Scotiabank Sells Scotia Plaza to Dundee REIT and H&R REIT

The Bank of Nova Scotia and Scotia Realty Limited (collectively, “Scotiabank”) completed the sale of the Scotia Plaza complex in Toronto, including the main tower at 40 King Street West and the historic bank building at 44 King Street West, to Dundee Real Estate Investment Trust (“Dundee”) and H&R Real Estate Investment Trust (“H&R”) for a purchase price of $1.266 billion, a record price for a single Canadian office project. Concurrent with the transaction, Scotiabank entered into new lease arrangements with the purchasers which will see Scotiabank continue as the anchor tenant in the Scotia Plaza complex.

The purchase was financed by the sale of $650 million aggregate principal amount 7-year first mortgage bonds that bear interest at 3.21 per cent per annum. The bonds are secured by a first-ranking charge on the Scotia Plaza complex. DBRS Limited assigned the bonds an A (high) rating with a stable trend.

The bond sale was underwritten by Scotia Capital Inc. and TD Securities Inc.

The purchasers were represented by Osler, Hoskin & Harcourt LLP by a team led by George Valentini and which included Steve Luff, Adrian Hartog, Stella Di Cresce, Ryan Nielsen, Tim Watson and Brian Rakowski (real estate); Shuli Rodal (competition law); Allan Wells (employment); Tracy Sandler and Patrick Riesterer (financial services); Shelley Obal and Timothy Mitchell (legal opinions) and Kelly Moffatt (intellectual property). Dundee also received tax advice from David Glicksman and Manjit Singh of Wilson & Partners LLP, a law firm affiliated with PricewaterhouseCoopers LLP, which represented Dundee with respect to tax matters. Dundee was led by in-house counsel, Mark Hogan. H&R was represented by in-house counsel, Robyn Kestenberg.

Scotiabank was led by in-house counsel Zev Rosenblum and represented by Goodmans LLP by a team led by Stephen Belgue and which included Jeffrey Shore and Jordie Saperia (real estate); Glenn Ernst and David Veneziano (tax); Richard Annan (competition law); Joe Conforti (employment) and Amalia Berg Trister (intellectual property). Ronald Goldenberg, Sheldon Disenhouse and Julie Robbins of Fraser Milner Casgrain LLP represented Scotiabank in connection with the new lease arrangements.

In connection with the joint venture arrangements between the purchasers, Dundee was represented by Paul Morasutti and George Valentini of Osler, Hoskin & Harcourt LLP and H&R was represented by Juli Morrow and Andrew Wiseman of Goodmans LLP.