Key Takeaways
- • Desjardins' DGAM Canadian Private Real Estate Fund and Desjardins Group Pension Fund acquired an 80% stake in two industrial buildings at Avenue 31's National Capital Business Park in Ottawa for $77 million, with plans to acquire majority stakes in additional stabilized properties within the multi-phased development.
- • The two completed buildings total 293,547 square feet with 32-foot clearances, are fully occupied by major tenants including FedEx, Red Bull, and Pizza Pizza, and feature weighted average lease terms of seven years, providing stable long-term cash flow visibility.
- • The National Capital Business Park spans 88 acres on Crown land at the Highway 417 and Hunt Club Road interchange in Ottawa's east end, positioning it as a strategically located logistics and industrial hub.
- • Richard Dansereau, VP and head of real estate investments at Desjardins DGAM, identified Ottawa as a high-priority market for industrial acquisitions, citing Avenue 31 as the superior developer in the sector.
- • The partnership enables Avenue 31 to tap institutional capital, providing liquidity to the developer and its high-net-worth limited partners while allowing capital recycling into future development projects, according to Avenue 31 President and CEO Michel Pilon.
Summary
Desjardins has established a significant foothold in Ottawa's industrial real estate market through a strategic acquisition of an 80% stake in two industrial buildings at Avenue 31's National Capital Business Park. The transaction, valued at $77 million, represents a partnership between Desjardins' DGAM Canadian Private Real Estate Fund and the Desjardins Group Pension Fund, two substantial institutional capital pools seeking exposure to stabilized, income-producing industrial assets.
The acquired properties, completed in 2022, comprise 293,547 square feet of fully occupied industrial space with 32-foot clearances—specifications suited for logistics, distribution, and light manufacturing operations. The tenant roster includes institutional-grade operators: FedEx, Red Bull, Pizza Pizza, Canteen Canada, Carrousel Packaging, Golden Palace, Reliance Home Comfort, and Fastfrate Group. Critically, these tenants maintain weighted average lease terms of seven years, providing predictable rental revenue streams and reducing near-term vacancy risk. This lease duration and tenant quality align with the risk-return profile typically sought by pension funds and institutional real estate investors.
The National Capital Business Park itself is strategically positioned on 88 acres of Crown land at the Highway 417 and Hunt Club Road interchange in Ottawa's eastern corridor, a location offering direct highway access and proximity to the National Capital Region's logistics and commercial hubs. Richard Dansereau, VP and head of real estate investments at Desjardins DGAM, indicated in an interview that Ottawa ranked highly on the fund's acquisition target list and that Avenue 31 stands as the preferred development partner in the industrial sector.
The transaction's structure reflects a common institutional capital strategy in real estate: Desjardins has acquired an 80% controlling interest in the current buildings, with a contractual pathway to acquire majority stakes in additional buildings as they reach stabilization—meaning they achieve stabilized occupancy and lease-up metrics. This phased approach mitigates risk by linking future acquisitions to performance milestones. For Avenue 31, the partnership accomplishes a stated strategic objective: securing institutional capital to provide liquidity to the developer and its high-net-worth limited partners, enabling Avenue 31 to recycle capital into new development projects rather than maintaining a fully leveraged position in completed assets.
The acquired properties, completed in 2022, comprise 293,547 square feet of fully occupied industrial space with 32-foot clearances—specifications suited for logistics, distribution, and light manufacturing operations. The tenant roster includes institutional-grade operators: FedEx, Red Bull, Pizza Pizza, Canteen Canada, Carrousel Packaging, Golden Palace, Reliance Home Comfort, and Fastfrate Group. Critically, these tenants maintain weighted average lease terms of seven years, providing predictable rental revenue streams and reducing near-term vacancy risk. This lease duration and tenant quality align with the risk-return profile typically sought by pension funds and institutional real estate investors.
The National Capital Business Park itself is strategically positioned on 88 acres of Crown land at the Highway 417 and Hunt Club Road interchange in Ottawa's eastern corridor, a location offering direct highway access and proximity to the National Capital Region's logistics and commercial hubs. Richard Dansereau, VP and head of real estate investments at Desjardins DGAM, indicated in an interview that Ottawa ranked highly on the fund's acquisition target list and that Avenue 31 stands as the preferred development partner in the industrial sector.
The transaction's structure reflects a common institutional capital strategy in real estate: Desjardins has acquired an 80% controlling interest in the current buildings, with a contractual pathway to acquire majority stakes in additional buildings as they reach stabilization—meaning they achieve stabilized occupancy and lease-up metrics. This phased approach mitigates risk by linking future acquisitions to performance milestones. For Avenue 31, the partnership accomplishes a stated strategic objective: securing institutional capital to provide liquidity to the developer and its high-net-worth limited partners, enabling Avenue 31 to recycle capital into new development projects rather than maintaining a fully leveraged position in completed assets.
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