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Before there was Bay Street, there was St. James Street. For nearly a century, this Montreal thoroughfare – now known as Saint-Jacques Street – was the heart of Canadian finance, until the spectre of Quebec sovereignty and the rise of Toronto knocked the city into also-ran status.

But late last year, National Bank of Canada broke ground on a 40-storey, $500-million highrise, right here on the same street where it was headquartered a century ago. The symbolism is rich: The development marks the return of a major Canadian financial institution to this historic location, as well as the first major bank head office built in decades outside of Toronto.

“There’s never been a question of leaving Montreal,” says Claude Breton, vice-president of public affairs with National Bank. “We have always planned to stay here and invest in this city.”

And as Montreal has emerged in recent years from its decades-long economic doldrums, National Bank plans to capitalize on the newly buoyant metropolis with a head office that will draw workers from the city’s emerging creative industries – especially its booming tech sector.

National Bank's new head office, shown in this rendering, will be located at 800 Saint-Jacques Street West, the Montreal street once the heart of Canadian finance.Hand-out

As of 2017, the bank was still renovating its existing head office on de la Gauchetière Street West, at a cost of about $3-million a storey in a 28-storey building. “After we completed our first year [of renovations],” says David Annett, vice-president of sourcing and real estate at National Bank, “we asked ourselves why we were doing this in a 35-year-old, multitenant building.”

Instead, the bank decided to custom-build its own property, on an 85,000-square-foot parcel purchased in January of 2018 from Montreal developer Broccolini.

When finished in 2022, the result will be far closer to the tech campus model that Canada’s other big banks have been moving toward. Bank of Montreal plans to move 3,500 employees into an “urban campus” at Toronto’s iconic intersection at Yonge and Dundas streets by 2021. The campus is to feature collaborative, open-plan workspaces. By 2023, Canadian Imperial Bank of Commerce aims to move its head office – and 15,000 employees – into Bay Park Centre, a 2.9-million-square-foot complex in which the bank will be the majority tenant. And Royal Bank of Canada, ahead of the curve, moved more than 4,000 employees to Toronto’s RBC WaterPark Place in 2014, into offices also intended to appeal to youthful workers, with an open-concept design, bike lockers, and other amenities.

National Bank’s approach, however, is somewhat unique. Instead of dispersing employees to new locations, it will centralize those currently scattered throughout six buildings in Montreal, including the 5,000 at its existing head office. Mr. Annett believes this convergence, as well as the bank being the building’s sole occupant, will allow the company to go further, architecturally and creatively, than other institutions have.

Employees will move freely throughout the building; a two-storey “collaborative” cafeteria will serve as a central social hub; and in the most dramatic departure from convention, the building will contain few designated offices, even for senior executives. Instead, employees will choose where and how to work on a given day within the partition-free, open-air floors.

The bank’s overall digital pivot is par for the course in Canadian banking circles – with the advent of everything from blockchain to robo-advising, the country’s banks have spent the past few years prioritizing digital initiatives over traditional business sectors. National Bank underwent a restructuring over the past several years, eliminating 600 traditional jobs and hiring 500 in sales and information technology.

“You see the financial industry transforming to become more a technology business,” says Mr. Annett. “So when you want to bring that staff in, you need to offer a different environment, where employees are empowered to work on solutions and ideas they wouldn’t before. ... All the tech tools that we have are only useful in the context of a culture change.“

The timing is right: The digital workforce is booming in Montreal.

Toronto still beats the city by raw numbers: The most recent Tech Talent Scorecard, created by real estate service CBRE Group, ranked Toronto as the No. 4 city for tech talent in North America, 10 spots ahead of Montreal. Adding to that, more than 8 per cent of Toronto’s labour force works in finance, compared with Montreal’s 4 per cent, and the country’s biggest city still looks like the top destination for an institution looking to situate itself at the intersection of tech and finance.

But Montreal has a familiar advantage: cost-effectiveness. Tech salaries are lower here (an average US$74,000 compared with US$83,000 in Toronto, according to CBRE) and real estate is cheaper.

According to that same CBRE report, Montreal has the fastest growing tech market in North America. “And this is all new to Montreal,” says Avi Krispine, executive vice-president and managing director of CBRE in Quebec. “When markets are up or down, you see investment, but when it’s grey, when there’s uncertainty, things get bad. Montreal was grey for a long time … but it’s pretty clear that we’re not going to go through that again any time soon.”

The downtown commercial vacancy rate is still higher than Toronto or Vancouver, at 6.6 per cent as of the third quarter of 2018. But that’s been trending downward as the city sets new records for absorption, with more tenants moving in than out. And some wiggle room in the vacancy rate positions the city at an advantage in other ways.

“If you look at the horizon for Toronto and Vancouver, regardless of the fact that we have many new developments in those markets, we’re not going to see significant relief [large new spaces] until 2021,” says Stuart Barron, national director of research for real estate service Cushman & Wakefield. “There aren’t a lot of options if you’re a significant user, so it’s a doors-open opportunity for Montreal.”

That bodes well for the continued growth of Montreal’s digital ecosystem, and for National Bank to make the best of that growth. The bank’s dedication to its home city is still a declaration of difference from the other big banks. National Bank, sixth in terms of revenue among the big banks but lagging fifth-place CIBC significantly, is targeting more national growth, especially in commercial and private banking, and its already strong wealth-management business. It plans to mostly hold the course in other respects. Sixty per cent of its revenue was still generated within Quebec as of 2016.

But that may not be the disadvantage it appears to be, especially if Montreal continues to boom. “People want to invest in great cities,” says Mr. Krispine at CBRE. “And they want the live-work-play environment. You see this with the approach National Bank is taking with their building, and with the spaces the tech industry is looking for.” And, he adds, there’s no city in Canada more live-work-play than Montreal.