Montréal startup space Notman House is officially on the market, and local real estate investment and rental startup Guiker wants to buy it with the help of community investors.
Guiker, a rentals-focused real estate startup, is proposing a fractional ownership model to buy back Notman House. The company, along with roughly 30 other investors, plans to make an offer today, BetaKit has learned.
“The vision really is to take Notman to the next level, in terms of what it was always meant to be, which was a community initiative,” said Nan Hao, founder and CEO of Guiker.
“We’re really kind of on the brink of losing Notman House.”
Guiker says its offer is nominally competitive with the current asking price of $5,495,000 CAD. Hao says they have reason to believe that higher offers will be presented, but that theirs is unique because community members will share ownership.
The proposal comes after the OSMO Foundation defaulted on its debts to the Business Development Bank of Canada (BDC) and Investissement Québec, who provided initial grants to finance Notman House. The OSMO Foundation, which owns and operates the startup hub, owes $323,000 in unpaid mortgage fees. The court ordered a supervised sale of the heritage building, which has stood for 187 years in Montréal’s Plateau neighbourhood.
Notman House, despite a heavy debt load, is generating roughly $700,000 CAD in revenue yearly through its event and meeting space fees, rental income, and restaurant, Café OSMO, according to a Guiker investment proposal obtained by BetaKit. According to the proposal, erasing the current debt would allow the hub to continue providing community space for events and innovation.
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Founded in 2015, Guiker operates a rental platform that aims to streamline leasing by connecting landlords and tenants. Solutions Guiker Inc. acquired Willow.ca, a Toronto-based proptech startup that offered a fractional real estate investment platform, in November 2023.
The fractional real estate model allows individual investors to buy shares in real estate assets, rather than entire properties. This way, a smaller amount of capital is necessary to reap the benefits of real estate investments.
Applying this model to the buyback of Notman House would require a number of investors, which Hao hopes will come from the Montréal startup ecosystem. These investors would function as limited partners if Guiker assumed ownership of Notman House—similar to buying shares in a company.
“Whoever believes in the Notman House continue to exist, to carry on this mission, will be able to participate not only as a community member, but more importantly, as a rightful owner,” Hao explained.
The approach is in line with one of three options put forth in a LinkedIn post by John Stokes, current board chair of the OSMO Foundation: “Our hope is that friendly purchasers, who believe in Notman House’s mission and vision, will buy the property and keep it under the purview of Montréal’s startup ecosystem. In this scenario, Notman House could continue with a new ownership structure and without the burden of making large payments associated with the current debt.”
Stokes declined an interview request to BetaKit.
The initiative also emphasizes a split between ownership and management, to reinforce “checks and balances.” Guiker and the limited partners would be the for-profit owners, while the management and operations of Notman House would be run by a non-profit.
With this plan, Guiker is trying to align incentives: BDC’s mandate to support small and medium-sized Canadian businesses and Notman House’s mission to connect and support founders.
“I think there’s an external value capture that’s not necessarily being measured in terms of the ecosystem,” said Nectarios Economakis, partner at Amiral Ventures. The total value of something like Notman House, he said, is difficult to measure because of its community impact.
Since the hub is housed within a heritage building, it cannot be torn down. But depending on ownership, it could cease to exist as a meeting space for those in the startup community.
“We’re really kind of on the brink of losing Notman House,” Gabriel Sundaram, co-founder of Mission.dev, told BetaKit. “What we believe is that our initiative is the only one that gives an opportunity for Notman’s mission to continue to exist.”
“We’re hopeful that BDC and Investissement Québec take that into consideration.”
BDC declined a request for comment from BetaKit. Investissement Québec also declined comment to BetaKit, citing the court-supervised sale of Notman House as an ongoing legal matter.
Images courtesy Notman House.