Translated from Gad Bitton met le pied dans le Vieux-Montréal by André Dubuc, La Presse, August 13, 2014
Having recently acquired the 507 Place d’Armes in Old Montreal, investors are on the lookout for the next opportunity.
In a rare media interview, the owner of the Holand Leasing automotive leasing and financing company, Gad Bitton, has explained his goals regarding his most recent acquisition: the 507 Place d’Armes, also known as the Aldred Building.
An historical Old Montreal building of Art Déco style, this 23-storey building – whose design was inspired by the New York Empire State Building – was built in the early 1930s. Mr. Bitton and his equal share partner – the family of Michael Serruya, president of CoolBrands International in Toronto – have purchased the property from Georges Marciano, founder of Guess Jeans, on June 30 for the amount of $23.5 million.
“I prefer to diversify my investments”, explains Gad Bitton, 51 years old, after spending his whole life in the automotive business. “I learned a lot about real estate over the years.” Indeed, he started by purchasing multiple properties near the De la Savane Metro station in 1995, close to the junction of highways 15 and 40, where Holand Leasing’s head office is located. The area has since undergone a complete transformation – for the better.
But according to Mr. Bitton, a meeting with Mr. Marciano where he shared his vision are what convinced him to invest in Old Montreal. “He’s an accomplished businessman within his field. He told me to go take a walk in Old Montreal with my family, on a Sunday morning. I had never done so in my whole life. I did it, and I’ll never forget the wonders I saw. I rode the horse-drawn carriages ten times in a row, then spent the whole day sitting at the Place d’Armes, watching and listening to passers-by.”
When Mr. Marciano informed him he was selling his real estate portfolio for personal reasons, Mr. Bitton was ready. He first bought the 11-15 Notre-Dame West, then the 200 of the same street, then 249 St-Jacques. In late June, he finally got his hands on the 507 Place d’Armes.
“I enjoy Old Montreal very much”, says Mr. Bitton. “If other opportunities surface, we’ll consider more acquisitions, whether for residential or commercial office tenants.”
A preference for shared office space
To maximize his portfolio’s crown jewel, Mr. Bitton expects to leverage the building’s proximity to the Court Hall to attract tenants. Inoccupancy level for the 240,000 sq. ft. tower is currently at 23%.
“With technology, law professionals no longer need sprawling offices”, he says. He believes the future of the 507 Place d’Armes will revolve around a business center for independent lawyer and notary firms. “Not everyone can afford to pay $50 or $60 per square foot Downtown”, he adds.
Gad Bitton’s son, Meir, will manage the building. Property management and rent were awarded to the Cogir company, directed by Mathieu Duguay.
A partner with deep pockets
Mr. Bitton is a partner of Serruya Private Equity (SPE) in the Aldred Building. SPE’s portfolio features over one million square feet in Greater Toronto. Among its properties, the family holding owns the King Edward Hotel. “We’re always interested in investing in exceptional buildings, such as this one”, says Michael Serruya, cofounder of the Yogen Früz banner, during an interview.
The Aldred Building is the family’s first investment in Montreal. “We may be mistaken, but we believe the Toronto market is overhyped, while Montreal still presents plenty of opportunities. We hope to build an extensive portfolio here over the next ten years.”
He further adds that, ideally, these investments would be done in partnership with Gad Bitton.