Pension funds sell 2 Vancouver office towers in $300-million deal
CPPIB, Oxford Properties had initially aimed to get around $350 million for the properties
A pair of Canadian pension funds struck a deal to sell two downtown Vancouver office buildings with tenants including Amazon.com Inc. for about $300 million.
tap here to see other videos from our team.
Pension funds sell 2 Vancouver office towers in $300-million deal Back to video
tap here to see other videos from our team.
Germany’s Deka Group agreed to purchase the towers at 402 Dunsmuir St. and 401 West Georgia St., according to two people familiar with the deal who asked not to be named because the details are private.
Canada Pension Plan Investment Board and Oxford Properties Group Inc., the real estate arm of the pension fund for Ontario’s municipal workers, had put the buildings up for sale about six months ago. Spokespeople for Oxford Properties, CPPIB and Deka Group declined to comment on the sale, which has not yet closed.
Subscribe now to read the latest news in your city and across Canada.
- Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, Victoria Wells and others.
- Daily content from Financial Times, the world's leading global business publication.
- Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.
- National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.
- Daily puzzles, including the New York Times Crossword.
Subscribe now to read the latest news in your city and across Canada.
- Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, Victoria Wells and others.
- Daily content from Financial Times, the world's leading global business publication.
- Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.
- National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.
- Daily puzzles, including the New York Times Crossword.
Create an account or sign in to continue with your reading experience.
- Access articles from across Canada with one account.
- Share your thoughts and join the conversation in the comments.
- Enjoy additional articles per month.
- Get email updates from your favourite authors.
Don't have an account? Create Account
The funds had initially aimed to get around $350 million for the properties, sources familiar with the sales process told Bloomberg News in June. But recently, it’s been hard to accurately price office buildings because few sizable properties have traded globally, one reason the sale of the Vancouver towers was so closely watched both in Canada and abroad.
High interest rates and the shift to remote work have led to prolonged uncertainty over what such assets are worth. Office landlords have been facing a rise in borrowing costs that’s pressured valuations, coupled with a slump in demand as more employers have work-from-home policies.
While these concerns have been weighing on the outlook for office properties for some time, the severity of the office downturn was thrown into sharper relief last week as banks in the United States and Japan were forced to bulk up reserves against potential losses in office properties.
In Canada, Allied Properties Real Estate Investment Trust, a major owner of office buildings in cities including Toronto and Vancouver, announced a $500-million writedown last week as well.
With central banks in both Canada and the U.S. now signalling they are likely done raising interest rates, the Vancouver transaction may be the latest sign that clearer financial conditions are helping buyers and sellers agree on price. Another Canadian landlord, Dream Office Real Estate Investment Trust, announced the sale of a Toronto building for $135 million last month, and began marketing another one shortly after.
Bloomberg.com
