Alta Canada has acquired the Air Transat Tower office and retail complex in the Greater Montreal borough of Saint-Laurent. The Montreal-based commercial real estate owner and operator has plans for an extensive revitalization of the 50-year-old, 26-storey tower.

The tower, located near the base of Mont-Royal at 300 Léo-Pariseau in the Place du Parc business complex, offers an attractive location at the gateway to downtown Montreal. However, like many older class-B and -C office properties around Greater Montreal, it has undergone an extensive period of elevated vacancy.

Alta Canada paid $48 million for the tower, the retail and shopping centre along Parc Avenue and an extensive underground parking facility.

The tower comprises 567,000 square feet of leasable space, mostly dedicated to office but with retail on the lower floors.

"Alta Canada is pleased to announce the acquisition of the Air Transat Tower, a landmark milestone in our mission to invest in and transform Canada's most iconic properties,” said Alta’s Richard Geller in an email to RENX about the acquisition.

“More than a real estate transaction, this purchase reflects our commitment to revitalizing one of the city's most recognizable office towers for generations to come. Nestled at the gates of downtown Montreal, the Transat tower spans over 800,000 square feet encompassing a shopping mall and a parking facility with over 1,000 indoor stalls.”

Plans for the Air Transat Tower

Geller has not outlined specific plans for the property, but he did tell RENX the common areas will be upgraded and it is considering ways to turn the rooftop into an amenity — he said it boasts some of the best views in the city.

“The property now enters an exciting chapter under new stewardship," he said in the email.

Air Transat has long been the anchor tenant for the tower. Another key tenant is Nestle/Nespresso Canada. Retails tenants include a Metro grocery store and cinema.

One key factor in the acquisition is parking, the complex offers stalls for 1,100 vehicles in an area where parking is at a premium.

This is the second significant acquisition for Alta Canada in the past year. It also acquired the former Hospital Misericorde site at 840-890 Rene-Levesque last summer, and is planning a major renovation and redevelopment for that site.

Prior to the Air Transat Tower acquisition, Alta owned and operated a portfolio of over a million square feet of assets, concentrated largely in the Greater Montreal area. The company rebranded as Alta over a year ago, after being known originally as Staerk Group. 

Montreal's improving office market

Value-add office buyers in Greater Montreal are betting on a continued reduction in vacancy rates, which have been declining for five straight quarters, according to an Avison Young report released today. While there is a wide variation between prime downtown properties and other assets, the city’s overall availability stood at 18.4 per cent after 252,000 square feet of absorption in Q1.

“The Greater Montreal office market has moved past its inflection point,” the report states. “After several years of downward pressure, fundamentals are improving steadily, supported by five consecutive quarters of positive absorption and a near absence of new supply….”

While trophy properties ended the quarter at 6.9 per cent availability, class-A was at 17 per cent and class-B at 21.5 per cent. Both trophy and class-A availability was down, but class-B was at its highest in over a year as the flight to quality continues. As that space fills, and with very little new space to be delivered, owners who reposition or improve class-B properties could begin to see uptake.

“The contraction is most pronounced in trophy and class-A assets, where high-quality, move-in-ready sublease options are disappearing. Large contiguous blocks, particularly those exceeding 50,000 sf, are becoming increasingly scarce, shortening marketing timelines and shifting negotiating dynamics after an extended period that favoured tenants. 

“At the same time, structural reductions in inventory — driven by the conversion or demolition of more than one million square feet of obsolete office space since 2023 — are reducing latent vacancy, especially downtown and midtown.”  

The AY report notes 10 class-B buildings contain roughly 22.5 per cent of the total space on the market (which totals about 10.5 million square feet).

The sale also comes at a time of heightened investment activity in the market. During Q1, there were five significant office property trades in Greater Montreal, led by Dekabank’s purchase of 1115 Des Canadiens De Montreal Ave., for $279 million from Cadillac Fairview.