The head of the Avison Young team co-ordinating the sale of a former Sears 1.6-million-square-foot distribution centre in the Greater Montreal Area hopes the deal will be a market trendsetter.

Avison Young is representing a seller consortium, which includes Montoni and Lotus Capital, in the sale of the property in the heart of St-Laurent, Que., the region’s dominant industrial real estate submarket .

“We feel a transaction of this scale and significance in this location will, hopefully, lead to a key indication of where pricing is for industrial in Montreal,”‘ said Mark Sinnett, an Avison Young principal and head of the firm’s Quebec capital markets group, in an interview with Quebec.

The region’s industrial real estate market has been dealing with “a real slowdown” in sales activity during the past 18 months due to a return to normalcy following the COVID-19 pandemic, “a new tariff reality” and, now oil-price volatility stemming from the war in the Middle East.

“And, that’s led to sensitive investors pausing a little bit on the industrial transactions, or interest in acquiring industrial facilities, here in Montreal,” said Sinnett. “A lot of the transactions to date have been mostly user transactions in the industrial sector.”

Known as VSL Logistics Hub, the property spans about 2 msf altogether and, according to Sinnett, ranks among the three largest industrial properties in the GMA. The site is located within 15 minutes of downtown Montreal; Laval, Que.; and the West Island.

The former Sears Eastern Canadian large-bay distribution centre played a foundational role in establishing Saint-Laurent as a key industrial node within the GMA, according to Avison Young. St-Laurent serves as what Sinnett has called a “critical gateway” to Eastern Canadian and cross-border North American logistics operations.

“It’s a building that used to be kind of the HQ and distribution centre for Eastern Canada for Sears, so it was built and modified and expanded over almost 40 years for Sears’ use,” said Sinnett. “And, with the demise of Sears in Canada, the property became available for the first time and it was at that point that the property was subdivided and leased out to, effectively, four different tenants.

“I think our understanding of some of the tenants and what their businesses are and what they’ve needed for this building in space really differentiated us to the ownership group to be able to articulate that story,” he added, explaining how Avison Young earned the marketing assignment.

VSL Logistics Hub is about 97% leased and anchored by Lufa Farms, a leading online grocery fulfillment-services company. The property is unique because it contains an approximately 200,000-sf rooftop greenhouse, said Sinnett. Lufa grows its own vegetables in the greenhouse for distribution. The fulfillment company also deploys its leased space to assemble the veggies, locally sourced bread, cheeses, milk, cereal, eggs and other items in 35,000 grocery baskets delivered weekly to residents across the region.

The facility supports a range of logistics functions, including order fulfilment and packaging, cold storage and last-mile delivery as well as the rooftop greenhouse production. Features include 14-to-42-foot clear heights, five access points and eight drive-in doors.

“When you think of the last-mile logistics capability of this location in this building, it’s perfectly suited for that type of industry, online grocery,” said Sinnett.

Other tenants include Mitchell Lincoln, Brighton-Best International, and WESCO Distribution.

Avison Young will sell the property through an auction process involving qualified bidders, said Sinnett.

“We anticipate a five-week marketing process, at which point there will be a call for offers in about six weeks’ time.” he added. “Right now, we are just at the beginning of the marketing phase, introducing the asset which we’ve just taken to market.”

Yann Charles, an Avison Young executive vice-president, and Victor Harraca, an associate with the company, are marketing the property with Sinnett.

Pictured: The VSL Logistics Hub in St-Laurent, Que.

Photo: Courtesy of Avison Young