Canadian Pacific Railway has a plan to convert surplus North American real estate into revenue.
The Calgary-based railway company announced Jan. 20 that it has formed a joint venture with Toronto-based Dream Unlimited Corp., a publicly traded real estate company that specializes in office, industrial and retail space.
The arrangement is aimed at developing CP’s surplus landholdings and converting them into “long-term shareholder value.”
CP’s portfolio of surplus properties includes South Edmonton Yard, a 92-acre site close to downtown Edmonton, Obico, a 74-acre property near Toronto, Schiller Park, a 75-acre site in Chicago, and Lucien L’Allier, a three-acre site in downtown Montreal.
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The joint venture, known as Dream Van Horne Properties, or Dream VHP, is named after William Cornelius Van Horne, who served as CP president beginning in 1888.
As many as 4,000 acres could be developed in Canada and the United States, both rural and urban properties.
CP will provide the land and Dream Unlimited will come up with plans to develop and commercialize the properties.
CP did not say whether the properties will be sold or leased once they are fully developed.
“Since mid-2012, CP has undergone a remarkable business transformation that has generated significant surplus real estate,” said chief executive officer Hunter Harrison.
“The formation of Dream VHP is the result of a comprehensive selection process to find the right partner with the expertise and vision necessary to unlock the significant long-term shareholder value from those assets.”
CP spokesperson Jeremy Berry said in an email that the “initial portfolio contains over 30 properties in Canada and the U.S.”
New parcels may be added in the future as CP continues its assessment.
“Over the next six months, Dream VHP will do an assessment on the opportunities and then come up with next steps,” Berry said.
“As part of the assessment of the opportunities, Dream VHP will consider all options as it looks to maximize the potential of these properties.”
CP is due to release its third quarter earnings report today.
brian.cross@producer.com
