Case Name :      Centre Corporate Abbott, Building A

Authors :           Chuck Grace, Fraser Sager

Source :             Ivey Publishing

Case ID :            W13449

Discipline :        Finance

Case Length :    24 pages

Solution Sample availability : YES

Plagiarism : NO (100% Original work)

The morning of October 9, 2012 found the portfolio manager for the Thackery Real Estate Fund (TREF) lost in thought. TREF was a large investment fund that specialized in commercial and industrial real estate. While TREF had a number of investors, there was one large institutional investor, and it had asked for an update on the fund by week’s end. Weighing on the portfolio manager’s mind was a particular industrial park in Montreal, Quebec known as the Centre Corporate Abbott. He was focused specifically on a proposed investment that required $20 million to purchase a completed, tenanted building known as Building A. In 2008, the portfolio manager had bought two other adjacent properties for $17 million from the same developer. In making his decision, he knew that the economic news across the globe was not rosy. In Canada and Quebec, the manufacturing sector had still not overcome the challenges of 2008’s Great Recession. For Quebec in particular, it also looked like the voters might be leaning towards another separatist government and news of corruption in the construction sector had become daily fodder. The portfolio manager wondered whether he should follow through with the investment and, if he did, how he would explain his recommendation to his investors as early as Friday.