Michel Dallaire – PDG de Cominar

Profil de Michel Dallaire, PDG de Cominar, la plus important firme immobilière de Québec

MARK CARDWELL SPECIAL TO THE GAZETTE

QUEBEC – Michel Dallaire laughs when asked about the gaudy Popsicle colour that adorns his company’s fleet of trucks and the front of its corporate headquarters here in the provincial capital.

Photo Francis Vachon pour The Gazette

“It’s supposed to be fushia, but people tell me it’s more like pink,� the 44-year-old president and chief executive officer of Cominar REIT, Quebec’s largest – and now one of Canada’s biggest – owners and managers of commercial properties, said in a recent interview.

“I can’t tell because I have trouble seeing different shades of colour. But I do know that it’s distinctive – and it gets noticed.�

The same could be said about the way Dallaire does business, although he doesn’t seem to have any problems with his vision there.

Less than a year after taking over the company from his ailing father and firm founder, Jules, who died in August, Dallaire closed the biggest deal in Cominar’s history with the purchase in February of the lion’s share of Montreal’s Alexis Nihon REIT.

Under the terms of the $592million deal, which was done in partnership with Halifaxbased Homburg Invest, Cominar acquired 35 industrial and 19 office buildings – 6.5 million square feet of prime Montreal commercial real estate. For its part, Homburg got retail properties such as the twin-tower Place Alexis Nihon in the city’s downtown core.

The deal padded Cominar’s already impressive portfolio of 143 high-quality properties – most of them in the Montreal and Quebec City areas – totalling more than 10.3 million square feet.

Divided almost evenly between office buildings, industrial plants, shopping malls and mixed-use buildings, the company’s leasable space has more than tripled since the Dallaires took it public in 1998, pushing the gross book value of its real-estate assets to $735.7 million at the close of 2006.

According to Dallaire, the Alexis Nihon deal had its genesis in the fall of 2005, when he and his father met with former Nihon CEO and major shareholder Paul Massicotte.

He said they reached an agreement in January 2006, but negotiations hit a snag a month later.

“We couldn’t agree on a price,� said Dallaire, who resisted an urge to go over Massicotte’s head and deal directly with Nihon’s board.

He added that he was surprised to learn in October that the retiring Massicotte had sold his stock to Homburg.

The situation became even more confused when ING Canada announced that it was also interested in acquiring Nihon’s real-estate assets.

To break the logjam, Dallaire and his advisers contacted and talked to both suitors, suggesting various ownership scenarios.

“It was a complicated transaction, but at the end of the day it was a win-win arrangement for everyone,� he told The Gazette.

“Once (Homburg) told me (they) wanted Place Alexis Nihon, I said: ‘Fine, I’ll take the rest of the portfolio.’

“It’s important to respect people in any process,� he added. “If you respect people, they respect you.�

In many ways, that belief – not the company’s wacky corporate colour – is the most recognizable trademark of Cominar and the family that built it.

It began with Jules Dallaire, who left home at 17 and worked for two years as a carpenter in a mine in northern Ontario to raise the seed money he needed to start building houses in 1958.

He switched to the commercial sector in 1972, when he built Le Louisbourg, a 20storey, 160-unit apartment building that housed the first condos in the province.

Jules Dallaire later added commercial construction to his quiver, building small warehouses, office buildings and malls, becoming Quebec’s biggest commercial real-estate owner in the process.

Of the 60-plus buildings he built in the Quebec City area during his 40-year career, Dallaire told this journalist a decade ago that he was most proud of Place de la Cité, a $100-million shopping centre he built in Ste. Foy in 1988.

“In this business you have to roll with the punches,� he said then. “You have to keep all your options open, always be ready to move to a plan B, C or D. You keep moving and improvising until your problem is solved. Most of all, you always have to respect the people you’re in business with – lenders, suppliers, contractors, renters, everybody.�

Like his late father, whom he refers to by his first name, Michel Dallaire started working for Cominar at 14, when he wielded a pick and shovel during the construction of a warehouse.

“Jules always told me you have to learn from the ground floor up and I did – literally!� he said over coffee in a small conference room lined with Dallaire family photos, including one of Jules with golfer Fred Couples, and one of Michel with former U.S. president Bill Clinton.

The oldest of four children – all of whom have shares in Alpha, the family’s private holding company that owns several assets in the Quebec City area, including a bowling alley and two gyms – Michel Dallaire went on to study civil engineering at Université Laval.

He joined Cominar in 1986 as a project manager on the Place de la Cité project. Since then, he has held several senior positions, including executive vice-president and, last spring, president and CEO, a position he assumed functionally in 2003, when cancer first forced his father to the sidelines.

The disease did not, however, stop father and son from continuing to work together on projects, including the Alexis Nihon deal and nine other incomeproducing properties that Cominar purchased in 2006 for $44.1 million

“My father and I were so close,� Dallaire, a father of three, said with visible emotion. “It’s been very hard on everyone.�

He believes, however, that his father would readily approve of the Alexis Nihon deal, which was followed by an announcement in mid-March that Cominar made a cool $10.4 million in profit in 2006, a 17-per-cent increase over the previous year.

“(The Nihon deal) fits nicely into our strategy of increasing our leasable space by expanding our property portfolio,� Dallaire said.

“We have a conservative growth strategy and we follow a very strict set of criteria for the selection of property we want to acquire.� Neil Downey agrees. A financial analyst with RBC Capital Markets, he said the Nihon deal – and the subsequent stability of stock price at the $24 mark – is a reflection of the Dallaires’ sure-handed, sharp-eyed approach to business and the trust investors have in their continued stewardship of Cominar.

“(Cominar) is a wonderful success story as a family business and as a public company,� Downey said from Toronto.

He added that the company faces “another transformational step over the next three to four months� as it absorbs a 60-per-cent increase in size from the Nihon deal.

Dallaire, however, said the company is still looking over other acquisitions.

“If another good opportunity comes along,� he said, “we’ll act.�