Ontario Government to acquire interest in Toronto innovation hub
Infrastructure Ontario has entered into a conditional agreement to acquire an interest in the MaRS Phase 2 Building in Toronto. The provincial government will acquire a majority stake in the 780,000-square-foot office property from Alexandria Real Estate Equities, while the MaRS organization owns a minority interest in the property.
This is the first step in the process, and the details and conditions of the agreement will take several months to finalize, pending substantial due diligence.
The MaRS building is located at the heart of Toronto’s Discovery District. Major tenants include the Ontario Institute for Cancer Research, Mars, and Public Health Public.
The 20-story Phase 2 tower offers state-of-the-art laboratory and office space, advanced communications and information technology capabilities, access to a large multi-function conference/collaboration center and networking opportunities with other MaRS tenants and partners across Canada and around the world.
In early 2014, the completion of the 780,000-square-foot MaRS Centre Phase 2 facility increased the size of the MaRS innovation footprint to 1.5 million square feet, making it one of the largest global urban innovation hubs.
Infrastructure Ontario's due diligence, including a third-party appraisal from Ernst & Young, confirms that the government's investment of C$308.81 million ($278.12 million) is less than the fair market value.
In 2011, Infrastructure Ontario provided a C$224 million ($201.74 million) loan to MaRS Phase 2 for the construction of a medical lab building at the southeast corner of University Avenue and College Street in Toronto.
With the purchase, Ontario will have invested C$308.81 million, which includes the C$224 million loan for Phase 2 and a debt-service payment that has cost to date C$3.61 million ($3.25 million); C$16.2 million ($14.59 million) that MaRS used to initially purchase the land; and a C$65 million ($58.5 million) interest that the developer had in the property.