YVR buys Sea Island cargo facilities
The Vancouver International Airport Authority is purchasing the interests in 11 properties and 700,000 square feet of gross leasable land on Sea Island at a cost of $39.5 million from Huntingdon Capital Corp.
In a deal announced Tuesday, Huntingdon said in a press release it has “entered into a binding agreement to sell its interests in the Vancouver Air Cargo Portfolio to the Vancouver International Airport Authority.”
The properties are subject to ground leases that expire between 2016 and 2029, with an average remaining lease of 8.2 years.
Tony Gugliotta, senior vice president of business development for the Vancouver International Airport Authority, said the land belongs to the federal government, which issued leases on Sea Island properties to tenants.
As those leases expire, the land reverts back to the federal government, and since the airport authority has the overall lease for Sea Island property, that land comes back under its responsibility, Gugliotta explained.
In the case of the Huntingdon facilities’ 110 tenants—involved in the cargo industry—the airport felt it could benefit from getting those buildings back under its control before the lease expired.
Gugliotta said the airport felt there was “strategic value for us to have a more direct relationship with those tenants.”
“We want to work with those businesses to help them grow their business. We want Vancouver to be a cargo gateway, consistent with our aspirations on the passenger side.”
Huntingdon is a publicy-traded real estate operating company that’s listed on the TSX, and owns and manages a portfolio of 35 industrial, office, retail and aviation-related properties throughout Canada.
The airport’s purchase of the cargo lands was announced as part of a bigger deal. Slate Properties Inc. will be purchasing all of the issued and outstanding common shares of Huntingdon by way of a “plan of arrangement under the Business Corporations Act (British Columbia).”
The board of directors of both Huntingdon and Slate have unanimously approved the transaction, according to the press release issued Tuesday.
Slate is a Toronto-based commercial real estate investor and asset manager, with $2.5 billion in commercial real estate assets across North America.
The purchase values Huntingdon at about $210 million, based on the consideration being paid, the press release said.
Gugliotta said the airport authority also purchased the interests in property previously leased by Calloway Real Estate Investment, the site which the McDonalds on Russ Baker Way near the Dinsmore Bridge. That property had only five or six years left in its lease, Gugliotta said, and the airport wanted to “give tenants some certainty.” He did not disclose the purchase price of that deal.
Gugliotta said no other lease purchases are in the works on Sea Island.