On Thursday, MaRS announced that I had received $290 million in 19-year bonds issued by Phase II Investment Trust from iA Financial group, Manulife, and Sun Life Financial. The release of the money represents the completion of a significant private financing of MaRS’ West Tower.
“The proceeds of this transaction will be used to repay most of the Ontario government’s interest-bearing loans to MaRS almost three years ahead of schedule,” a press release from the innovation centre said.
MaRS has over 1.5 million square feet of state-of-the-art lab and office space in the heart of Toronto’s Discovery District. The facility is now home to more than 140 research labs and companies spanning the entire innovation.
“The West Tower is fully leased, and will soon generate the annualized net operating income required to be entirely self-sustaining, putting MaRS on stable footing for decades to come. Canada now has an urban innovation hub at a scale that is fully competitive with any global counterparts,” according to Ilse Treurnicht, CEO of MaRS.
But this has not been the case a couple of years ago.
Back in 2014, the Liberal government of government extended a $309 million interest-bearing loan to MaRS, with the assumption that the tower would achieve 80 per cent occupancy. About $65 million of that money was used to buy out an American developer.
However, the building was two-thirds empty for months. Prospects for the West Tower picked up gradually and in 2015, Facebook Canada announced it was setting up shop in the tower. Other technology companies such as space-sharing service Airbnb now have offices in the tower.
“We are grateful that the Government of Ontario stepped up to help us solve an unforeseen problem, and we are delighted to welcome Manulife, Sun Life and iA Financial Group as financing partners. MaRS has incredible momentum and is well positioned to build on this successful foundation for many years to come,” said Gord Nixon, chair of the board of directors at MaRS.
The list of the businesses renting space at MaRS Discovery District include:
- Multinational medical and technology firms such as Autodesk, Johnson & Johnson’s JLABS (housing over 40 biotech and health startups), Merck, PayPal, Etsy, IBM, CIBC, and RBC;
- Growing firms such as League, Synaptive Medical, Deep Genomics, Interface Biologics, Highland Therapeutics, Datifex, NRStor, Triphase Accelerator;
- Investment teams including Real Ventures, BDC, Blueline Bioscience, Emerald Technology Ventures, ArcTern Ventures and Cycle Capital; and
- Leading research groups from the University of Toronto, University Health Network (including Princess Margaret Cancer Centre), Ryerson University, Ontario Institute for Cancer Research and Public Health Ontario.
“MaRS has established itself as a centre for innovation and entrepreneurship, and we are pleased to support the continued growth of this market in Canada,” said Candace Shaw, head of private fixed income at Sun Life Investment Management.
“The financing of MaRS’ West Tower is a sound investment opportunity for Manulife. We are pleased to have been involved and to have co-led the effort,” said Greg Wood, vice president and senior managing director for Canadian real estate finance at Manulife. “LOFT: Lab of Forward Thinking, a new initiative of Manulife’s Investment Division, is already a tenant of an adjoining building in the MaRS Centre.”
Ventures within the MaRS network raised $2.6 billion in capital and generated $1.3 billion in revenue between 2008 and 2015, and today employ more than 5,200 people.
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