Bullish on the industrial markets in Ottawa and the U.S., Montreal-based developer Rosefellow will open offices in the national capital and Miami.

“We see an incredible runway in Ottawa,” says Rosefellow co-CEO Mike Jager. “It’s important to be present in the community to be able to get the best opportunities out there.”

Jager says having an Ottawa office will give Rosefellow the opportunity to build stronger relationships with Ottawa’s brokerage community and landowners.

The developer also plans to develop industrial projects across the U.S., using Miami as a base. Both offices will open in January.

While Ottawa has always been associated with government employment, it has established technology sectors, an extremely well-educated workforce, advanced manufacturing in aerospace, cybersecurity and defence, and proximity to Montreal and Toronto, he says.

“We don’t invest in Ottawa because of what was yesterday. We’re investing because of what we believe it can be tomorrow.”

Real estate and economic competitiveness

Jager says industrial real estate is becoming increasingly important for economic competitiveness. “We’re always approaching development with a long-term perspective. We’re not trying to predict what the leasing market will look like next quarter. We’re trying to understand what businesses will need over the next 10, 20, 30 years.”

There are many opportunities for the asset class to grow given the growth in military defence spending, and with companies onshoring and automating, he says.

Jager says Canada’s increased commitment to defence spending represents one of the most important economic opportunities for Ottawa in decades. He notes some major defence-related contracts have already been awarded to Ottawa-area companies.

“Every time, people hear about billions of dollars in defence, they think of military equipment, aircraft, ships. I think about the businesses behind those contracts, the ecosystem that we’re creating around it.”

These include manufacturers producing specialized components, tech firms developing advanced systems, and suppliers that support these businesses. “That’s exactly where Rosefellow comes into the picture,” he says.
 
Rosefellow’s Ottawa office will be in Kanata, close to the company’s industrial development at 405 Huntmar Dr. and 115 Journeyman St. in Stittsville.

Built on spec, the development comprises a 248,498-square-foot distribution centre on Journeyman that was leased to car parts retailer AutoShack and a 230,247-square-foot building on Huntmar. Rosefellow has five letters of intent for the latter site “which is insane,” and expects the building to be fully leased by the end of the year.

Once the Kanata site is fully leased, Rosefellow’s focus will shift to its Barrhaven site at 575 Dealership Drive and two other sites it has under contract.

The Barrhaven site could be home to two industrial buildings with a total of 300,000 square feet, built on spec. Rosefellow has also had offers to sell the site.

“Not that we want to sell land but if the opportunity is so great, we’ll sell it and look for other sites which we do have under contract. We’re just analyzing to see if it’s worth selling or we develop it ourselves.”

Miami office to serve U.S. clients

Rosefellow is establishing a U.S. base because many of its Canadian clients have asked whether it develops in the U.S. Clients are looking for secondary manufacturing or distribution facilities in the U.S. to service American clients while they continue to supply Canada through their Canadian facilities, he says.

Miami was selected as Rosefellow’s U.S. headquarters for selfish reasons: “I like palm trees and sun and heat.”

In addition, Jager’s daughter is in medical school at the University of Miami.

Launching fourth Rosefellow fund

Rosefellow is also set to launch its fourth Rosefellow fund. For the first time, the fund will go outside the developer’s traditional markets of Quebec and Ontario to raise money for industrial projects across Canada, from Halifax to B.C.

It hopes to raise $125 million, which Jager says will give Rosefellow the ability to invest about $500 million in industrial projects.

Rosefellow has also partnered with the Tsatas Group and Sid Lee Architecture on a proposed 28- to 38-storey downtown Montreal office tower that would be located at 1225-1249 Metcalfe St., near the Sun Life Building.

Jager says the group initially planned to build a five-star hotel at the site, thinking that downtown office vacancies are too high to support additional space. But after having a couple of lunches with prominent downtown office brokers, he was surprised to learn there is a shortage of options for 50,000 square feet or more of contiguous space in downtown class-A buildings.

The group says several floors of the building could house offices of the NATO-backed Defence, Security and Resilience Bank if Montreal is selected as its headquarters.

Montreal is among the cities vying to become the Canadian home of the new multilateral financial institution that is aimed at mobilizing public and private capital for defence, security and resilience initiatives.

“It would be incredible if Montreal was selected,” Jager says. “For the longest time, companies would go to Toronto and overlook Montreal. It would be nice for once to see that flip, and it would come to Montreal instead. We’ll keep our fingers crossed.”

The group behind the proposed tower has received six proposals for more than 75,000 square feet of office space, indicating there is “positive traction for people who are looking for brand new space.”

Even if Montreal is not chosen for the NATO bank, “if we do have an appetite from anyone of these multinational companies who want class-A office space downtown, we’ll move forward with the project.”