Homburg Invest Inc.

September 19, 2007 16:31 ET

CN and Homburg Invest Inc. reach agreement on sale of Central Station Complex in Montreal

CN to leaseback headquarters building, rail passenger facilities, in sale netting company C$355 million Homburg adds key Canadian asset to growth portfolio

MONTREAL, QUEBEC--(Marketwire - Sept. 19, 2007) - CN (TSX:CNR)(NYSE:CNI) and Homburg Invest Inc. (TSX:HII.A)(TSX:HII.B)(AEX:HII) announced today they have reached an agreement under which Homburg Invest will purchase the Central Station Complex (CSC) in Montreal and CN will leaseback its corporate headquarters building and Central Station railway passenger facilities.

The transaction, subject to customary closing requirements and regulatory approvals, including federal government approval of an agreement to protect the heritage features of Central Station, will generate proceeds of C$355 million for CN. The transaction is expected to close by yearend.

Claude Mongeau, CN executive vice-president and chief financial officer, said: "We are very pleased to have concluded this transaction with Homburg, which has a solid reputation for managing and developing major urban properties. With a new property manager in charge of the Central Station's extensive retail/commercial and services facilities, the CSC's role as a major downtown Montreal transportation and commercial hub can be enhanced. At the same time our agreement with Homburg allows CN to monetize a key real estate asset, generating significant value for its shareholders."

Richard Homburg, chairman and chief executive officer of Homburg Invest, said: "We are very excited about building a lasting relationship with CN as our anchor tenant. The station is a landmark in downtown Montreal and we are committed to protecting its heritage features. We also see an opportunity to turn this property into a Montreal icon with the potential development of one million square feet for the site. Homburg already has investment and development projects of almost C$1 billion in the Montreal market, and this transaction reinforces our commitment to a marketplace that we consider highly attractive. For our shareholders, the growth potential and prime location of this property represent significant value."

Under the agreement with Homburg Invest, CN will lease back its 17-storey office headquarters building and Central Station railway passenger facilities on a long-term basis. Central Station includes the Grand Hall, train platforms and portions of the sub-track level.

CN and Homburg structured the sale-and-leaseback transaction to reflect the long-term presence of CN's corporate headquarters in Montreal and to ensure continued operation of Central Station for use by VIA Rail Canada Inc., l'Agence metropolitaine de transport, and AMTRAK.

Brookfield Financial acted as the exclusive advisor to CN in the transaction.

CN - Canadian National Railway Company and its operating railway subsidiaries - spans Canada and mid-America, from the Atlantic and Pacific oceans to the Gulf of Mexico, serving the ports of Vancouver, Prince Rupert, B.C., Montreal, Halifax, New Orleans, and Mobile, Ala., and the key metropolitan areas of Toronto, Buffalo, Chicago, Detroit, Duluth, Minn./Superior, Wis., Green Bay, Wis., Minneapolis/St. Paul, Memphis, St. Louis, and Jackson, Miss., with connections to all points in North America. For more information on CN, visit the company's website at

Homburg, with its head office in Halifax, N.S., owns and develops a diversified portfolio of quality real estate, including office, retail, industrial and residential properties throughout Canada, the United States and Europe. The Company's properties total over 14.5 million square feet, representing in excess of C$3 billion in total assets, prior to this transaction with CN.

For CN, this news release contains forward-looking statements. CN cautions that, by their nature, forward-looking statements involve risk and uncertainties, including the assumption that, while CN expects there may be continued weakness in certain segments of the North American economy in the near term, positive economic conditions in North America and globally will continue, and that its results could differ materially from those expressed or implied in such statements. Important factors that could cause such differences include, but are not limited to, industry competition, legislative and/or regulatory developments, compliance with environmental laws and regulations, various events which could disrupt operations, including natural events such as severe weather, droughts, floods and earthquakes, the effects of adverse general economic and business conditions, inflation, currency fluctuations, changes in fuel prices, labour disruptions, environmental claims, investigations or proceedings, other types of claims and litigation, and other risks detailed from time to time in reports filed by CN with securities regulators in Canada and the United States. Reference should be made to CN's most recent Form 40-F filed with the United States Securities and Exchange Commission, its Annual Information Form filed with the Canadian securities regulators, its 2006 Annual Consolidated Financial Statements and Notes thereto and Management's Discussion and Analysis (MD&A), as well as its 2007 quarterly consolidated financial statements and MD&A, for a summary of major risks.

For Homburg Invest Inc., this news release may contain statements that are "forward looking" regarding expectations with respect to market conditions, acquisitions, occupancy rates, capital requirements, sources of funds, expense levels, operating performance and other matters. These assumptions and statements are subject to various factors, unknown risks and uncertainties, including general economic conditions, local market factors, performance of other third parties, environmental concerns, and interest rates, any of which may cause actual results to differ from the Company's current expectations.

Information and statements in this document, other than historical information, should be considered forward-looking and reflect management's current views of future events and financial performance that involve a number of risks and uncertainties. Factors that could cause actual results to differ materially include, but are not limited to, the following: general economic conditions and developments within the real estate industry, competition and the management of growth. The Toronto Stock Exchange has neither approved nor disapproved of the information contained herein.

Contact Information

  • CN
    Mark Hallman (Media)
    Director, Communications, Media & Eastern Region
    (905) 669-3384
    Robert Noorigian (Investment Community)
    Vice-President, Investor Relations
    (514) 399-0052
    Homburg Invest Inc.
    Richard Homburg (Media & Investors)
    Chairman and CEO
    (902) 468-3395