE It is not surprising that Roger Plamondon is ending his career by co-chairing a major real estate event, given his long-standing involvement in the industry.

He has been a member of the board of directors of the Québec Institute for Urban Development since 2018, serving as president for the past two years.

His duties with that organization, which represents our industry, led to his participation in Montréal's working committee on the bylaw known as "20-20-20." It promotes the construction of social, affordable and family housing in real estate development projects in the city.

"I've always been an advocate for reaching out," he noted. "Yes, municipalities and the real estate industry sometimes have competing interests, but it's important that each try to understand the other's reality. If you keep the dialogue going, the collaboration can only improve. That now seems to be the case with the City of Montréal, and I hope I have contributed to that improvement."

As president of the Broccolini real estate group, he is a member of a Montréal municipal committee known as the Facilitating Unit, whose purpose is to

accelerate implementation of real estate projects by simplifying the administrative process. "This is a way to optimize the chances of completing new projects at a time when the housing crisis requires an energetic response." A pilot project was launched on March 8 in four boroughs: LaSalle, Sud-Ouest, Rosemont–La Petite Patrie and Ville-Marie.

In addition, this 68 year-old is co-president of the Affordable Montréal Coalition, a consulting group created by the city to accelerate the development of social housing and affordable housing. He views this as a critical issue. "When people can no longer afford housing, it's a social problem. In that respect, real estate developers have a social responsibility that they can no longer ignore. However, flexibility is needed on the part of elected officials, given that building affordable housing also means an increase in neighbourhood density."

He would like to continue that commitment in retirement. "Working together to find solutions so that we augment the supply of affordable housing would be a legacy I would be proud of."

JBC MÉDIA BY DENIS BERNIER

8

COMMERCIAL REAL ESTATE MAGAZINE : : APRIL – MAY 2023

"At the time, the dropout rate in St. Henri was high. I could have dropped out myself, but I kept going."

– Roger Plamondon

PREMIUM OFFICE SPACE FOR RENT

A HELPING HAND FOR THOSE IN NEED Roger grew up in a family of modest means, first in the Rosemont neighbourhood and then in St. Henri in the southwestern part of the city core. Although he lacked for nothing, that environment made him aware of the reality of people living in difficult situations. That explains why affordable housing is important to him, and why he gives his time and energy to assist various humanitarian causes.

In the early 1990s he joined the boards of directors for youth services organizations like the Maison des jeunes in Ville-Émard, the Richelieu Movement and Loisirs St. Zotique. "At the time, the dropout rate in St. Henri was high. I could have dropped out myself, but I kept going. The in-school ambience back then meant I didn't have to put in much effort to succeed in high school. Once I got to college, however, I was shocked to see that the other students knew more than I did. I promised myself that I would help inner city youth."

He is an active supporter of Chez Doris, an organ­ ization that provides services to homeless or low-income women. "Chez Doris buys buildings to convert them into women's shelters or affordable apartment buildings," he said. "I'm on its building committee, where my real estate experience comes in handy."

He is also involved in two fundraising campaigns, one for Juripop, an organization that facilitates access to justice for people with low income, and the other for the foundation funding the Institut universitaire sur la réadaptation en déficience physique. "The Institute is doing an extraordinary job of developing practices and technologies that allow people to regain maximum physical autonomy. Holding a fork, combing your hair or putting on makeup may seem trivial. But for people in rehab for physical disabilities, those are big wins."

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9

INTERVIEW

RETIREMENT PROJECTS In addition to his philanthropy, over the years Roger Plamondon has sat on the Boards of many business associations: Chamber of Commerce of Metropolitan Montréal, the Business Development Bank of Canada, the Conseil québécois du commerce de détail, the Canadian Council of Grocery Distributors, etc. Once he retires, he hopes to continue to work with one or two of them.

"It's unthinkable for me to turn off the switch all at once.

It's not in my nature. I like to be busy, and I believe that my management experience can be useful to boards of directors. I could also see myself advising a municipality on real estate development. My business perspective could enrich the thinking in a context where there are many challenges to be faced." He is a member of advisory committees for real estate firms such as EMD-Batimo and Quo Vadis, something he plans to pursue.

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" It's unthinkable for me to turn off the switch all at once. It's not in my nature. I like to be busy, and I believe that my management experience can be useful to boards of directors. I could also see myself advising a municipality on real estate development. My business perspective could enrich the thinking in a context where there are many challenges to be faced. " – Roger Plamondon

In addition to a few professional commitments, Roger also intends to take advantage of his retirement to indulge his passions for motorcycles and travel, interests also shared by his wife Rita, whom he met in high school in 1971. They are the proud parents of a daughter, Brigitte.

Their agenda is dizzying. On June 14, his first day of retirement, they will hop onto their (gasoline powered) Harley-Davidson Ultra Classic Limited to attend a motorcycle rally in New Hampshire. Then it's back to 1 2023-01-24 13:33 Montréal on the 18th. The next day they leave for a riverboat cruise on the Rhine from Amsterdam to Basel, followed by a stay in Prague.

Their trip will end on July 8 with the Stockholm show of Elton John's farewell tour. Rita and Roger have already seen the show in Las Vegas, Montréal, Toronto, Vancouver and Los Angeles! "My wife is a big fan of Elton John," said the future retiree. "My father used to say to me Make sure your wife is happy and you'll always be fine. That's what I do. That being said, I'm also a big Elton John fan."

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After seeing their favorite singer, the couple will be part of a motorcycle parade in Milwaukee in July to celebrate Harley-Davidson's 120th anniversary. A series of trips in 2024 will follow, and probably also a few rides in a classic car, as Roger owns two Thunderbirds (a 1957 and a 2002 model). That interest comes from his father, an auto body repairman by trade. "I grew up surrounded by vehicles.

As a child, I even made small scale-model cars. My father inspected the quality of the finish. It had to be perfect," he noted.

In short, the president of the Broccolini real estate group is retiring, but has no plans to slow down. Keep up the good work, Roger!

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DATA + FACTS = SMART INVESTING

REM EFFECT ON OFFICE BUILDINGS

7 YEARS LATER

Frédéric Meunier Guest Columnist

The REM project (light rail transit network) will be an important player in Montréal's mass transit system. Presented with great fanfare by CDPQ Infra in April 2016, has that announcement had an effect on office buildings located near future REM stations? Here's a look at the situation seven years later.

The REM will include 26 stations spread over a 67 km route covering the Island of Montréal, the South Shore, Laval and the North Shore. The largest public transit infrastructure project since the Montréal metro was inaugurated in 1966, its various future stations will be located within one kilometre of approximately half of all office space in Greater Montréal. By comparison, Montréal's metro stations are located within one kilometer of 72% of that area.

A look at the sprawling layout of the network might make one think that secondary hubs would emerge near the stations. Consequently, one would expect to see a boom in office development in their vicinity, along with some protection for office buildings suffering from high vacancy rates due to the pandemic. True or false? Let's see what the data tell us.

LITTLE CHANGE IN DISTRIBUTION OF INVENTORY As mentioned above, the different REM stations are located within one kilometre of approximately half (50.5%) of the office space in Greater Montréal built prior to the announcement of the project in 2016. As of Q3 of 2022, that proportion has remained roughly the same (50.6%). In fact, of the 5.3 million square feet built since the announcement of the REM, the proportion erected within one kilometre of a station is 52.4%. It is thus impossible to conclude whether proximity to a train station has been a major stimulus for new construction. Analysis within a radius of 500m is no more conclusive.

Thus, before the announcement of the REM, approximately half of the area considered was

CHANGES IN OFFICE BUILDING INVENTORY IN GREATER MONTRÉAL – FROM LAUNCH OF REM PROJECT IN APRIL 2016 TO FALL 2022 – CONSTRUCTION STATUS

DISTANCE FROM NEAREST REM STATION 500m or less

500m to 1000m

More than 1000m

TOTAL

INVENTORY

Frédéric Meunier Director Altus Group

BUILT BEFORE 2016

37 754 000

14 765 000

51 371 000

103 891 000

STILL THERE IN FALL 2022

39 769 000

15 537 000

53 899 000

109 206 000

PROPORTION OF INVENTORY BUILT BEFORE 2016

36.3%

14.2%

49.4%

100%

STILL THERE IN FALL 2022

36.4%

14.2%

49.4%

100%

Source : Compilation Groupe Altus

CHANGE IN SQUARE FOOTAGE CHANGE IN PERCENTAGE

EVOLUTION OVER THE PERIOD 2 015 00

772 000

2 528 000

5 315 000

5.3%

5.2%

4.9%

5.1%

Source: Altus Group. Excluding Class G buildings and office buildings under 20,000 square feet.

12

COMMERCIAL REAL ESTATE MAGAZINE : : APRIL – MAY 2023

CHANGES IN INVENTORY – BUILDINGS UNDER CONSTRUCTION & PRE-LEASED – DISTANCE FROM NEAREST REM STATION –

DISTRIBUTION PER STATION OF OFFICE SPACE LOCATED LESS THAN 1 KM FROM REM STATIONS

DISTANCE FROM NEAREST REM STATION CONSTRUCTION STATUS

500m or less

500m to 1000m

More than 100m

REM ANTENNA/STATION TOTAL

INVENTORY

Less than 1000m

MAIN SECTION Brossard

0%

Du Quartier

3%

Panama

1%

UNDER CONSTRUCTION

1 379 000

77 000

1 269 000

2 725 000

PRE-LEASED

1 949 000

738 000

1 830 000

4 517 000

Île-des-Sœurs

3%

TOTAL

3 328 000

815 000

3 099 000

7 242 000

Griffintown-Bernard-Landry

7%

Gare Centrale

43%

46.6%

100%

McGill

36%

Édouard-Montpetit

0%

Canora

0%

Ville-de-Mont-Royal

0%

Côte-de-Liesse

0%

Montpellier

0%

Du Ruisseau

0%

within one kilometre of a station. Seven years later, the situation is more or less identical.

Bois-Franc

0%

Marie-Curie

3%

Will projects under construction or in pre-leasing mode reverse that trend? As of the third quarter of 2022, 7.2 million square feet of office space were under construction or pre-leased. Those projects are located near stations in proportions of 53.4% and 59.5% respectively.

This will not be enough to radically change the situation.

YUL-Aéroport-Montréal-Trudeau

0%

PROPORTION OF PROJECTS Source : Compilation Groupe Altus UNDER CONSTRUCTION

PRE-LEASED TOTAL

50.6% 43.1% 46.0%

2.8% 16.3% 11.3%

40.5% 42.8%

100% 100%

Source: Altus Group. Excluding Class G buildings and office buildings under 20,000 square feet.

The fact that half of the office space is located within one kilometre of REM stations strikes the imagination. While that proportion is high, the fact remains that of the 26 stations in the network, the two downtown stations (Central Station and McGill) alone account for 79% of that figure. In fact, the six consecutive stations on the main line from McGill to du Quartier in Brossard account for 93% of the area within one kilometre of the entire REM route. The remaining 7% represents only 3.8 million square feet and is scattered primarily around the Trudeau Airport and Anse-à-l'Orme terminals.

YUL-AÉROPORT-MONTRÉAL-TRUDEAU

ANSE-À-L'ORME Des Sources

1%

Fairview-Pointe-Claire

2%

Kirkland

0%

Anse-à-l'Orme

0%

DEUX-MONTAGNES Sunnybrooke

0%

Pierrefonds-Roxboro

0%

Île-Bigras

0%

Sainte-Dorothée

0%

Grand-Moulin

0%

Deux-Montagnes

0%

TOTAL NETWORK

100%

Source: Altus Group

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DATA + FACTS = SMART INVESTING

As mentioned above, office space is unevenly distributed among the various stations in the network, with some having more weight than others, notably Central Station and McGill. Their respective availability rates of 18.3% and 17.5% therefore largely explain the average of 18.1% for all buildings located within one kilometre of an REM station.

AVAILABILITY OF OFFICE SPACE IN TERMS OF CLOSEST REM STATION DISTANCE FROM THE NEAREST REM STATION

INVENTORY

AVAILABLE

% AVAILABLE

500m or less

39 769 000

7 733 000

19.4%

500m to 1000m

15 537 000

2 300 000

14.8%

Subtotal < 1000m

55 306 000

10 033 000

18.1%

More than 1000m

53 899 000

9 080 000

16.8%

GREATER MONTRÉAL TOTAL

109 206 000

19 113 000

17.5%

SQUARE FOOTAGE & AVAILABILITY OF OFFICE SPACE LOCATED LESS THAN 1 KM FROM REM STATIONS AREA

RATE AVAILABLITY

1 752 000

19.7%

REM ANTENNA/STATION

Source: Altus Group

MAIN SECTION Du Quartier Panama

The above-mentioned construction and pre-leasing areas will not be sufficient to change that concentration around a few stations. McGill and Central Station account for 83% of the surface area of projects that are pre-leased or under construction within one kilometre of REM stations (compared to 79% currently).

Île-des-Sœurs

SPACE AVAILABILITY – NO PROTECTIVE EFFECT The following results compare the availability of office space near REM stations to office space located more than one kilometre from a station. Keep in mind the fact that the light rail network is not yet in service.

510 000

11.6%

1 631 000

15.1%

Griffintown-Bernard-Landry

3 784 000

19.0%

Gare Centrale

23 809 000

18.3%

McGill

20 009 000

17.5%

Édouard-Montpetit

38 000

0%

Canora

109 000

0%

Ville-de-Mont-Royal

119 000

16.6%

Bois-Franc

60 000

8.8%

1 734 000

15.2%

244 000

10.4%

YUL-AÉROPORT-MONTRÉAL-TRUDEAU Marie-Curie YUL-Aéroport-Montréal-Trudeau ANSE-À-L'ORME

Across Greater Montréal, the office space availability rate was on average 17.5% in Q3 of 2022. Availability in buildings located within 500m of a station was 19.4%, and was 14.8% for buildings located between 500 and 1,000m of a station.

In comparison, the average vacancy rate for buildings located outside that radius was 16.8%.

Des Sources

444 000

7.4%

Fairview-Pointe-Claire

900 000

52.8%

118 000

0%

Anse-à-l'Orme

Kirkland

1 508 000

33.7%

TOTAL < 1 KM FROM THE REM STATION

55 306 000

18.1%

TOTAL > 1 KM FROM THE REM STATION

53 899 000

16.8%

Source: Altus Group

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DATA + FACTS = SMART INVESTING

Apart from that nuance, the table opposite clearly shows that the avail­ ab­ility of office space is relatively high around the majority of REM stations. Of the stations with at least 200,000 sq.ft. of office space within a 1km radius, only Sources (444,000 sq.ft, 7.4% available), Panama (510,000 sq.ft, 11.6%) and YUL (244,000 sq.f, 10.4%) have an availability rate significantly below the metropolitan average.

Unfortunately, the REM has not had the "protective" effect that one might have hoped for.

THE REM IS NOT A MAGIC WAND The seven years since the project was announced is probably too short a time to fully assess the real impact of REM on office buildings. Not only is the network not yet in service, but the massive adoption of remote work caused by the pandemic has also helped to confuse the issue.

Given the current state of the market, however, our analysis does not demon­ strate that the REM has been a catalyst for office building development. The level of attractiveness of sites in the vicinity of the planned stations is only marginally higher than it was before the announcement of the light rail network in 2016.

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Furthermore, the presence of an REM station within 500m of an office building does not protect it from the current high vacancy rate cycle. So far, it is clear that the REM has not provided the shielding effect that might have been desired. Only time will tell if office space will end up being an important component of the mix expected near REM stations.

In the meantime, let's give the project a chance.

CHRONICLE

RISING GENERATION FEATURE

WHATEVER BECAME OF THEM?

Long-time readers will remember our "Rising Generation" column, which featured young leaders sharing their vision of the future of commercial real estate. In this issue you'll meet two of them, Anthony Arquin and Philippe Krivicky, who are both enjoying successful careers. In future issues we will be delighted to reconnect with other columnists from this series.

ANTHONY ARQUIN

NICOLAS DÉSOURDY

BRIGITTE DUPUIS

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17

INTERUNIVERSITY COMPETITION

i3c CHALLENGE

IDENTIFYING CITIES OF THE FUTURE

BY FOULQUES DELBAR, JOURNALIST

How do we identify the cities of tomorrow? That was the question that Ivanhoe Cambridge asked students from HEC Montréal and Laval University as part of the i3c Challenge. Registered in the first edition of this interuniversity competition, participants presented innovative proposals focused on financing and data analysis.

T

he i3c Challenge lived up to its promise. In terms of imagining the financing of tomorrow and outlining new performance criteria, the ic3 Challenge was a success. Ivanhoe Cambridge also wanted to come into contact with young talent in data analytics.

"The challenge is a great example of what we're trying to build. It reflects our vision of real estate and technology," said Simon Lauzier, chief financial and business performance officer. Over the past five years, Ivanhoe Cambridge has put in place a digital infrastructure to better anticipate and integrate new developments in the sphere of real estate investment.

However, finding professionals capable of reconcil­ ing the financial aspects with data analysis is not an easy task. The i3c Challenge was launched to address the problem. "We asked the different teams to detect future trends or cities of tomorrow using a database […] Getting young people to use their impressive computer skills to address a more finance-oriented profile allowed us to obtain results that were beyond our expectations," Mr. Lauzier added. The students were able to identify growth drivers for future investments.

Placed under the supervision of mentors from Ivanhoe Cambridge, the competing teams used data from Green Street, the leading provider of commercial real estate information in North America. "The students were able to supplement the data available to them, adding elements they had researched themselves that would help determine future returns," he said. Since the Canadian data is less complete, the research was naturally geared toward the US market.

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COMMERCIAL REAL ESTATE MAGAZINE : : APRIL – MAY 2023

IVANHOÉ CAMBRIDGE

SIMON LAUZIER Chief financial and business performance officer Ivanhoé Cambridge

DETAILED ANALYSIS INDICATES CANDIDATES FOR GROWTH The first-place team ranked three U.S. regions or cities with promising prospects for growth using a neural model that can generate interactive maps from geographical data.

"Based on the data analyzed, the cities of Sacramento and Kansas City, along with Long Island, seem to be the most

1st place

HEC / yellow team

From left to right:

Félix Poirier, Alexandro Tomassi and Islam Abdelatif

IVANHOÉ CAMBRIDGE

attractive for investors," said Alexandro Tomassi, a tax law student at HEC. The three locations are able to meet strong demand for office, storage and production space, and are already home to numerous real estate development projects.

The team in second place also consisted of HEC students. They managed to determine predictions for 5 major asset classes in the US. "We based our predictions on a set of more than 400 variables reflecting the characteristics of cities and their evolution over the past 10 years," said Sarah Poudrier, a business intelligence and accounting student. "We then created a statistical model oriented towards an ESG criteria evaluation system." The method allowed the students to compare cities with each other to identify the most promising. San José was tops in the industrial sector, while Jacksonville stood out in the warehousing sector.

IVANHOÉ CAMBRIDGE

2nd place

HEC / green team

From left to right:

Félix Laporte-Blackburn, Remy Arnou and Sarah Poudrier

COMBINE PERFORMANCE WITH ENVIRONMENTAL ASPECTS Third place was won by students from the Administrative Sciences Faculty at Laval University. The team looked at various factors related to quality of life before correlating their observations with birth statistics and an analysis of migration flows. The study highlighted the strengths of Austin, Texas. "It's a city that seems to be responding well to economic crises and is constructing energy-efficient buildings. The real estate industry there is growing rapidly," noted William Pelletier-Rioux, a finance student.

The different projects sought to link expected yields with a consideration of environmental issues. The predictive model developed by Sarah Poudrier and her classmates fully integrates those aspects, proving that ecology is not an obstacle to profitability. The students from Laval University felt that the city of Austin, which is growing in a sustainable manner, was a good place for a company like Ivanhoe Cambridge to invest. Finally, the winning team integrated data related to green energy sources into their study. A relationship was established between those facilities and the locations where good returns could be obtained.

IVANHOÉ CAMBRIDGE

3nd place

FSA ULaval / green team

From left to right:

Amal Bousnane, William Pelletier-Rioux and Yohann Piché-Nguyen

COMMERCIAL REAL ESTATE MAGAZINE : : APRIL – MAY 2023

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INTERVIEW

PHILIPPE KRIVICKY SENDS A CLEAR MESSAGE

MONTRÉAL OPEN TO DIALOGUE

BY EMMANUELLE GRIL, JOURNALIST

On March 8, 2023 the City of Montréal officially unveiled its action plan for real estate development within its territory. Overview of its key measures and new pilot project.

I

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n an effort to be more agile and responsive, the City of Montréal first sent a strong signal in 2021 with the creation of the Facilitating Unit to establish a dialogue between the city, its elected officials and the economic ecosystem of the real estate sector.

After two years of discussion and planning, a clear plan of action was put in place. A pilot project is now underway in four boroughs (LaSalle, Sud-Ouest, Rosemont–La Petite-Patrie, Ville-Marie), along with the future eco-district of Namur-Hippodrome. An outline of the action plan was presented at a luncheon hosted by the Institute for Urban Development on March 8, with the plan submitted to city council on March 20, 2023.

He described some particularly noteworthy key actions. "First, the plan aims to simplify the entry points for municipal development projects by designating a single project leader. In other words, there will be only one person responsible for the file.

There will also be a complete overhaul of the permit process, as well as a mapping and streamlining of procedures to get projects through more quickly," he added. Plans are also afoot to develop a critical path based on project type, with timelines for faster processing and improving stakeholders' understanding of the roles and responsibilities of each contributing party, as well as those of the various advisory boards.

KEY MEASURES AND 80 PROJECTS ON THE RADAR Philippe Krivicky is the assistant general manager, Economic Development and Public Outreach, a new section created by the City of Montréal in September 2022. He explained that it is a collaborative effort aimed at accelerating real estate development, in order to build full service, inclusive neighbourhoods.

The Facilitating Unit brings together important players from the real estate, university and community sectors. "These stakeholders share with the City a common desire to improve the approval process, to support services and stimulate the completion of top quality, innovative and sustainable projects strongly rooted in their local environments," he said. Their work resulted in a plan listing 23 key actions that focus on a vision of development and a path to successful completion, as well as an emphasis on consultation and communication.

As Philippe Krivicky noted, "Transforming the organizational culture so that real estate projects are seen and perceived as neighborhood catalysts is also essential." To support strategic development projects, a real estate development acceleration committee was also set up, led by general management and borough departments.

COMMERCIAL REAL ESTATE MAGAZINE : : APRIL – MAY 2023

In concrete terms, the action plan will begin in four pilot boroughs and the Namur-Hippodrome sector for a one-year period. Eighty residential, industrial and commercial projects have been targeted – but there might be more – and will benefit from the pilot approach. To qualify, all projects must be of a certain level of complexity and have specific characteristics: • $10 million or more, or $3 million or more • comply with a municipal policy or development priority • include social, affordable and family housing.

JBC MÉDIA BY ÉRIC CARRIÈRE

COMMERCIAL REAL ESTATE MAGAZINE : : APRIL – MAY 2023

21

INTERVIEW

A CLEAR SIGNAL With this action plan, the City of Montréal is also sending a clear message. "It indicates that municipal authorities wish to work in a spirit of rapprochement, which is essential if Montréal is to continue to be a leading metropolis, and if more projects are to be carried out. In that respect, the Facilitating Unit has brought diverse parties into the discussion and has identified irritants. All parties will work together to further develop the economic powerhouse of Québec," he added. He is pleased that bridges have been built between

the various players. "In fact, we're now fine-tuning the program. We're already up and running, and 80 projects have been identified."

Finding facilitating solutions, accelerating the development of projects with positive spin-offs, taking concrete action and adding the necessary resources on the ground will undoubtedly contribute to the success of this strategy. It will also make life easier for real estate developers, who are crucial to the process.

Philippe Krivicky Appointed in 2022, Philippe Krivicky is the new assistant general manager of the municipal Economic Development and Public Outreach branch. He had already established an impressive track record before taking up his new position. He was president of the real estate development and construction division at Cogir, and in that capacity helped develop several innovative real estate projects that focused on mixed use – commercial, residential and office complexes, as well as private residences for seniors.

Prior to that he worked for several years at Rona, notably as Vice-President of Retail, Emerging Strategies. He was also the General Manager of the FIFA U20 World Cup held in Montréal in 2007.

That wealth of experience made him the right man for the job, for he plays an essential pivotal role. "I am a proud Montréaler and I have the city's interests at heart. I accepted the challenge because I want to help move things forward so that Montréal and its businesses can prosper." He wants to unite groups and build bridges between the municipal administration and the business community. "I do have a different profile than what is typically found in public service. But with my background in real estate and my knowledge and experience in the business community, this is a great opportunity to help put Montréal in the spotlight. I want to work for the common good and make sure the ecosystem comes out stronger."

He admits that he still has a lot to learn about public administration, but that the city council has demonstrated openness. "By giving me this job, the administration has shown its willingness to have someone in-house who is keeping an eye on things and asking questions, so that a cohesive plan ultimately moves forward."

JBC MÉDIA BY ROXANE PAQUET

22

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SUSTAINABLE DEVELOPMENT

EQUITY, DIVERSITY, INCLUSION

BASIC CONCEPTS OF ESG PERFORMANCE Jean-Michel Champagne Guest Columnist

ESG factors (environmental, social and governance) help all kinds of firms and organizations to become aware of many aspects of their operations so that they can improve business performance. An important area of focus in recent years is equity, diversity and inclusion (EDI). Many of the ESG factors used to analyze a firm's non-financial performance are now based on EDI elements, and this should be viewed as an opportunity.

The society in which our companies operate is diverse, and having a diverse team allows us to better meet the needs of our stakeholders, to seize business opportunities and to innovate.

Greater awareness of EDI, combined with a focus on integrating social targets and values into corporate strategies, contributes not only to business success but also to the well-being of society as a whole.

As a professor and head of sustainable development at HEC Montréal, Jean-Michel Champagne prepares future managers for emerging business issues and the socio-economic challenges of the climate crisis. Having spent a good part of his career in real estate management, he is particularly interested in working with the industry to make it sustainable and responsible.

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The main issue regarding EDI is the lack of knowledge and comprehension of its basic concepts. That lack is at the root of the polarization we see in public debates. It is essential that business people have a solid understanding of EDI concepts. Here are some key definitions.

Equity ensures fair treatment and equal access to jobs or opportunities for advancement. It also refers to efforts to identify and remove potential barriers to the full participation of under-represented groups in all spheres of activity.

of individuals feels welcomed and respected for their differences, so that all people can participate fully in the activities of the firm or organization.

Initiatives and actions that promote EDI should be seen as enabling an organization to innovate, to create an inclusive climate and, most importantly, a sense of social justice. It is for those three reasons that many ESG factors implemented by investment firms and analysts are based on diversity elements.

For example, one of the most commonly assessed ESG factors is the composition of boards of directors, executive officers and overall staff.

Both the presence of people from underrepresented groups and gender parity are ratios that are easy to calculate and monitor over time.

Diversity refers to the plurality of personal and professional experiences and differences between cultures. It reflects differences in race, colour, place of origin, religion, immigrants, Indigen­ous peoples, ethnicity, disabled persons, gender, sexual orientation, gender identity and age.

The commercial real estate industry is also concerned about EDI issues, given the sociological and relational nature of its activities.

Each lease or contract negotiation with local or international partners is unique, and a better understanding of others' expectations, needs and cultural frames of reference, thanks to a diverse team and open-minded managers, is a valuable asset. For lending agencies or shareholders, that diversity can indicate greater resilience and lower financial risk.

Inclusion is the act of creating and promoting environments where each individual or group

It is not necessary to be part of an underrepresented group to be in favour of EDI. Being

COMMERCIAL REAL ESTATE MAGAZINE : : APRIL – MAY 2023

ISTOCK BY RECEP-BG

an inclusive leader means treating everyone in your organization with respect and fairness, taking action on a daily basis. According to research1, teams led by inclusive leaders are 17% more likely to say they are a high performance team, 20% more likely to say they make sound, high quality decisions, and 29% more likely to state that they work collaboratively.

EDI issues thus have a significant impact on the perform­ ance of organizations, and investment firms are well aware of this. A company's ESG rating is influenced

by these issues. It is strongly recommended that organizations without a solid EDI strategy and policies in place implement an EDI policy as soon as possible.

There is no one-size-fits-all strategy and there are still very few resources available for implementing an EDI strategy. Fortunately, universities are known for making their EDI policies, programs, strategies and management tools available to the public and the business community. Please feel free to consult their resources and learn from them.

1. https://hbr.org/2019/03/why-inclusive-leaders-are-good-for-organizations-and-how-to-become-one

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From left to right: Jean-Marc Fournier, CEO, IDU; Roger Plamondon, President, Broccolini Real Estate Group, and President of the board of directors of the IDU; Luc Rabouin, Responsible for Economic and Commercial Development, Knowledge, Innovation and Design on the executive committee, City of Montréal; Natalie Voland, President, Gestion Immobiliere Quo Vadis Inc.; Philippe Krivicky, Assistant General Manager – Economic Development and Public Outreach, City of Montréal.

JBC MÉDIA BY ÉRIC CARRIÈRE

FACILITATING UNIT

ENCOURAGING NEWS

BY FOULQUES DELBAR, JOURNALIST

At the Our Mayors Series event on March 8, organised by the Québec Institute for Urban Development (IDU), the City of Montréal presented its action plan for facilitating and accelerating real estate development in the city. The news was well received by the industry players attending the conference.

T

he municipal action plan was unveiled by Luc Rabouin, director of Commercial and Economic Development, Knowledge, Innovation and Design, part of the city's executive committee. Mr. Rabouin gave an update on the measures recommended by the Facilitating Unit set up in 2021, which organized in-depth discussions between the various stakeholders. Its aim is to reconcile the needs and demands of the industry with the roadmap established by the municipal administration.

ACTIONS ADAPTED TO INDUSTRY NEEDS Aware of the difficulties involved in developing real estate projects in Montréal, Luc Rabouin spoke of a real paradigm shift as regards working with the industry: "There is a major shift taking place, reflecting the collaborative vision we have been seeking with the real estate sector to accelerate the delivery of projects that are respectful of communities and the environment." Submitted to city council on March 20, the action plan will be deployed in four pilot boroughs, and also in the Namur Hippodrome sector. The objective is to reduce project approval times, optimize the consulting process and provide more predictability to real estate development stakeholders.

THE CITY AND THE INDUSTRY – WORKING TOGETHER Mr. Rabouin then gave the floor to a panel of three speakers: Roger Plamondon, president of the Broccolini real estate group and chairman of the board of IDU; Philippe Krivicky, deputy general manager, Economic Development and Public Outreach for the City of Montréal; and Natalie Voland, president of the real estate development firm Quo Vadis Inc. They also emphasized the pressing need for collaboration among stakeholders so that every real estate project moves forward in an efficient manner.

They expressed their desire to see the Facilitating Unit maintained over the long term, as it allows for constructive exchanges and constitutes a bridge between the City and the real estate sector.

In conclusion the CEO of IDU, Jean-Marc Fournier, commended Valérie Plante for initiating this gesture of rapprochement. He also reminded the audience that "the message of partnership between the City and real estate promoters is addressed to the whole of civil society," thus contributing to strengthening the social fabric of Montréal.

COMMERCIAL REAL ESTATE MAGAZINE : : APRIL – MAY 2023

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ECONOMY

A RESILIENT ECONOMY, BUT FOR HOW LONG? René Vézina Economic Affairs Journalist

Given the risk of making a mistake, presenting economic forecasts sometimes feels like extreme sports, with a big sigh of palpable relief when such projections turn out to be right. In early February the economist Mélanie Ferland, head of research for the Québec Construction Commission, presented her outlook for the construction industry as a whole at a Semaine du béton event in Drummondville. The performance of the economy in the weeks that followed corroborated her projections, which she was kind enough to share with Immobilier commercial.

SLIGHT SLOWDOWN IN RESIDENTIAL CONSTRUCTION At the outset, she noted that the residential sector in particular is likely to be affected by the economic slowdown. Economists still disagree on the true extent of the recession, if any. There will, however, be trickle-down repercussions.

"The number of hours worked will decline between 2022 and 2023, a relatively small decline of about 7% due to a reduction in housing starts from 57,000 to 50,000," she said. "That trend will continue through 2024."

Previous years, it should be noted, have been very busy. In Québec overall, the number of housing starts climbed by 5% in 2022 compared to 2021.

Editor-in-chief of the magazines Le Québec économique, Montréal Economic Powerhouse contributor to Immobilier commercial magazine, René Vézina has practiced journalism for 40 years. He has worked both in the print media, such as Les Affaires newspaper, of which he was editor-in-chief in the early 2000s, and in the electronic media, notably at Radio-Canada, where he spent 15 years.

Over time, he has become a recognized expert for his coverage of economic news.

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"Despite the current pause, the recovery should eventually be strong because of low inventory.

Availability is already limited."

Outlook for Institutional, Commercial and Office Sectors still Uncertain On the other hand, the institutional and com­ mercial sectors may be better positioned to withstand the downturn, which is important given that on average they account for 55% of the hours worked in construction. At the same time, new construction tends to have a ripple effect on real estate, as new projects are likely to revitalize the neighbourhoods concerned.

New construction involves schools, hospitals and major ventures like the new Royalmount development project in Montréal. "Ambitious plans are being made, but we need to see concrete achievements. Already, there is a delay

COMMERCIAL REAL ESTATE MAGAZINE : : APRIL – MAY 2023

MÉLANIE FERLAND Head of research for Québec Construction Commission

in building residences for senior citizens. We will continue with projects currently underway, but beyond that lie unchartered waters."

The office sector faces a more difficult challenge, especially in Montréal where the vacancy rate remains high, despite the conversion of some into apartment buildings. At best, we can expect a pause in 2023 before any new projects are launched.

Overall, the volume of hours worked on cons­ truction sites is thus likely to slip a little. In 2021 the total was 105 million, a figure that rose to 117.5 in 2022, but which could fall back to 114 in 2023.

affordable electricity is in vogue. In the immediate term, it is expected that employees will work 12 million hours in the industrial sector in 2023, the same amount as in 2022.

PROMISING PROJECTS IN THE INDUSTRIAL SECTOR That leaves the industrial sector, which will be marked by regional variations. "That sector will remain fairly stable in 2023," said Mélanie Ferland, "although there will be some movement in a few places, as is the case in Bécancour where huge projects are underway." The municipality will be the hub of the so-called Battery Valley, with complexes such as those of Nemaska Lithium, the German company BASF and the partnership between GM and the Korean company Posco Chemical, which will result in billions of dollars of investment. By extension, the entire Trois-Rivières region will benefit. The town has seen more than 1,000 housing units come online in 2022 and the momentum could continue into 2023.

No forecast can claim to be infallible, and she admits that the downside is that persistent inflation could be a game-changer, especially if it helps keep interest rates high. "It appears that the fight against inflation is proving more difficult than expected. Yes, the economy is holding up better than expected, but we're going to have to keep an eye on the impact of interest rates."

"This new sector will be good for the industry, at least in the medium term, and it's not the only beneficiary," added Ms. Ferland. Québec's clean,

As she noted, "The good news is that construction has held up and is still holding up. We'll see what happens next if things get tougher."

The latest measures of inflation show a slight easing in Canada, while it remains stubbornly high in the U.S., which still weighs heavily on the Canadian economy. Pressure on energy prices, in particular, is having an impact on the consumer price index, and international tensions are affecting the situation. It is therefore possible that the Bank of Canada will wait before starting to loosen its monetary policy.

COMMERCIAL REAL ESTATE MAGAZINE : : APRIL – MAY 2023

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COMMON AREAS

Paul Lewis

PAUL LEWIS, 2019

GAZE SKYWARD Paul Lewis was until recently a professor in the Faculty of Planning at the University of Montréal. From 2014 to 2018, he served as its Dean, and from 2018 to 2020, he served as Associate Vice-Rector for Alumni Relations.

He has been doing urban photography for the past few years as an extension of his years of teaching urban planning. His photography can be seen at paullewis.photos.

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Montréal has several iconic buildings such as the Place Victoria tower, Place Ville Marie and the Olympic Stadium, just a few in a long list of striking structures that define the city.

The Place Victoria tower shown here (a building many still call by its former name, the Tour de la Bourse) borders Victoria Square in the Quartier international sector of the downtown core.

With its 45 floors of office space and two commercial levels, it was the tallest high-rise in Canada in the years following its inauguration in 1963. That is no longer the case, yet it remains one of the tallest buildings in the city.

The original plan was to build three identical buildings that would have formed a triangle.

That did not pan out, which is regrettable, although it is still one of the most remarkable in the city. Designed in the international style, it is an elegant building, its technical floors given pride of place, dividing the structure into three roughly equal parts, which can be fully appreciated when you take the time to gaze up toward the sky.

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INTERVIEW

ANTHONY ARQUIN

A PASSION FOR REAL ESTATE

BY FOULQUES DELBAR, JOURNALIST

Guided by his passions and very open to the world around him, Anthony Arquin has been able to pursue his interests on both a professional level as a lawyer, and on a personal level. A respected attorney appreciated by his peers, he has demonstrated consistency and ambition in meeting challenges that come his way.

A

fter enrolling in law courses in France at the University of Aix-Marseille, the future lawyer made a life-changing decision. He emigrated to Canada at age 19 and completed his law degree at Laval University. At first unfamiliar with Québec law and the world of business, Anthony Arquin learned quickly, advancing up the ladder and making important contacts. His internship in 2005 with Davies Ward Phillips & Vineberg LLP marked his entry into the big leagues. For the past 17 years he has been working happily in his chosen field, developing solid expertise much appreciated by various clients.

number of spectacular projects in the Québec real estate sector.

Me Arquin loves history and architecture. He also has a passion for the world of business, and it wasn't long before he decided to take the plunge into real estate development. "My professional activities allow me to pursue my passions," he said. As a partner at Davies and coordinator of the real estate group for the Montréal office, he focuses on high-level strategic advice for real estate developers, investors and owners. "We help our clients anticipate legal and business challenges in their projects, and find solutions to challenges they encounter along the way," he said.

ACTIVE ROLE IN MAJOR REAL ESTATE PROJECTS In 2009 Anthony Arquin was seconded for four months to the legal department at SITQ, which soon became Ivanhoe Cambridge. He worked on several local and international deals along with professionals who introduced him to various facets of being in-house legal counsel, which made a strong impression. "We can be proud of the quality of the teams working on our provincial pension plans, which has ramifications for many international projects."

He was then entrusted with the management of the Four Seasons Montréal dossier, a multi-use project that involved complex negotiations and in-depth operational considerations about the long-term use of the buildings.

PRESTIGIOUS LAW FIRM Anthony Arquin's career includes taking part in several large-scale transactions, the kind that help transform cities and give them new momentum.

He finds inspiration in his firm's rich history.

"Davies has been at the heart of major real estate transactions in the province for generations," he noted. "Our firm played a key role in iconic projects such as Place Ville Marie and the redevelopment of McGill College Avenue." As an important member of the Montréal office, he has been involved in a 32

COMMERCIAL REAL ESTATE MAGAZINE : : APRIL – MAY 2023

In recent years, Davies has been involved in trans­ actions such as the sale of Cominar REIT for $5.7 billion, the Viger Station redevelopment project and the creation of a joint investment platform for Claridge and Ivanhoe Cambridge. That platform provided access to more than $300 M in equity capital for various development projects in the Montréal and Québec City metropolitan areas. Mr. Arquin has also participated personally in some of the largest-ever real estate transactions in Québec.

Among the high-impact projects in which Mr. Arquin has been involved were the negotiations of a partnership for the redevelopment of the Laurier Québec City shopping mall, as well as the sale of a portfolio of 30 properties to an Ontario real estate investment trust. That deal involved working with two other law firms, and the sale was the largestever multi-residential transaction in Québec.

JBC MÉDIA BY ÉRIC CARRIÈRE

COMMERCIAL REAL ESTATE MAGAZINE : : APRIL – MAY 2023

33

INTERVIEW

The most significant project of his career, however, was the redevelopment of the Windsor Quad around the Bell Centre. "It's a long-term project that I've been working on for over 15 years. It was the spark that ignited a revival of large-scale real estate development projects in Montréal."

INDUSTRY CHALLENGES Anthony Arquin admits that he has been very fortunate to work in a constantly evolving sector.

Right from his start in 2005, he noted a trend emerge that persists to this day, and that is the redevelopment of existing assets into mixed-use, multi-phase projects. "It raises a lot of issues and questions about how building users will interact,

how building services will be used and how costs will be shared. These new real estate models require a lot of business, operational and legal creativity."

It is one of the many challenges the industry will be facing in the years to come. In his opinion, one of the major issues is the industry's ability to develop profitable projects in the current context.

He cites the sharp increases in construction and financing costs, as well as provincial and municipal development fees and taxes, which undermine the feasibility of projects and the ability of buyers and tenants to pay, not to mention transformations resulting from the implementation of ESG (environmental, social and governance) criteria.

PROJECTS THAT TRANSFORM DAILY LIFE He views the housing crisis as an opportunity for the sector to position itself as an important player.

"We want to be seen as a key partner, not as a necessary evil. That's how we will reach a consensus, both with institutions and with citizens [...]

We are seeing collaboration gradually take root, with governments realizing that the solution to the housing crisis lies with those who develop and construct innovative buildings." To address the lack of vacant land in cities, the lawyer advocates for the concept of "smart urban densification," which will give a new vocation to old industrial cores and existing buildings.

Anthony Arquin refers to the work of urban planners and renowned writers such as Jan Gehl or Charles Montgomery, who he believes can "nourish our collective thinking with projects that transform our cities, creating living environments integrated into the urban landscape, each with a dynamic street-level panorama that attracts passers-by, streets that are vibrant with life and activity." He hopes to see the emergence of buildings that are architecturally innovative, encouraging users to live, work and play in downtown areas like the Hudson Yards project in New York or The Well in Toronto.

JBC MÉDIA PAR ÉRIC CARRIÈRE

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COMMERCIAL REAL ESTATE MAGAZINE : : APRIL – MAY 2023

REAL ESTATE WITH PURPOSE Le Newman is a unifying project with many assets: a variety of residential options, original high-quality architecture, sustainable site management and integration with the surroundings. With its condominium complex, a Mostra rental condo and a Jazz residence for active retirees, it fosters a truly urban community in the heart of a municipality teeming with a human experience.

Le Newman, a spectacular multi-family housing concept in keeping with its era.

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INTERVIEW

PASSIONATE, OPTIMISTIC OUTLOOK Anthony Arquin has used his position as a lawyer to develop a broad vision that encompasses the multiple issues involved in developing the cities of tomorrow. He thrives in an environment that puts him in daily contact with builders and visionaries.

"I love walking around town with my children and seeing the physical results of my work. That's what I've always been passionate about, and that's why I chose real estate. You leave behind a very tangible mark of what you've done." Convinced of the essential role of developers, investors and other industry players, he has faith in their ability to create new approaches to development.

"We have the great privilege to be able to make a difference in people's daily lives and to transform our cities, project by project", he said. Indeed, the future looks promising. "Regardless of the economic climate, our sector is one of the most important in society – a cornerstone of urban development. […] Our industry is undergoing a major transformation to adapt to new social, economic, environmental and regulatory realities, but the real estate community consists of innovative, passionate and citizen-oriented individuals. These challenges will allow us to imagine better projects, for the greater benefit of our cities and society."

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QUÉBEC

QUÉBEC CITY HOTEL MARKET RAPIDLY CHANGING Valérie Laurendeau

Alain Roy, É.A. Guest Columnists

Prior to 2020, the overall performance of hotels in the greater Québec City area was very dynamic, but then the market was disrupted by the worldwide pandemic. Travel restrictions and lockdowns dampened the momentum of recent years. According to the World Tourism Organization, the number of international tourist arrivals in Canada in 2021 was estimated at 3.1 million, about 86% lower than in 20191.

2020 AND 2021: DEMAND SHIFTING TO RESORT AREAS Unfortunately, several hotels in the Québec City region had occupancy rates of less than 25% in 2020 while others, in order to avoid substantial losses, simply closed their doors. Combined with the labour shortage, the result was a sharp tightening of the market in 2020 and 2021.

outdoor activities. The social distancing recom­ mended by government authorities, plus the many temporary closures of businesses and indoor activities, resulted in a shift in demand for lodging in resort areas. At the same time, establishments targeting international tourists and a business clientele saw their traffic drop drastically.

Resort sites and establishments located on the outskirts of Québec City, however, generally performed better than those located within the city. Accommodations near outdoor resorts benefited from the growing popularity for

POST-PANDEMIC HOTEL MARKET It was only in the second quarter of 2022 that the Canadian government revoked the require­ ment for international air travellers to have a negative PCR test for COVID-19. Although the

Valérie Laurendeau, É.A. Senior Advisor Alain Roy General director from the Québec office Altus Group

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1. Unwto.org (2022) 145 KEY TOURISM STATISTICS. https://www.unwto.org/tourism-statistics/key-tourism-statistics

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QUÉBEC

travel process is now easier, international air arrivals in Québec have still not returned to pre-2020 levels. However, the trend at present is positive and encouraging for hotels within the city, while occupancy rates for nearby resort areas have been declining, returning to pre-pandemic levels.

Although the trend is still in flux, the following table presents the RevPar differential, a ratio frequently used by the industry. It indicates the multiplication of the average annual rental rate by the average annual occupancy rate in 2022, compared to 2019 for three Québec City sectors.

What's apparent is that the Centre and Old Québec are struggling to regain their pre-pandemic performance levels, while the other two sectors have performed very well since Q3 2022. With its cobblestone streets and old buildings, the Central sector, including Old Québec, is known as the historic district. It attracts mainly a tourist clientele, while the North and East of Québec City, which include Limoilou and Saint-Roch, are lively and trendy districts popular with young travellers.

Finally, the western sector of Québec City is known for its important business hub.

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VARIATION IN REVPAR FROM 2019 TO 2012

Q1

Q2

Center and Old Québec Source: Québec cité

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Q3

Q4

North and East of Québec

Annual

West of Québec

However, our discussions with several stake­ holders in the field indicate that the performance of establishments targeting a business or tourist clientele is not only linked to the low postpandemic return of travellers, but also to the shortage of manpower.

Old Québec has a very diversified lodging offer, often consisting of establishments with less than 30 rooms. Those small hotels generally experienced more difficulty retaining a skilled workforce during the pandemic, unlike hotels in the northern and eastern sectors of the city, where accommodation consists mostly of larger hotels.

Due to the scarcity of skilled labour, hoteliers in Central and Old Québec are finding it difficult to rehire qualified employees, which has a direct effect on hotel performance.

Consequently, current economic factors influence hoteliers' performance. This is a major challenge for all industries, but even more so for the hotel

industry. Indeed, the job market is getting tighter and tighter and specialized manpower is scarce.

That has considerable repercussions on how hotels operate, as well as an impact on the range of services they can offer. Hoteliers then face rising costs, for they must offer higher wages and additional benefits to attract and retain their workforce. Of course, that has a direct impact on their bottom line.

To counter the economic downturn and respond to the labour shortage, there is currently an evident change in strategies on the part of many hoteliers, who are now putting innovation front and centre.

A CHANGE IN STRATEGIES The hotel market is currently in the midst of a period of rapid transformation. In order to improve efficiency and maintain the quality of services, more and more hoteliers are turning to self-service check-in kiosks or autonomous check-in procedures via mobile apps. Investment

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QUÉBEC

building services

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in technology to automate certain processes will therefore play an important role in the coming years. Facial recognition for check-in, more efficient online reservation systems and code generation systems that act as room keys, will also be at the heart of a revamped hotel market.

The past few years have also seen an increase in the popularity of renting guest houses, apartments and cottages on platforms such as Airbnb. In that sense, new offers have arrived on the market.

They compete with traditional hotel rooms, and even the general concept of hotels as we know it.

Loft or 3 ½ room rental apartments within their own hotels are currently gaining popularity with hoteliers as a means to meet some of that demand.

SERVICE EXCELLENCE RELIABILITY

Hotel complexes are thus opening up an additional market, one where customers are looking for the comfort of a self-contained units (so-called hometels) rather than a typical standard room.

Comparable to an apartment buildings, such hotels generally benefit from common spaces like those found in conventional apartment buildings. They include co-working spaces, efficient and secure wireless internet connections, lounges, rooftop terraces, etc. With the growing popularity of Work from anywhere, hotels will become residences for mobile workers. Millennials, who will represent 75% of the total workforce2 by 2025, will be the main players in this new trend.

In conclusion, the hotel market in Québec City is undergoing a major transformation. The pandemic changed our lifestyles, and also the way we work and travel. Hoteliers must also adapt to address the widespread problem of labour shortages, while also striving to meet the new needs of today's travellers. To do so, they must broaden their potential by offering a different product.

Innovating with new technologies to reduce their operating costs is an avenue worth exploring for many resorts and hotels.

speico.com

2. Forbes.fr (2018). Comment Les Millennials Dessinent L'Entreprise De Demain. https://www.forbes.fr/management/comment-les-millennials-dessinent-l-entreprise-de-demain/

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Where Working and Living Intersect

PVM is a business campus designed to enhance the workplace experience with its vibrant esplanade, offering a varied event programming, its modern commercial galer , and its unique dining experience featuring a biergarten concept and a reinvented gourmet area.

Discover a network of possibilities:

Patrick Vallières Patrick.Vallieres@colliers.com 514 764-8195

WORD FROM THE IDU

ACCELERATE REAL ESTATE DEVELOPMENT : TIME TO TAKE ACTION! Jean-Marc Fournier

CEO jmfournier@idu.quebec

T

hree years ago the Québec Institute for Urban Development emphasized the need to accelerate the authorization process for real estate projects, and proposed the creation of a project monitoring committee. More specifically, we suggested that the City of Montréal implement a project processing system based on performance indicators and follow-up tables that specify expected processing times, and include automatic notification when scheduled deadlines expire.

READY… During the IDU Our Mayors Series webinar in February 2021, the mayor of Montréal announced the creation of a Facilitating Unit, so that industry players and municipal officials share a common understanding of the issues, and together identify actions to improve project processing.

Since that announcement and up until last December, several meetings were held with a working group led by Luc Rabouin, head of the Economic Development section of the City's executive committee. The objective of the meetings was to establish a collaborative approach between developers and the municipality, and to improve project monitoring and organizational performance.

This acknowledgement by municipal authorities of the existence of administrative barriers, their desire to develop a partnership with the real estate industry and their willingness to adopt a new approach are to be commended.

SET… On March 8 this year, Mr. Rabouin gave a speech to IDU members at a conference, and unveiled the action plan that resulted from the Facilitating Unit consultations. Here is a brief description of the main elements of the plan.

For each targeted borough, the Director of Planning will be designated as the "single project owner." He or she will be assisted by a project development commissioner. For major projects, the City plans to institutionalize the practice of a project kick-off meeting involving both political and administrative teams. A strategic projects dashboard will show the progress of each dossier,

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and will serve as the key tool used to support a new committee "to monitor strategic issues and accelerate real estate development". The committee will consist of each borough's director and urban planning director, as well as the assistant general managers of Executive Committee sections: Economic Development and Public Outreach; Urban Planning, Mobility and Infrastructures; and Citizen Services. A report will be submitted to the head of Economic and Commercial Development, the executive committee and the mayor of the borough in question.

In other words, the aim is to work with the various municipal departments, to have each borough and the City join forces, and to engage different administrative and political levels. In the long term, the new procedure will also involve other organizations that are often called upon, such as Hydro-Québec and the Ministry of Transportation.

In 2023 strategic pilot projects will be developed in four boroughs, and also in the Namur-Hippodrome sector.

The concept will be gradually applied throughout the city.

In addition to this new approach, the City announced the adoption of a flexible regulatory framework that will facilitate authorization and completion of real estate projects. With this same goal in mind, the City will measure the effects of municipal requirements on project completion times and costs.

The Montréal action plan to accelerate real estate development complies with the commitments made by the mayor in 2021. We are pleased with this progress.

GO! The initial steps demonstrated political will on the part of municipal officials, a desire to improve relations among the various parties concerned, to provide predictability and improve project flow. It's time to get moving, now more than ever.

Like other sectors, the real estate industry is anxious about the future. The residential sector must try to correct a profound imbalance between supply and demand, and ensure affordability. While the Canada Mortgage and Housing Corporation (CMHC) indicates that the existing rate for building new units must be doubled, the current economic context is causing a slowdown. We are not heading in the right direction.

Remote work and e-commerce are adding to the pressures of the inflationary crisis in the office and commercial sectors. In the industrial sector, prices are exploding. On the one hand, the market is being tested by a shortage of land suitable for new investment. On the other hand, the reduced capacity of Hydro-Québec, combined with uncertainties about the new energy allocation process, makes it urgent to adopt a comprehensive, Québec-wide industrial policy.

The real estate industry intends to work with the City of Montréal to address climate challenges and to create comprehensive, vibrant and inclusive living environments.

Those goals can be achieved by creating the right conditions for investment that will encourage revenue growth for the City, and allow it to respond to the many pressing needs of citizens without increasing the property tax burden.

It's time to take action!

ISTOCK BY ELIJAH-LOVKOFF

COMMERCIAL REAL ESTATE MAGAZINE : : APRIL – MAY 2023

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REAL ESTATE OVERVIEW

ANDRÉ G. PLOURDE

A PASSION FOR REAL ESTATE DEALS

BY NATHALIE SAVARIA, JOURNALIST

For the past 34 years, the executive vice-president of Colliers International in Montréal has pursued, with his team and with real panache, a dynamic career as a real estate broker.

A

fter obtaining a B.A. in business administration from the University of Québec at Montréal in 1989, André G. Plourde went to work for the Groupe Immobilier de Montréal-Québec, an agency founded by his father. A true mentor for his son, he taught him the ins and outs of the business and instilled in him a concern for a job well done and the values of honesty, transparency and respect.

In 1995 Roland Plourde was preparing to retire, but his son did not feel ready to take on the responsibility of managing an office and staff. "I was also interested in working outside the family business," he said.

THE KEVLAR YEARS In 1996 the young broker was hired by Kevlar, a firm recently founded by its president, René Bellerive, another key person in his career path. During its first five years of operations, Kevlar was a very successful real estate brokerage. Then in 2001 the company shifted its focus to real estate investment and development.

REVIVAL AND EXPANSION OF GROUPE IMMOBILIER André G. Plourde decided to leave Kevlar and return to Groupe Immobilier de Montréal-Québec. He focused on landlord representation, an expertise he began to develop at Kevlar when working on a major contract to lease 2.6 million square feet of industrial and office buildings owned by an investment fund.

For almost 15 years he worked on expanding his agency, specializing in office assets and setting up an experienced team.

The expansion of the firm occurred in two phases.

From 2001 to 2007 the company was mainly active

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COMMERCIAL REAL ESTATE MAGAZINE : : APRIL – MAY 2023

in class B buildings and former industrial buildings transformed into offices and lofts. From 2007 to 2015 the company shifted to prestige buildings, thanks in particular to a fruitful business relation­ ship with Allied Properties. André G. Plourde was Allied's exclusive broker in Montréal from 2005 to 2019 for the leasing of its entire portfolio. Among the mandates entrusted by Allied (which is still his client) he cites the Cité du Multimédia, where he found himself "in the company of major tenants".

FIRM SOLD TO COLLIERS INTERNATIONAL The success of his real estate group did not go unnoticed. He was asked a number of times if he wanted to sell the agency, but he did not feel ready. He noticed, however, a clear trend among large office building owners – a focus on asset management and outsourcing operations and space leasing to third parties, particularly large brokerage firms.

Finally, in December 2015 André G. Plourde concluded the sale of his agency to Colliers International, a Canadian agency with a strong global presence.

"I came to the conclusion that, despite the great success I had achieved with the Groupe Immobilier, I didn't have the resources or the means to compete with large real estate agencies. I realized that if I wanted to move to another level for the last 10-15 years of my career, I needed a better performing vehicle."

PRESTIGE CLIENTS AND MANDATES After the sale, a core group of his brokerage team followed him to Colliers, i.e. Julie Côté, François Laurence and Magali Bannier, who is now coordin­ ator for client projects. More recent additions to the team include Julien Méthot, Thomas Coutu and

JBC MÉDIA BY DENIS BERNIER

ANDRÉ G. PLOURDE Executive Vice-President Colliers International COMMERCIAL REAL ESTATE MAGAZINE : : APRIL – MAY 2023

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REAL ESTATE OVERVIEW

Patrick Vallières. Together they form the landlord representation team for the Colliers Montréal office, led by André G. Plourde.

Currently the team oversees 8 million square feet of leased space. In 2022 they concluded close to 80 transactions. André G. Plourde and Julien Méthot were respectively recognized as the first and second best producers of office space leases at Colliers Montréal.

JBC MÉDIA BY DENIS BERNIER

From left to right: In the front: Julie Côté, Associate Vice-President; André G. Plourde, Executive Vice-President; Julien Méthot; Vice-President.

In back: François Laurence, Vice-President; Thomas Coutu, Associate; Magali Bannier, Customer Projects Coordonator; Patrick Vallières, Vice-President.

BIENVENUE Cain Lamarre is proud to

welcome M• Patrice Picard to its Real Estate Law team.

His expertise adds to a solid team of more than 20 lawyers, notaries, and tax specialists devoted to this field of competence.

Welcome aboard!

CAIN LAMARRE LAWYERS & NOTARIES

46

HERE TO GET VOU THERE CAINLAMARRE.CA

COMMERCIAL REAL ESTATE MAGAZINE : : APRIL – MAY 2023

Among their most notable coups, the broker highlighted the acquisition in 2022 of an important portfolio of five iconic office towers owned by Ivanhoe Cambridge, totalling 3.6 million square feet: Place Ville Marie, 1500 Robert-Bourassa, Le Méco and Montréal Herald in Montréal, as well as the Price Building in Québec City.

He also mentioned Solar Uniquartier in Brossard, Devimco's mixed-use development project that will be connected to the REM light rail network. "Despite the context of the pandemic, in the last three or four years we have managed to lease 400,000 sq. ft. of office space in three new buildings."

He is also very proud of the contract with O Mile-Ex, now a vibrant centre of artificial intelligence in Montréal. After leasing that versatile workspace to TGTA, André G. Plourde's team still acts as leasing agent for the new owner of the complex, Spear Street Capital, which purchased O Mile-Ex in autumn 2019.

THE MONTRÉAL OFFICE MARKET Although the team's record is one of solid performance, the broker is not "in denial" about the market: "In February 2020 just before the pandemic, the vacancy rate in Montréal was about 7% [...]. Almost three years later, that rate has more than doubled to 15 or 16%. In contrast, the top six or seven

buildings downtown, the so-called premium towers, have a vacancy rate of less than 6%, remaining stable despite the pandemic and rising rents."

"I am responsible for relations with the most important clients, but I still love getting involved in the nitty-gritty. I love the excitement of negotiations, from the moment we show the space all the way up to signing the contract."

– André G. Plourde

He mentioned that long before the pandemic, large owners of older office buildings made sure to preserve and improve their assets by investing heavily in rejuvenating their equipment and increasing their service offering, as is the case with 1 Place Ville Marie.

Although he believes that remote work is here to stay, he remains optimistic about the future of office space. "It's certainly not the end of this asset class. But it's the best performing buildings in their respective classes that will fare better. For the others, it will be difficult."

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He also believes that there is a lack of worldclass buildings and prestigious office space in Montréal." In that regard, he is pleased with the construction of the new National Bank head office, and would like to see other new buildings of the calibre of the Deloitte Tower and Manulife House.

A STABLE ANCHOR For a man who defines himself as passionate about real estate deals, teamwork is essential to succeed in today's commercial real estate brokerage market, as success requires a wide range of specialized knowledge. "Our combined talents make us significantly better."

André G. Plourde considers himself a "unifying leader, a stable anchor" within the team, of which he is very proud. "I am responsible for relations with the most important clients, but I still love getting involved in the nittygritty. I love the excitement of negotiations, from the moment we show the space all the way up to signing the contract."

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COMMERCIAL REAL ESTATE MAGAZINE : : APRIL – MAY 2023

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PROPERTY LAW

TWO OFFERS, TWO ATTEMPTED TRANSFERS OF TITLE… WHO WINS? Me Sylvie Bouvette Guest Columnist

Here is a decision of the Québec Superior Court 1 regarding a second offer to purchase, to take effect once the first one falls. The holder of the second offer decided to try to transfer title.

Les Placements Luc Poirier inc. (PLP) presented the second offer in question on June 27, 2018, for a building in Montréal valued at $7,300,000 (the PLP Offer). A promise to purchase the same property had been submitted by La Malterie Development (La Malterie) on October 16, 2015 for the sum of $5,500,000 (the Principal Offer).

PLP sought legal recourse to enforce the transfer of title and pre-registered its claim to the property in the land registry office on June 4, 2019 claiming – as did the seller Quonta Holdings Limited (Quonta) – that the Principal Offer had lapsed. La Malterie then filed to have the right to transfer title duly acknowledged in its favour and as a matter of priority.

The Principal Offer granted to La Malterie several options, such as allowing it to extend its due diligence for up to three more years, which could be exercised upon payment of additional amounts. The options were all exercised, with the result that the signing of the deed of sale was to take place 60 days after the expiration of the last of those periods, i.e. April 2, 2019.

Sylvie Bouvette is a partner at Borden Ladner Gervais LLP/ S.E.N.C.R.L., S.R.L. She represents sellers, buyers, joint ventures, lenders and borrowers in real estate transactions and financings.

She was selected by her peers for inclusion in the 2016 edition of The Best Lawyers in Canada® in the real estate law category.

The title search carried out by La Malterie's notary revealed various title problems, including some old encumbrances and an undischarged mortgage. The existence of those problems was causing issues with the mortgage holder, who was financing the purchase of the building. In addition, a new certificate of location showed some anomalies, including encroachments. It should be noted that under the terms of the Principal Offer, the owner was selling the building with a legal guarantee, i.e. "with a good and marketable title, free and clear of any mortgage, charges or encumbrances". La Malterie therefore demanded that Quonta correct the deficiencies. The notary retained by La Malterie nevertheless succeeded in having certain charges written off, without Quonta being notified in a timely manner.

After corresponding back and forth, Quonta and La Malterie met on April 2, 2019 to discuss the progress of the case. It is unclear from the evidence whether or not an extension of the closing date had been agreed upon. In the

1. Placements Luc Poirier inc. c. Quonta Holdings Limited 2022 QCCS 4855.

ISTOCK BY DNY59

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COMMERCIAL REAL ESTATE MAGAZINE : : APRIL – MAY 2023

days or weeks that followed, title insurance was obtained but certain title defects could not be corrected, leading Quonta to declare on May 8, 2019 that the Principal Offer was null and void. La Malterie claimed the contrary, stating that it was indeed still valid.

Quonta submitted three reasons why it considered the Offer lapsed, namely: • La Malterie's failure to meet the April 2, 2019 closing deadline; • Quonta's inability to deliver clear title, free of encumbrances and encroachments; • La Malterie's bad faith, given that it had concealed the fact it had corrected certain defects affecting the building, leaving Quonta to work on their removal, all in order to gain time to obtain financing.

THE JUDGE REJECTED ALL THREE ARGUMENTS. First, the closing date was not stipulated as mandatory, and Quonta's behaviour was not that of someone who considers himself no longer bound by his obligations. It could not refuse to postpone the sale when it had not itself fulfilled its obligations to deliver clear title.

The second reason cannot be retained either, because Quonta had to give the opportunity to La Malterie to transfer title within a reasonable period of time, being satisfied with the building as it was, despite its declared defects.

As for La Malterie acting in bad faith, it did not constitute a breach serious enough to justify it as a reason to consider the Principal Offer as lapsed.

Moreover, La Malterie met the prerequisites for a title transfer, namely (i) the issuance of formal notice (done in response to PLP's action), (ii) the issuance of a deed of sale (which did not have to deal with the defects to be corrected) and (iii) the agreement to pay the price (only when due, i.e., on the day of the signing of the deed). The Court referred to the fact that the cash portion due at closing had already been paid in trust to La Malterie's lawyers, including $3 million for the mortgage. The judge considered that, even though the lender had conditions prior to its disbursement, they were customary and reasonable. The ability to pay the price was therefore demonstrated.

Finally, the action to transfer title must take place within a reasonable time frame. Even taking the date of May 8, 2019 as the time when Quonta refused to sign the deed, the Court would have found that La Malterie acted diligently in instituting proceedings on June 28, 2019.

Consequently, transfer of title was granted in favour of La Malterie, and the pre-registration made by PLP was removed from the registry.

Note that a motion to appeal the ruling was filed on February 22, 2023.

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LIB AYLMER RESIDENCE

EMERGENCE OF A CONCEPT

BY FOULQUES DELBAR, JOURNALIST

A brand new residential complex for people aged 55 and over was inaugurated on March 15 in the Aylmer sector of Gatineau. Built on the site of a historic building in the neighbourhood, this rental building is designed to meet specific needs and uses.

T LIB AYLMER

he inauguration ceremony was attended by the mayor of Gatineau, France Bélisle, accompanied by members of city council and the executive committee of the EMD-Batimo Group, the developer and operator of the project.

Residents also attended the event. Located in the heart of Aylmer, a stone's throw from its historic centre, the complex includes 160 rental condos as well as several common areas (inner courtyard, billiard tables, community kitchen, terrace, etc.).

HERITAGE ENHANCEMENT The project was designed to integrate and enhance the Aylmer Academy, a former school built in 1861. Consulted during citizen meetings, the residents of the neighbourhood and local associations expressed their desire to preserve the iconic building, part of Aylmer's history. It is now home to four residential units in the new complex, while continuing to display the features that make it so architecturally distinctive. Well served by public transit, the EMD-Batimo project is in line with the City of Gatineau's sustainable transportation plan. It also features a wide pedestrian walkway to facilitate access to shops and services on the thoroughfare that runs alongside the building's main façade.

ATTRACTIVE RESIDENTIAL CONCEPT An instigator of real estate projects in diverse Québec communities, EMD-Batimo is no stranger to developing rental properties for the 55+ age group. The Lib Aylmer is part of a growing trend to offer neo-retirees a living environment that is not only quiet and safe, but also provides access to recreation and everyday services. "From the outset, the Lib Aylmer was designed to meet the specific needs and expectations of retirees and semiretirees who want to sell their homes but are not ready to move into a seniors' residence," said Francis Charron, president of Batimo and vice-president of EMD Construction.

LIB AYLMER

From left to right: Judith Neveu, Vice-President – Sales, Marketing & Operations, EMD-Batimo; Sylvie Picard, Lib Aylmer General Manager; Caroline Murray; Municipal Councillor, Deschênes District; France Bélisle, Mayor of Gatineau; Francis Charron, President, Batimo, and Vice-President, EMD Construction; Véronique Leblanc, General Manager, EMD-Batimo; Gilles Chagnon, Municipal Councillor, Lucerne District.

COMMERCIAL REAL ESTATE MAGAZINE : : APRIL – MAY 2023

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FRESH TAKE

THE HUMAN FACTOR ESSENTIAL IN COMMERCIAL REAL ESTATE

Anissa Errai

As consumer appetite for e-commerce continues to grow and offices are not operating at full capacity, commercial real estate owners and managers are working to transform their work spaces. How can they make them more attractive? Three marketing differentiators are involved: people, services, technology. Let's consider the human factor first.

Guest Columnist

CLIENTS, CLIENTS, CLIENTS! For all your projects, whether they be workspace design, the addition of active mobility facilities, a more nutritious food supply, a neighbourhood delivery program or setting up a gym, everything must start with an emphasis on the people using the space or service.

Vice-president, Consulting and Strategic Planning for the SGM Agency, Anissa Errai has more than 10 years’ experience in site-specific marketing, and is head of the strategic team focused on designing customer experience and rethinking spaces. Her track record in marketing commercial and multi-use destinations, together with her knowledge of local and tourist clienteles, led her to develop a design thinking method adapted to each particular development or redevelopment project. Inspired by design trends, that approach contributes to new designs and perceptions of an ever-evolving cityscape.

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While many talk about the importance of the customer experience, the facility management association JLLT recently noted that more than 60% of commercial real estate professionals don't use customer data, or don't know to use it to guide their business decisions1. Yet knowing your customers in depth allows you to build a flawless customer transaction free of irritants, creating an emotional connection with your brand and a memorable experience. Studying and understanding your customers will help you know their needs. How can you save them time?

How to surprise them? How do you exceed their expectations?

that establish a strong connection with their customers. The example of the microbrewery Tite Frette, which tops the list, speaks volumes2.

Its success is directly linked to its employees' passion for beer. The employees convey that passion to clients with their thorough knowledge of the firm's products, communicating their pleasure and emphasis on excellent service.

COMMUNITY-FOCUSED WORK ENVIRONMENTS The importance of the human factor can also be observed in the world of work. The need to connect with colleagues is the primary reason why employees are physically present in the office. According to a Microsoft study (2022), "84% of employees will be motivated by the opportunity to socialize with colleagues, while 85% will be motivated to rebuild team bonds."3

For the user experience to be a real differentia­ tor, you must take the time to take a good look at your customer base – daily visitors, one-offs, locals, tourists – and to understand the behaviours of different generations.

USE THE HUMAN FACTOR TO MAKE A CONNECTION The human factor is at the heart of the ability to create a strong emotional connection. It comes as no surprise to note that retailers at the top of the 2022 Léger WOW Rankings are those

1. Jllt.com (2022). 2023 commercial real estate outlook: Top trends to know. https://www.jllt.com/blog/commercial-real-estate-outlook-2023/ 2. Lapresse.ca (2023). Tite Frette, champion de l’expérience en magasin. https://www.lapresse.ca/affaires/entreprises/2023-01-17/commerce-de-detail/ tite-frette-champion-de-l-experience-en-magasin.php 3. Crast.net (2022). Microsoft demande aux entreprises de « re-recruter » des employés à leurs postes. https://crast.net/167848/microsoft-asks-companies-tore-recruit-employees-to-their-positions/

COMMERCIAL REAL ESTATE MAGAZINE : : APRIL – MAY 2023

How, then, can buildings be redesigned to build those connections? There are a variety of solutions that can be adapted to your situation, to the location of your building and the communities that use it: creating social spaces, establishing partnerships and/or programming events. Some companies are implementing exchange programs to create and enhance a sense of community by means of community-based experiences, opportunities to get together to eat and to chat, and to make locals aware of a firm's sustainable development efforts.

Those human-centric experiences are supported by a technology ecosystem that facilitates the journey, saves time and personalizes offerings.

Humans and technology complement each other, creating memorable moments and a strong

emotional connection. A number of devices, software programs and systems are increasingly being adopted by our industry, including artificial intelligence, which continues to impress. Stay tuned for our next article!

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ONE ON ONE WITH...

ROBERT J. VÉZINA

EYES ON THE FUTURE

BY FOULQUES DELBAR, JOURNALIST

As the next edition of the Montréal of the Future exhibition approaches, the business and event management consultant Robert J. Vézina sat down for an interview with Immobilier commercial. A look at a unique career path, marked by the success of an event that has become an essential part of Montréal's real estate landscape.

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B

orn and raised in Montréal, Robert J. Vézina soon developed a taste for organizing events.

He was student council president at Collège de Montréal, and later head of the socio-cultural committee at Collège Jean-de-Brébeuf, the two institutions he attended before studying marketing and social sciences at McGill University. It was there that he was entrusted with organizing the university's Open House in 1986. At the time, McGill College Avenue was being transformed into a desirable downtown location lined with buildings such as Montréal Trust Place and the Industrial Alliance tower. "I asked the developers and the City of Montréal to provide us with 3D models, which we then displayed in the Faculty of Management

Story builders

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building," he noted. With Phyllis Lambert as honorary patron, the exhibit proved to be a resounding success.

After completing his studies, Robert J. Vézina began his professional career with the public relations firm Gervais, Gagnon & Associés. As director of special events, he was responsible for the inauguration of new buildings for a number of the firm's clients, buildings that helped shape the city's urban look and appeal.

"It was through that experience that I really got to know the world of real estate and construction," he said. Robert J. Vézina organized events to celebrate the completion of major real estate projects such as 1000 De La Gauchetière, 1250 René-Lévesque, the Canadian Centre for Architecture and the Grande Bibliothèque du Québec.

The industry reference in the creation of evolving living environments, designed today, but envisioned for tomorrow.

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ONE ON ONE WITH...

A KEYSTONE EVENT Beginning in 2006, Mr. Vézina focused on a new project. "People love to see 3D or virtual models because they provide a good glimpse of the city's future, so I took the concept I had imagined at McGill and developed it on a larger scale. That led to the Montréal of the Future event." Every two years, the exhibition presents various projects that will shape the future of an ever-changing city. "It's about sharing information and exchanging ideas, but also about promoting the increasingly important development of Montréal and the surrounding region. The event offers promoters an opportunity to make their projects known, while also demonstrating their leadership and commitment to the city's future," he added.

During Montréal's 375th anniversary celebrations in 2017, he put together a retrospective entitled De Ville-Marie à demain, and also established his own real estate events firm, Gestion Villes du Futur.

The firm took over the organization of the biennial Le Montréal du Futur, a task previously shared with BOMA Québec. The first edition took place in the grand hall of the Caisse de dépôt et placement du Québec, while the second was presented at the Grande Place in Complexe Desjardins before eventually moving to 1250 boulevard René-Lévesque. As he put it, "The exhibition is always well attended, not only by people from buildings hosting the event, but also by individuals from sectors we have specifically targeted as potential attendees. The appeal of this biennial is obvious."

WHAT DOES THE FUTURE HOLD FOR MONTRÉAL? The 2023 edition will take place in three iconic buildings: Place Victoria, the CIBC tower and, most notably, 1000 De La Gauchetière.

"That building has beautiful open spaces and serves as a veritable hub for the downtown business community," he said. The event gets underway on opening night (June 13), and the various sites will be accessible free of charge throughout the week from June 14 to 20. Projects of various kinds will be presented in the form of 3D models or video presentations. Organizers are also planning a section featuring new technologies that will showcase innovations in robotics, automation and artificial intelligence.

For Mr. Vezina it is a unique opportunity to zero in on how the city is evolving. "New buildings are blurring the divide between downtown and the river. We are also seeing the appearance of taller buildings, more slender than in the past, indicating a trend towards greater boldness. On the outskirts, major projects will redefine the future of the city. We are currently experiencing a great renaissance in Montréal, with an emphasis on eco-responsibility and priority given to green spaces." Looking toward the future, Robert J.Vézina encourages exhibitors to present inspiring, visionary projects.

"Montréal needs to adopt a bolder approach. We hope that our event can contribute to that momentum."

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MIPIM

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Ecological Transition and Housing at the heart of Discussions MIPIM was officially opened by Christophe Béchu, the French Minister of Ecological Transition and Territorial Cohesion, who talked to real estate industry decision-makers about concrete solutions that will help us adapt to the worldwide challenges of global warming. The Minister also inaugurated the new "Road to Zero" space, dedicated to innovation and decarbonization. MIPIM itself was a signatory of the "Road to Zero Alliance" coalition, together with major players in the sector. The search for sustainable solutions was truly the main thrust of the event, as indicated during the MIPIM Awards, which paid tribute to 13 projects around the world focusing on ESG criteria.

Housing was also a central theme. MIPIM launched the first edition of the Co-Liv Summit, which emphasized coliving. More than 300 participants discussed this new class of managed residential assets, which is one answer to the shortage of affordable housing. The French Minister for Housing, Olivier Klein, spoke at length with investors, developers and architects about the supply crisis, the cost of land, investment in thermal renovations, the status of private landlords and wasteland development funds. These discussions about housing – and ecological transition – will continue at the MIPIM Asia event (December 5 and 6 in Hong Kong), and also at the new MIPIM New York event (November 29 and 30).

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Greater Montréal Delegation: A Big Success Organized by Investissement Québec, the Montréal Metropolitan Community and the City of Montréal's economic development service, the delegation from Greater Montréal was particularly well represented at MIPIM this year. Québec real estate industry specialists were very active, meeting investors at the booth, attending conferences and taking part in business meetings. Participants also had the opportunity to meet with Michelle Boisvert, Québec's delegate general in Paris, during a cocktail reception hosted by Investissement Québec. In short, the Montréal delegation was a great success. The City of Winnipeg also had a notable presence at the event this year.

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WOMEN WITH EXPERTISE AND INFLUENCE

PRE-EMPTIVE RIGHTS

URBAN PLANNING THAT COMPLICATES REAL ESTATE TRANSACTIONS

Fabienne Racicot Guest Columnist

Pre-emptive rights allow government or para-governmental public entities (the beneficiary) to acquire certain properties located within its territory for sale or disposal by assuming the right of first refusal for the promoter-buyer. While the City of Montréal has had this right since September 2017, almost all municipalities, cities and public transit corporations in Quebec can now avail themselves of this right as of June 10, 2022.

In order to be able to exercise that right of first refusal, the public entity in question must:

reception of the notice of disposal, the authority has 60 days to exercise its right of first refusal.

(1) legally determine the territory in which it may exercise its right of first refusal and the purposes for any property or building so acquired; and

The legislation creating that right has nothing to say as regards many situations that frequently arise in the context of real estate transactions.

That silence has the effect of complicating trans­ actions, as can be seen in the following cases.

(2) specifically identify the property subject to that right by notifying the owner of its preemptive right of first refusal, and registering that notice in the land register for the property in question.

The owner of a property subject to a notice of assessment may not sell or otherwise dispose of it without first serving notice of disposal to the public entity concerned. Failure to do so renders the transaction null and void. Following

Fabienne Racicot is a commercial real estate lawyer at Gowling WLG and member of CREW M. As part of her practice which focuses on commercial leasing and real estate transactions, she advises and represents real estate owners, tenants and other major players in the real estate market. In this regard, she regularly drafts and negotiates commercial leases, offers to purchase and other complex agreements.

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• Block sale properties: If a promise to purchase includes properties subject to preemptive right and some that are not, and if the public entity purchases only subject properties, the promisor-buyer might not wish to purchase the remaining properties.

The owner would thus lose both the opportunity to dispose of more properties and the portion of the sale price allocated to the unsold properties.

• Sale of shares: While it seems clear from the text of the legislation that the pre-emptive right applies only to the disposal of property, the parties to a transaction may nonetheless be reluctant to proceed with a sale of shares in the corporation that owns a subject property, for fear that the transaction will be challenged in court.

• Promisor-buyer's previous commitments: The legislation does not specifically address cases where a government entity exercises its preemptive right to a property or building whose sale price is reduced because the promisorbuyer has agreed to carry out repairs or corrective measures within a certain period of time after the sale, an undertaking that is inconsistent with the entity's plans for the building.

In conclusion, for both the promisor-buyer and the owner of properties subject to pre-emptive right, along with their respective legal advisors and real estate brokers, the existence of that right can complicate the negotiation process. It may have concrete repercussions on the structure of the negotiations and increase the risks of losing a good business opportunity, for both the owner and the promisor-buyer.

COMMERCIAL REAL ESTATE MAGAZINE : : APRIL – MAY 2023

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INDUSTRY INFO

AVIS DE NOMINATION

MACH ANNOUNCES PURCHASE OF 4 COMMERCIAL BUILDINGS NEAR GALERIES DE LA CAPITALE SHOPPING MALL IN QUÉBEC CITY

New General Manager at Avison Young Québec

MACH recently announced the acquisition of 4 commercial buildings on Bouvier St., just south of Galeries de la Capitale in Québec City. The 184,000 sq. ft. commercial complex, which is 100% occupied, is strategically located in one of the busiest areas of Québec City, giving it exceptional visibility and accessibility.

MACH

Avison Young is pleased to announce the appointment of Patrick Laurin as Managing Director of the Montréal office.

A partner with a degree in engineering and an MBA, Patrick has 10 years of experience in the real estate consulting and brokerage industry (Devencore and Avison Young).

This decision is a testament to the company's commitment to bringing a new generation of talents to the firm. Mr. Jean Laurin will continue in his role as President of Avison Young Québec.

FUTURE UNIVERSITY CENTRE IN LANAUDIÈRE REGION

INAUGURATION OF LEED ID+C SILVER CERTIFIED PREMISES OF RETRAITE QUÉBEC

A project submitted by Medifice, the City of Terrebonne and the Fonds immobilier de solidarité FTQ investment fund received the highest score in the Lanaudière Regional University Centre's call for applications for the development of a local campus. The partners plan to build a university district in the heart of La Croisée urbaine, a fast-growing sector of Terrebonne.

According to their business model, initial delivery could be expected as early as 2025.

VILLE DE TERREBONNE

Retraite Québec, a tenant in the new 1055 René Lévesque East building managed by the Alfid Group, recently inaugurated its new LEED ID+C Silver premises built by Alfid Construction. This state-of-the-art facility was designed to minimize environmental impact, and to provide exceptional energy performance with the goal of maximizing the comfort of occupants. It is equipped with an indoor environmental control system and was built using eco-friendly construction materials, a reflection of a commitment to reduce carbon emissions and achieve long-term energy savings.

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GROUPE ALFID

Fondaction and Fiera Immobilier joined forces and worked with the developers TGTA and Maître Carré (TGTA-MC) on a vast building upgrade project, turning the former Grace Dart Hospital, a heritage building at 6085 Sherbrooke St. East in Montréal, into an extended care centre. The $135 million real estate project includes 299 residential rental units and provides access to more greenery for all neighbour­ hood residents. Adjacent to the Cadillac subway station, this new residential hub will promote active transportation.

FONDACTION

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