CIBC Sells Office Buildings for $860 Million

In mid-December 1999, Canadian Imperial Bank of Commerce (CIBC) announced the sale of its seven flagship office buildings to British Columbia Investment Management Corporation (BCIMC), the pension fund investment arm for the British Columbia government. The BC Fund outbid a number of other keenly interested prospective buyers in the sale process.

The total package represents 3.9 million square feet of leasable space in the seven office buildings, which includes Commerce Court in Toronto, La Tour CIBC in Montreal, Commerce Place in Vancouver, Commerce Place in Edmonton and Commerce Place in Hamilton. The purchase price on the transaction has been confirmed at $860 million, making the CIBC deal the largest commercial property sale in Canadian history.

Under the terms of the sale, which is scheduled to close in April of this year, CIBC will lease back from BCIMC the majority of the space it presently occupies in the seven buildings. The sale of the seven properties will result in a pre-tax gain of approximately $329 million. Of this amount, approximately $180 million will be recognised in the second quarter. The remaining gain relates to that portion of the premises which will continue to be occupied by BIBC and will be deferred and amortized over the approximately 10-year average term of the related leases.

CIBC announced that GWL Realty Advisors Inc., Canada’s largest real estate advisor with approximately $4 billion worth of assets under management, will manage the properties after the sale.

Blake, Cassels & Graydon LLP are lead Counsel to CIBC. The Blakes team includes James S. Hilton, Chris A. Huband, Thomas von Hahn, Silvana M. D’Alimonte, B. David O’Brien, Deborah H. Rowat (Toronto), Jeffrey Merrick (Vancouver), and Richard L. Dawson (Calgary). Also assisting as part of CIBC’s legal team are Michael L. Richards and Peter R. O’Brien of Stikeman Elliott’s Montreal office, Ronald A. Goldenberg of Fraser Milner in Toronto with respect to certain lease issues and Allan Leibel of Goodman, Phillips & Vineberg in Toronto with respect to certain zoning matters.

Ray E. Lawson, Robert S. Carswell and Stephen Lloyd of Byers Casgrain in Montreal are acting as lead counsel for the purchaser. They have also assembled a multi-jurisdictional team, which includes W. David McCordic and David N. Ross from McMillan Binch, Tim D. Kerrigan of Bennett Jones with respect to Alberta matters, and John H. Fraser of Lawson Lundell Lawson & McIntosh with respect to BC matters.