Canadian Office Complex Commands $130M
- Jul 30, 2008
Petroleum Plaza, a 315,000-square-foot office property in Edmonton, Alberta, Canada, has been snapped up in a transaction valued at $130 million. Acting on behalf of client DEGI Deutsche Gesellschaft fur Immobilienfonds m.b.H., Morguard Investments Ltd. purchased the property from KingSett Capital, which had owned Petroleum Plaza since 2005. Located in Downtown Edmonton in the Government District, Petroleum Plaza (pictured) consists of two towers linked by a retail plaza. Presently, the 35-year-old property is 95 percent leased to the Alberta Government, which is occupying space under a lease agreement scheduled to expire Dec. 31, 2020. Morguard will oversee management of the property under the new ownership. The Edmonton office market is thriving, due in large part to Alberta’s strong economy, which, while having slowed down a tad due to the floundering economy in the United States, continues to be bolstered by high oil and natural gas prices, increased investment and a growing labor force, according to a report by real estate services firm Addison & Young. The average direct vacancy rate in Edmonton’s Government District submarket is 5.6 percent. For Frankfurt, Germany-based DEGI, the acquisition marks a step forward in its plan to expand its portfolio to the point where 40 percent of its real estate assets consist of properties outside of Europe. Last November DEGI made its entrée into Canada’s market with the acquisition of the 623,000-square-foot Homburg-Harris Centre office project in Calgary for today’s equivalent of approximately $400 million. DEGI and Morguard have worked together in the past, with Morguard having served as DEGI’s advisor on the Homburg-Harris Centre transaction. Headquartered in Mississauga, Ont., Morguard is a real estate investment advisor and management firm representing institutional and private investors in Canadian properties. The company has more than $7.5 billion in assets under management and a portfolio encompassing in excess of 40 million square feet of office, industrial, retail, residential and mixed-use properties.