A creative approach to maximizing value

February 14, 2023   Business, News, Sold Listings
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The J.L. Richards & Associates Limited story

When you’ve been in the same location for more than 60 years, a natural question when it comes time to sell is, “What have we got and where do we start?”

That’s the situation J.L. Richards & Associates Limited (JLR) faced recently. The well-established engineering, architecture and planning firm had been at the same location since 1960, a prime piece of land next to the Queensway and across the highway from the iconic gold MNP building (formerly the Corel building) and Dymon Storage. Over the years, the company had outgrown its building, spawning two satellite offices and serious discussion about building a new facility on the parking lot adjacent to the existing building.

Then the pandemic hit and new possibilities emerged.

“COVID brought along the opportunity to re-evaluate,” says JLR vice-president René Lambert, particularly since it freed up office space in the city as workers abandoned the office to work from home. “We had more options than we did pre-COVID in terms of what we wanted to do to meet our growing needs for our staff.”

René Lambert, VP, J.L. Richards & Associates Limited

No longer was building on their own property the best option. That meant it was time to go look for new office space to rent and sell the valuable asset that was their Ottawa home.

The challenge in selling for René and his team was understanding the process. “Our biggest need was probably just assurance of the process. Because of our location, we knew that it would eventually sell, but the question was: How’s it all going to come together? And we have a proactive board that really wanted to know how this was going to work.”

That’s where Koble, and partners Marc Morin and Graeme Webster, excelled. “They laid out a game plan in the beginning, which we bought into and thought, ‘OK, we understand why,’” René says, adding with a chuckle, “Marc was patient because he had to explain it to us a few times.”

The other challenge was figuring out exactly what JLR had on its hands and what the site could best be used for — despite a myriad of obstacles. It wasn’t zoned for the use with the highest return — high-rise residential. Therefore, in a normal market, the highest value for the site would be for office buildings, but that segment collapsed during the pandemic. An industrial use would be another option, but city services running through the middle of the property, as well as zoning restrictions, made that difficult.

“We were just limited, every time we turned around,” says Marc. “As monumental as this site was, it was a real puzzle to figure out how to position it.”

The Koble team created a process with René and JLR to overcome those challenges, taking a property that appeared to have limitations affecting its value and spending the time to thoroughly assess what its true options could be, defining a better purpose than, say, office buildings (for which there was no market) or industrial (for which development was restricted).

“The goal was to maximize the return for our client without artificially inflating the value for the buyer,” Marc says. “We needed to find this property’s ideal use and therefore ideal value.”

Marc Morin, Koble Partner & Co-Founder, Broker of Record

It took about six months and began with a detailed assessment of the property, bringing in third-party consultants and carefully determining the best use of the site to maximize the return for the client by focusing on the most suitable prospective buyers — companies that could utilize the property for their own operating business.

Then, rather than taking the property to market, Koble quietly reached out to selected people to gauge interest and validate both the value and the strategy. The approach emphasized one-on-one conversations with investors, treating both sides with tremendous respect, something Koble feels strongly about.

“Because this is such a unique property, we felt that if we exposed it to an open market and we didn’t find the right buyer immediately, then a property like this could sit on the market and get stigmatized,” Marc says. “We’ve seen that scenario play out many times and much more regularly since the beginning of the pandemic.”

René admits that his team was “a little surprised" at how much success the Koble team had in terms of actually drumming up interest by just calling people in their network. That was an interesting experience.

Internally, the Koble team spent weeks analyzing the market, recent sales and connecting with the most active investors, consultants, developers and other brokerages to develop a list of prospective parties that would see the incredible value that this site had to offer. As a leader in the development and construction industry themselves, the JLR team also leveraged their network of clients and colleagues and worked with Koble to refine that list.

In the end, multiple parties pursued the opportunity. Koble concluded a deal with an excellent buyer who is very active and growing in Ottawa and across the country, with a successful operating business, and who are planning an exciting new development on site. 

JLR achieved an incredible value, a short due diligence period and quick closing, which greatly enhanced their certainty, and were able to remain on site at very little cost until they completed their transition to their new location on Preston Street.

“We’d be lying if we said that’s how we thought it was going to end up. We thought we’d go to market like you normally would. Koble’s strategy actually made the process easier. It worked out really well.”

— René Lambert, VP, J.L. Richards & Associates Limited

He also points out that Marc did a good job of managing expectations and making the process a smooth one. “The end result was great, but I think it was as stress-free as it could be as well, it’s not just the end result.”

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