Retrofit Financing Helps Innovative Developer Convert Halifax Office Tower
- Keywords:
- sustainable real estate
The Centennial Building is one of Halifax, Nova Scotia's, first high-rise buildings. It’s no surprise that a structure completed in 1967 was using energy inefficiently, leading to high utility costs and a large carbon footprint. But the visionary leaders at Sidewalk Real Estate Development saw an opportunity to convert the Centennial into something new.
The company focuses on amenity-rich locations in urban neighborhoods with a focus on sustainability. In keeping with that ethos, Sidewalk purchased the Centennial in 2021 with the intention of converting it into loft-style rental apartments while reducing the building’s carbon footprint through energy efficiency retrofits BMO provided an impact loan to Sidewalk, the first of its kind through our partnership with the Canada Infrastructure Bank.
“In this high interest rate environment, what really propelled us forward was the substantial interest rate savings that we saw under the retrofit program,” said Joe Nickerson, Sidewalk’s vice president. “We are going to end up with product that we could never create in the new construction environment.”
Read more
Joe Nickerson:
My name's Joe Nickerson. I'm a partner at Sidewalk Red. We're an innovative real estate company based in Dartmouth, Nova Scotia focused on reshaping neighborhoods.
Mike Beg:
What sets Sidewalk apart is that they focus on amenity-rich locations in urban neighborhoods, sustainability, and industry-leading design.
Joe Nickerson:
The Centennial Building is a building located in downtown Halifax, really centrally located close to the water, long history, one of Halifax's first high-rise buildings, really unique architectural features that have not been celebrated over time.
When we bought the building, it looked and felt the part of a 1970s building down to the core systems.
And we saw an opportunity to take a largely vacant office building and convert it into something new in the form of new loft-style housing and really give it a new, useful life over the next 60 years.
James Burrow:
Before the team at Sidewalk started to do this retrofit, the building was using energy incredibly inefficiently. That translated over to its carbon footprint and also its utility costs, which were very high.
Joe Nickerson:
So part of the retrofit plan involved an extensive amount of pre-planning and modeling work at the onset to arrive at a place of increased efficiency and completely change the use of the building.
That may involve changing out heating and cooling systems, new insulation for the building, a variety of different things that allow us to arrive at this stage.
Mike Beg:
This past year, we provided an impact loan for sidewalk that allowed them to reduce carbon footprint on the Centennial Building and reduce their costs.
Centennial building project is a perfect candidate for renovation because it is an underperforming office asset, and it is sturdy concrete construction, and also small floor plates for easy residential conversion to efficient units, and it's in a great downtown urban neighborhood.
The loan was the first of its kind delivered through our unique partnership with Canada Infrastructure Bank.
James Burrow:
The impact loan that we did for the team at Sidewalk Red for the centennial building was different because it measured the greenhouse gas reduction impact of the loan.
CIB is involved in the loan process as the provider of the actual funds, whereas BMO does the actual underwriting or the lending. And bringing BMO and CIB together, public and private capital together in one partnership, allows our borrowers to do more faster in terms of their environmental impact.
The BMO partnership with CIB is really about getting our commercial real estate borrowers who want to reduce the greenhouse gases emitted by their buildings, the cheapest financing available
Joe Nickerson:
So in this high interest rate environment, What really helped us and propelled us forward through this project was the substantial interest rate savings that we saw under the Retrofit program
For us, it was really appealing because it incentivized us to make changes and improvements to the building that had a sustainable impact and that reduced carbon emissions across the project, and really incentivized us in the right way to make the right type of improvements to this conversion.
Joe Nickerson:
We are going to end up with product here that we could never create in the new construction environment It's a different material palette. It's different time that this was constructed and and this component or this this base of the existing building really allowed us to Differentiate our product from anything that we could do on new construction For us at sidewalk the effort was truly worth the return
James Burrow:
Our team are really proud of the work that Sidewalk have done to decarbonize this building. After the retrofit is complete, the building's emissions will be 67% lower than it would have been otherwise.
Sidewalk have been able to achieve three fantastic impacts through their Centennial Building project. Firstly, they're creating living space in the vibrant downtown neighborhood of Halifax, where there was only largely vacant office before. Secondly, they're retaining the embodied carbon emissions in the building, meaning that they don't have to tear down a new one and build another in its place. And finally, they're using the project as an opportunity to decarbonize the day-to-day operations of the building.
Mike Beg:
Retrofit financing has to be economic. But when it's a closer call economically, the bank and the builder have to both lean in.
This isn't just about financing an update to a building for maximum return. It's about doing our part for the planet.
Joe Nickerson:
At sidewalk we're committed to being a more sustainable organization and it's critical for us that we have a financing partner that shares in those beliefs
Mike Beg
Head, Real Estate Finance
Mike Beg as Head, Real Estate Finance, Canada is responsible for management of BMO’s Commercial Real Estate Finance group and its client relationships across …(..)
View Full Profile >The Centennial Building is one of Halifax, Nova Scotia's, first high-rise buildings. It’s no surprise that a structure completed in 1967 was using energy inefficiently, leading to high utility costs and a large carbon footprint. But the visionary leaders at Sidewalk Real Estate Development saw an opportunity to convert the Centennial into something new.
The company focuses on amenity-rich locations in urban neighborhoods with a focus on sustainability. In keeping with that ethos, Sidewalk purchased the Centennial in 2021 with the intention of converting it into loft-style rental apartments while reducing the building’s carbon footprint through energy efficiency retrofits BMO provided an impact loan to Sidewalk, the first of its kind through our partnership with the Canada Infrastructure Bank.
“In this high interest rate environment, what really propelled us forward was the substantial interest rate savings that we saw under the retrofit program,” said Joe Nickerson, Sidewalk’s vice president. “We are going to end up with product that we could never create in the new construction environment.”
What to Read Next.
Cdn. Existing Home Sales (May), Housing Starts (May) — Eye on Supply
Robert Kavcic | July 02, 2024 Commercial Real Estate, Economic Insights
The Bank of Canada finally cut interest rates, and the housing market response has been more listings, not sales—hands up if that was on your b…
Continue Reading>
Tell us three simple things to
customize your experience
