Posted on Monday, April 11th, 2016
Office Lease of the Year Award Transaction Description and Summary The SNC-Lavalin Nuclear Campus lease transaction in The Sheridan Park in Mississauga, Ontario reimagined aging suburban office buildings, reengaged an existing tenant who believed the only viable option was relocating, and revitalized a community. A tenant team of SNC-Lavalin Nuclear (“SNC”), Arcturus Realty, and SNC Lavalin Operations & Maintenance and a landlord team of Slate Office REIT, JLL, Arguson Projects, and the City Mississauga came together to execute the consolidation of SNC’s dispersed five locations into a state-of-the-art two-building campus site. The building’s owners, Slate Office REIT (“Slate”), committed to investing more than $46 million dollars to accommodate SNC’s 1,200 employees in an approximately 216,000 square foot campus that reflects and helps to fulfill the global company’s goals and ambitions. In February 2015, SNC undertook a full search process, including many leading developments and buildings in the Greater Toronto Area (“GTA”). Focused on the west GTA locales, SNC was looking to consolidate their 420,000 square feet spread across five buildings in Mississauga and Oakville into a single 215,000 square foot location or campus. 2285 Speakman Drive in The Sheridan Park housed SNC’s headquarters adjacent to their research centre. While this existing location now owned by Slate received the RFP, it seemed to start from a disadvantageous position. The building was recognized as a dated, inefficient facility that was out-of-step aesthetically and environmentally with the image and brand SNC wished to project. A growing list of operational and maintenance complaints had also developed over recent years as the building aged. With this, Slate set out to compete against some of the market’s newest developments. A lot was at stake as they sought to retain the largest tenant within a portfolio they had acquired a mere thirteen months previously.
The landlord team proceeded with a solid foundation of understanding prior to composing a response to the RFP; reviewing and analyzing the market, competitive alternatives, and qualitative and quantitative elements of competitors. The team thoroughly examined and categorized legacy service request records detailing SNC’s complaints and concerns with the existing building. The team also evaluated SNC’s industry sector, including competitive pressure and successful operating environments. Armed with this research, Slate prepared a solution that paralleled the new vision of SNC – forward thinking, people focused, proud, interesting, and innovative.
While Slate was prepared to commit to a major investment to redevelop 2285 Speakman Drive, that alone would not meet the space requirements outlined in the RFP. In a bold move, Slate purchased a vacant building, 2251 Speakman Drive, which is adjacent to 2285 Speakman Drive and SNC’s research facility and incorporated this new acquisition into a proposed state-of-theart campus for SNC. The SNC Campus is a complex construction project: two buildings will be re-developed under very tight timelines and very tight scrutiny. Because SNC is a company that values transparency and strong oversight, the Slate proposal was delivered with an openness designed to anticipate and answer, completely, the questions that might originate in echelons well beyond real estate and procurement – not only financial questions, but also operational, logistical, physical and aesthetic. Slate’s approach to the RFP was to respond directly to historical/legacy challenges and outline how the building systems, envelope and architectural facades will be completely reimagined to meet the vision and every one of the objectives set out in the RFP.
Speakman Drive is the heart of The Sheridan Park in Mississauga and SNC has always been the epitome of world-class technical companies found in this innovation cluster community. The departure of SNC would leave a hole in a vital commercial corridor in the Mississauga Sheridan park area. Slate proposed a vision of the future not only for the buildings into which SNC would fit but also the future of Sheridan Park. Working in concert with the new Mississauga administration, Slate incorporated the SNC project into the broader vision of Sheridan’s 340 acre park. Consequently, Slate has become a key mover in the revitalization of Sheridan Park – one of the most significant contributors to scientific innovation in Canada.
Recognizing that SNC relocating, potentially outside of Mississauga, would result in the loss of approximately 1,200 local jobs, deliver more than 350,000 square feet of late 1960’s era office space to a node of 1.7 million square feet (more than 20%) that was already struggling, and deal a substantial blow to the new administration’s stated goal to revitalize Sheridan Park, the City of Mississauga impanelled a strategic response team of department heads and committed to work with Slate to expedite permits and approvals, ensuring tight building timelines are met.
Slate’s proposal was accepted by SNC as it combines a compelling financial proposal with innovative and contemporary building systems, design, and technologies. Slate will deliver a campus that is superbly landscaped, architecturally attractive and environmentally conscious. The proposed Campus design will inspire SNC’s current and future workers, encourage collaboration and innovation, and impress customers. The SNC Campus buildings at both 2251 and 2285 Speakman Drive will incorporate leading engineering and design best practices to deliver optimum energy and environmental efficiency. SNC will occupy buildings that incorporate a solid, tested framework with a newer, greener structure achieving the enhanced value of an adaptive re-use approach. Rather than demolishing and rebuilding, Slate achieves a superior product with an existing core, saving the cost of development charges, the steel and concrete, time and manpower, and also garnering savings associated with the reuse of salvageable elements such as transformers, chillers, boilers and back-up generators. All savings Slate is able to pass on to SNC. SNC retains an existing, well-established address, giving employees a familiar, accessible location and a cost-effective location solution that meets and exceeds its objectives for 1) sound economics, 2) increased employee engagement and retention, 3) enhanced community, culture, morale, and convenience, 4) maximized functionality and flexibility, and 5) improved brand, image and identity. Mississauga maintains a great corporate citizen and gains a strong investment in the bright, revitalized future envisioned for The Sheridan Park.
The Slate and SNC teams negotiated a creative and innovative lease transaction which benefitted both tenant and landlord alike and kick-started a revitalization movement in The Sheridan Park in Mississauga which will reignite a successful community dedicated to supporting research activities for the good of Canada and the world.