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GWL Realty Completes 25-Property Asset Swap in Buzzer-Beating Paper Transaction

Insurer's Property Adviser Completes Asset Transfer Days Before Capital Gains Tax Increase

College Park Shops, as GWL Realty's building at 444 Yonge Street in Toronto is known, was one of 25 properties involved in a recent property transfer. (CoStar)
College Park Shops, as GWL Realty's building at 444 Yonge Street in Toronto is known, was one of 25 properties involved in a recent property transfer. (CoStar)

The real estate investment adviser for one of Canada's largest insurers completed what could be the largest paper transaction in the second quarter of 2024 in a move completed just before changes in the federal capital gains tax kicked in.

GWL Realty Advisors completed the sale of 25 Canadian properties spanning 3.7 million square feet, representing about one-tenth of its total portfolio, in a legal process finalized June 20. The non-market deal was an example of a company transferring assets to a different holding company under the same corporate umbrella.

The deal was one of a flurry of such arrangements finalized in the days before June 25, the date when a higher capital gains tax took effect in Canada, as confirmed by Canada's CoStar research team that monitors and records such transactions.

GWL Realty Advisors is a subsidiary of the Great-West Life Assurance Company, a company founded in Winnipeg in 1891 and that merged with Canada Life in January 2020. It also does business in the United States through its partnership with Sagard Holdings. Power Corporation of Canada, a Montreal-based holding company led by the Desamarais family, owns 68.1% of Canada Life, according to its website.

The buyer of the 25 GWL properties is listed as RA Investment 13 Holdings CP Inc., another arm of GWL.

Such in-house transactions are considered routine administrative maneuvers practiced by many companies and are often undertaken as a means of minimizing financial or legal liabilities or reducing exposure to taxes. CoStar News contacted a representative of Canada Life but was not immediately offered an explanation for the transfer of properties.

In April, the federal Liberal government of Canada increased the one-half capital gains inclusion rate to a two-thirds inclusions rate. The government stated that the tax hike aims to increase federal revenue by $19.4 billion over five years.

The new federal measures entail increasing the capital gains inclusion rate for corporations from 50% to 66.7%. For individuals, the inclusion rate remained at 50% for the first $250,000 of capital gains, and increased to 66.7% for gains over $250,000.

The Canadian federal government anticipated that the rush of sales prior to the deadline would generate $6.9 billion in increased tax revenue, allowing it to maintain its promise to keep the most recent annual deficit under the promise threshold of $40.1 billion.

GWL Realty has a real estate portfolio of approximately 250 properties spread over almost 44 million square feet with a value of $17.9 billion in assets under management, according to its website.

The properties listed in the recent asset-transfer transaction are:

  1. 505 4th St SW Calgary
  2. 6707 Elbow Drive SW Calgary
  3. 1601-1651 Welch St. North Vancouver BC
  4. 1701-1711 Welch St North Vancouver 
  5. 205 Market Drive Milton, Ontario
  6. 2200 Yukon Court, Milton, Ontario
  7. 2790 Argentia Road, Mississauga
  8. 2795 Argentia Road, Mississauga
  9. 2800 Argentia Road, Mississauga
  10.  2810 Argentia Road, Mississauga
  11. 2815 Argentia Road, Mississauga
  12. 2820 Argentia Road, Mississauga
  13. 2825 Argentia Road, Mississauga
  14. 2835 Argentia Road, Mississauga
  15. 2845 Argentia Road, Mississauga
  16. 2855 Argentia Road, Mississauga
  17. 2865 Argentia Road, Mississauga
  18. 2880 Argentia Road, Mississauga
  19. 2900 Argentia Road, Mississauga
  20. 7-21 College St., Toronto
  21. 3132 Eglinton Ave. E, Toronto
  22. 270 Wilson Ave., Toronto
  23. 151 Yonge St., Toronto
  24. 444 Yonge St. Toronto
  25. 6061-6065 Yonge St., Toronto