Bombardier Inc.’s effort to bolster its cash reserves is getting a lift from the booming real-estate market in Canada’s biggest city.

The maker of planes and trains agreed to sell its Downsview factory in Toronto to Canada’s Public Sector Pension Investment Board for about $635 million. The transaction is expected to close in the second quarter, increasing cash by more than $550 million after costs, Bombardier said in a statement Thursday as it reported earnings.

Bombardier Boosts Cash Drive With $635 Million Toronto Land Deal

Alain Bellemare

Photographer: Andrew Harrer/Bloomberg

The land sale buoys Chief Executive Officer Alain Bellemare’s goal of fortifying Bombardier’s balance sheet, which is saddled with about $9 billion of debt from pricey development programs for the C Series airliner and the Global 7000 business jet. Bombardier raised C$638.4 million ($498 million) in a share offering in March, taking advantage of this year’s biggest stock gain among Canadian industrial companies.

Bombardier will continue to operate from Downsview for as many as three years after the land sale closes, with options for two one-year extensions. Production will eventually be moved to a 38-acre site at Toronto Pearson International Airport, where Bombardier plans to open a final assembly plant for its Global business jets.

‘Underutilized Asset’

Selling Downsview and moving to Pearson will “allow us to monetize an underutilized asset, further streamline and optimize our business aircraft operations, and will support further economic development and job growth in the Greater Toronto area,” Bellemare said in the statement.

Bombardier said in January that it had begun reviewing options for Downsview because the company uses only about 10 percent of the 375-acre site and bears the entire cost of operating a 7,000-feet runway. Cowen & Co. analyst Cai von Rumohr said in February that Downsview could fetch as much as $1 billion, a “wild card’’ that would add “upside’’ to Bombardier.

Bombardier Boosts Cash Drive With $635 Million Toronto Land Deal

Bellemare is about halfway through a five-year turnaround plan designed to boost profitability and cash flow. Having shored up liquidity, cut jobs and struck a partnership in which Airbus SE will take control of the C Series, the CEO is now targeting a debut later this year of the Global 7000.

Bombardier reported a surprise adjusted profit of 1 cent a share in the first quarter. Analysts had predicted the company would break even, according to the average of estimates compiled by Bloomberg. Sales climbed 12 percent to $4.03 billion, compared with expectations of $3.88 billion.

CRJ900 Order

Bombardier now expects the joint venture with Airbus to close before the end of the second quarter, according to Thursday’s statement. The companies had originally been targeting a closing in the second half of the year.

The Canadian planemaker also said it reached an agreement with American Airlines Group Inc. to sell 15 of its CRJ900 regional jets, an order with a list value of $719 million before customary discounts. American also took an option to buy 15 more.

Bombardier’s widely traded Class B shares climbed 1.8 percent to C$3.93 Wednesday. The stock has surged 30 percent this year while Canada’s benchmark S&P/TSX Composite Index slumped 3.6 percent.