Public Works and Government Services Canada
Symbol of the Government of Canada

Real Estate Initiative

The Government of Canada has closed sale and leaseback of seven federal office properties:

  • Calgary – Harry Hays Building
  • Edmonton – Canada Place
  • Toronto – Joseph Shepard Building
  • Ottawa – Thomas D’Arcy McGee Building and the Skyline Complex
  • Montreal – 305 René Levesque West and 4225 Dorchester West

The properties were sold to Larco Investments Ltd. for $1.41 billion and will be leased back for a total of 25 years. Larco Investments Ltd. is a 100% Canadian-owned real estate company with over 30 years in the industry.

This transaction is the result of a study Public Works and Government Services Canada commissioned last September. After reviewing 40 Crown-owned office properties across the country and various options for more cost-effectively and efficiently accommodating federal departments, BMO Capital Markets Real Estate Group and RBC Capital Markets Real Estate Group Inc, recommended the government sell and lease back certain properties.

In March 2007, the Government of Canada announced it was moving forward on the first step in a two-step process for the possible sale–leaseback of these properties.

  • Step One would be to market the properties to obtain bids — BMO Capital Markets Real Estate Group and RBC Capital Markets Real Estate Group Inc. marketed the properties on behalf of the Government of Canada between May 1 and June 12, 2007.

  • Step Two would be to analyze the top bid to help the government determine if selling and leasing back made financial sense — In June 2007, Deutsche Bank was hired to undertake this analysis and report back on their findings.

Deutsche Bank confirmed the transaction represents fair value to the Crown, taking into account the financial terms of the leases. The firm also found the marketing process had been robust and thorough, and endorsed the top bidder selected by PWGSC.

This transaction will be seamless to Canadians and will not affect government services or programs offered in the buildings. Services such as passports, taxes, employment insurance and pension services will continue to be offered from these locations with the same level of efficiency.

Click on the links below for more information on the Real Estate Initiative.