151 Front Street 
, Canada’s most prominent telecommunications hub, has been acquired by Allied Properties for $192 million (about $178 million U.S.), the company said this week 
. Allied, a Toronto-based real estate investment trust, said it expects to see strong demand for space at the carrier hotel and data center hub, which houses more than 150 telecom providers. The deal is expected to close in October.
“The property fits within our investment and operating focus, much like our property at 905 King Street West in Toronto and portions of Cité Multimédia in Montreal, which also provide specialized facilities for telecommunications, networking and computer equipment,” said Michael Emory, President and CEO. “Because of expected increases in demand for space in the property, we believe we can augment the net operating income over time.”
Last Sold in 2004
151 Front Street last changed hands in Jan. 2004 
, when an investment group led by Northam Realty Advisors purchased the building from Trizec Properties for $59 million ($76.3 million Canadian at the time). The building has 320,000 square feet of leasable space, and is 92 percent leased.
151 Front Street was built in 1954 to house telegraph equipment and operated as a mixed-use facility until it was bought by Trizec in 1997 and redeveloped for modern telecom use. A number of data center tenants at 151 Front Street experienced downtime 
in July due to a fire in an eighth-floor electrical room.
Land Included in Deal
Allied said acquiring 151 Front Street will “meaningfully reduce Allied’s exposure to its current top-10 tenants and will improve the overall credit quality of its
tenant-base.” The property includes surplus land on which 750,000 square feet can be developed for office and retail use. Allied said it doesn’t intend to develop this land in the near-term, but believes that it boosts the value of its portfolio.
The sale price of $192 million represents a 10% capitalization rate applied to the in-place annual net operating income from the property, Allied said. The REIT will finance a portion of the purchase price through a $96 million mortgage, and also plans to issue $125 million in stock in an offering in October.
Allied Properties REIT is the leading provider of Class I office space in Canada, with properties in Toronto, Montreal, Winnipeg, Quebec City and Kitchener-Waterloo.
Article printed from Data Center Knowledge: http://www.datacenterknowledge.com
URL to article: http://www.datacenterknowledge.com/archives/2009/09/18/toronto-data-hub-151-front-st-is-sold/
URLs in this post:
 151 Front Street: http://www.151frontstreet.com/
 said this week: http://www.alliedpropertiesreit.com/documents/APREIT_2009_09_14_Press_Release_Acquisition.pdf
 Jan. 2004: http://www.carrierhotels.com/news/2004/Jan/16/151_front_street_sold.shtml
 experienced downtime: http://www.datacenterknowledge.com/archives/2009/07/06/fire-causes-outage-at-toronto-carrier-hotel/
 Rich Miller: http://www.datacenterknowledge.com/archives/author/richm/
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