Breadcrumb trail links
CPPIB, Oxford Properties had originally sought to receive around $350 million for the properties
Author of the article:
Bloomberg News
Ari Altstedter
Published on February 5, 2024 • Last updated 2 hours ago • 2 minutes reading time
Two Canadian pension funds have struck a deal to sell two downtown Vancouver office buildings with tenants including Amazon.com Inc. for about $300 million. Photo by Kazuhiro Nogi/AFP via Getty Images
Article content
Two Canadian pension funds have struck a deal to sell two downtown Vancouver office buildings with tenants including Amazon.com Inc. for about $300 million.
Germany's Deka Group agreed to buy the towers at 402 Dunsmuir St. and 401 West Georgia St., according to two people familiar with the deal who asked not to be identified because the details are private.
Article content
The Canada Pension Plan Investment Board and Oxford Properties Group Inc., the real estate arm of the pension fund for Ontario's municipal workers, 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 been completed.
Advertising 2
This ad has not loaded yet, but your article continues below.
THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLY
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 more.
- 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 copy of the print edition that you can view, share and comment on any device.
- Daily puzzles including the New York Times Crossword.
SUBSCRIBE TO UNLOCK MORE ARTICLES
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 more.
- 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 copy of the print edition that you can view, share and comment on any device.
- Daily puzzles including the New York Times Crossword.
REGISTER/LOGIN TO UNLOCK MORE ARTICLES
Create an account or log in to continue your reading experience.
- Access articles from across Canada with one account.
- Share your thoughts and join the discussion in the comments.
- Enjoy additional articles per month.
- Get email updates from your favorite authors.
Article content
The funds' initial goal was to raise about $350 million for the properties, sources familiar with the sales process told Bloomberg News in June. But it's been difficult to accurately price office buildings lately with few major properties trading globally, which is one reason the Vancouver Towers sale has been so closely watched both in Canada and abroad.
High interest rates and the shift to remote work have led to continued uncertainty about the value of such assets. Office landlords are facing a rise in borrowing costs, putting downward pressure on valuations, coupled with a decline in demand as more employers implement work-from-home policies.
While these concerns have been weighing on the office real estate outlook for some time, the severity of the office downturn became even clearer last week when banks in the United States and Japan were forced to stock up on reserves to cover potential office real estate losses.
Recommended by Editorial
-
Amazon's office building in Vancouver, second tower for sale
-
Allied Properties REIT takes $500 million in office writedowns
-
Zara billionaire becomes Amazon landlord
Advertising 3
This ad has not loaded yet, but your article continues below.
Article content
In Canada, Allied Properties Real Estate Investment Trust, a major owner of office buildings in cities like Toronto and Vancouver, also announced a $500 million writedown last week.
With central banks in both Canada and the U.S. now signaling that they are likely done raising interest rates, the Vancouver transaction could be the latest sign that clearer financial conditions are helping buyers and sellers prepare for the price to agree. Another Canadian landlord, Dream Office Real Estate Investment Trust, announced the sale of a Toronto building last month for $135 million and began marketing another building shortly thereafter.
Bloomberg.com
Article content
Share this article on your social network