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MONTREAL-In the latest example of private infrastructure investment, the Canadian National Railway Co. has agreed to a $355 million sale/leaseback of this city’s Central Station transit terminal and ancillary facilities. The deal includes CNR’s 17-story corporate headquarters and the railway passenger facilities, around which new owner Homburg Invest envisions upwards of one million sf of new mixed-use development.

“We see an opportunity to turn this property into a Montreal icon,” CEO Richard Homburg offered in announcing the agreement, one he says “reinforces our commitment to a marketplace that we consider highly attractive.” Homburg notes that his firm has already spent more than $1 billion on commercial real estate in Greater Montreal, displaying confidence that the largest city in the province of Quebec will thrive going forward. Located along the Saint Lawrence Seaway, the metropolis of 3.6 million people is still the largest inland port in the world, providing for a diverse economy.

CNR’s CFO, Claude Mongeau, praises Homburg Invest’s reputation for managing and directing complex urban properties. Besides expressing confidence that the station’s role as a centerpiece of downtown Montreal can be enhanced, Mongeau says the agreement will allow his organization to “monetize a key real estate asset, generating significant value to shareholders.” The deal also ensures CNR’s presence in the city, he says, as well as continued operation of the station by such rail lines as Amtrak and VIA Rail Canada Inc., along with the regional transit authority.

The sale/leaseback does require federal government approval of an initiative to protect the historical features of the station, a goal that Homburg insists his firm is eager to achieve for a facility now approaching its 65th anniversary. Should the proposal pass muster on that matter and the normal regulatory clearance, both sides say they anticipate closing on the deal by year’s end.

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