Avigilon Aims for Big Profit on Building Sale

By John Honovich, Published Nov 29, 2016, 12:00am EST (Info+)

Just 18 months after agreeing to buy a Vancouver HQ building, Avigilon is now planning to sell it off.

And they are looking to make a killing. Indeed, if their projections are true, they will make far more profits from selling the building than from their video surveillance business this year.

In this note, we look at the move, including feedback from Avigilon and how this move may strengthen Avigilon beyond the potential profits.

Building ******** 

** ***** ****, ******** ********* ****** *** ****** ** ******** ********* *** $** ******* CAD.

******** ** ********* ********** *** ********* the ******** **** ***** ** **** in ****** ****.

Sale / *********

***, ******** ** ******** ** **** the ********, **** * ********* ***** of ~$*** ******* ***. 

*******, ******** ***** ***** ** *** the ******** ** **** **** ** leasing ** **** **** *** ********* buyer.

Profits ********

** ******* ******, *** ******* ****** **** - **** ***%. *******, **** ***** to ****** ** ******** ** ********* the ********, ***** *** $*.* ******* USD *** *** ***** * ******** of **** *** *******, *********** ***** until *** ****** **** ****-**.

** ******** ***** ****** ** ~$** million ***, ******** **** *** *** targeted $*** ******* *** ******** *** factoring ** ******* ********* ***** *** transaction ***** ** *** ****.

** **********, ********'* *** ****** *** the ***** * ****** ** **** was **** **** $* *******, ** this ***** ** ***** * ****, though ******* ** *** *** **** nature *** *********** ****** ******* ***** expenses.

**** ********

****** *** *******, * **** *** would **** ******** * **** ******** which **** *** *** ** ****** debt (***** *** ***** ************* **** the **** *** *****) ** *** to ******** ** ***** ******** (*.*., acquisitions).

Bubble *********

********'* ****** ****** ** ***** **** is **** "*********'***** ****** ****** ** ** * period ** ************* ******." ** ** so ****, **** **** ** *******. ** ******** *** ** **** to *** *** ** ***.

Investor *** ****

******* ********* ******* ** ** ******* confidence **** *********. ** *******'* ************ **** *******, ********* *** ******** **** ****** unhappy **** ********, ******* ** *** falling ***** ***** *** ***** **** buying *** ********, ***** **** **** was ** ************* ***** *** ********* **** their **** ********.

Outlook ******** *** *******

** ******** *** **** * **** deal ***, **** ***** *** **** get * ***** ** **** / profits *** ******** ** ******* ********** with *********.

** ******, *** ****** ****** **** be ***** ******* *********** *******. ********* are ********* ~**% ****** **** *** the ******* ** **** *******, ***** is ***** **** ** *** ***** notably ****** **** ********'* ** ******* as **** ** *** ********'*. ******* the ******** ** **** ** ***, that **** ****** ******* ********'* ***** term ****** ****. 

Comments (13)

Avatar

Paul Curran

11/29/16 03:54pm

I guess money makes money:D

Agree: 1
Disagree
Informative
Unhelpful
Funny

Undisclosed Integrator #1

11/29/16 05:42pm

The subject heading had me worried for a bit.

Agree
Disagree
Informative
Unhelpful
Funny: 2

Undisclosed #2

IPVMU Certified | In reply to Undisclosed Integrator #1 | 11/30/16 02:07am

Not the graphic?

:)

Agree
Disagree
Informative
Unhelpful: 3
Funny: 1

Undisclosed #3

11/30/16 04:06am

Why would anyone pay them what they are asking for?

What kind of renovations could possibly more than double the value of the location?

Even if Vancouver is in a real estate bubble - that valuation is ridiculous.

Agree
Disagree: 2
Informative
Unhelpful
Funny

Undisclosed #2

IPVMU Certified | 11/30/16 04:59am

The more they get on the sale, the more they'll pay in rent ;)

Agree: 4
Disagree
Informative
Unhelpful: 1
Funny: 2

Undisclosed Manufacturer #4

12/01/16 03:06pm

AS I said little more than a week or 2 ago, Avigilon was not primed in achieving increased profits from their video surveillance sales and they had announced nothing earth shattering to increase revenue. They may increase sales but only by decreasing sales prices.

However:

Their CEO may have had a plan up his sleeve to achieve "profits" that he was talking about, and this may have been it all along. " Let's sell a building.

Impressive to investors? Yeah, right.

Agree
Disagree: 3
Informative
Unhelpful: 1
Funny

John Honovich

IPVM | 12/14/16 04:11pm

An article / marketing pitch posted for the building, key points:

It was stripped down to the concrete and then renovated with: 12- to 18-foot ceilings; energy-efficient windows and lighting; modern finishes; new electrical vault systems, HVAC chiller and roof-mounted diesel backup generator; a third elevator and an updating of the existing elevator cabs; a six-storey atrium featuring hanging stairways and overhead causeways; meeting rooms projected into the atrium with decks on top and LED lighting below; a bicycle service and storage room and facilities with lockers and showers.

Other exterior upgrades include: a living green wall on the east side of the building; new concrete finishes; continuous glass awnings on Seymour and Robson streets; and roof screening to improve exterior sightlines for Telus Garden residents. The half-acre site also has 55 parking stalls.

Agree
Disagree
Informative
Unhelpful: 1
Funny

Undisclosed #2

IPVMU Certified | In reply to John Honovich | 12/15/16 01:06am

Monday - Seller (Avigilon) closes deal with New Owner

Avigilon: Just look at this atrium, spectacular isn't it! It is actually a symbiotic continuation of the living green wall on the outside. You're just not going to find anything like this on the market, at any price!

New Owner: Yes, we're very impressed. Hmmm... Ok, you've made your point, we'll take it!

Tuesday: New Owner negotiates lease with New tenant (Avigilon)

New Owner: So in a stunning building like this, although the rent might seem high, there is nothing like it on the market. I mean just look at this 6-storey atrium and its symbiotic green wall.

Avigilon: I've seen bigger. And the green wall, it's actually Penicillium digitatumm commonly known as green mold coming from the HVAC, we could never get rid of it...

Anyway, its a colossal waste of space for a sales driven organization, like us. Ax the atrium, kill the mold, double the floor space, halve the rent, and then we'll talk.

Agree
Disagree
Informative
Unhelpful: 1
Funny: 1

John Honovich

IPVM | 05/08/17 03:20pm

Update: The building has been sold for $107.5 million CAD, over their projected $100 million mark. No details were provided on the term of the lease / cost of the lease, etc., which would impact the overall value of the deal.

Agree
Disagree
Informative: 2
Unhelpful
Funny
Avatar

Scott Gerrels

IPVMU Certified | In reply to John Honovich | 05/08/17 06:08pm

That's quite a flip.

 

Agree
Disagree
Informative
Unhelpful
Funny

Undisclosed Integrator #5

In reply to John Honovich | 05/08/17 06:57pm

... We are all in the wrong business. =_=

Agree
Disagree
Informative
Unhelpful
Funny

Undisclosed #2

IPVMU Certified | In reply to John Honovich | 05/08/17 11:11pm

> $65,000,000 profit in 14 months.  Wow.

Maybe they are leasing at triple rate using the building as a credit line ;)

Agree
Disagree
Informative
Unhelpful
Funny

John Honovich

IPVM | In reply to Undisclosed #2 | 05/08/17 11:15pm

No, not 65 million because they had fairly extensive (tens of millions) in upgrade / build-out costs.

Also, this all in CAD, so 107.5 CAD is 78.5 USD.

Agree
Disagree
Informative
Unhelpful
Funny
Login to read this IPVM report.
Why do I need to log in?
IPVM conducts reporting, tutorials and software funded by subscriber's payments enabling us to offer the most independent, accurate and in-depth information.
Loading Related Reports