Dundee REIT Picks up $832M Portfolio Across Four Canadian Cities
- Jul 25, 2011
July 25, 2011
By Nicholas Ziegler, News Editor
REITs continue to be one of the hot commodities. Late last week, Dundee REIT announced it purchased a portfolio of office properties worth $831.8 million from affiliates of Blackstone Real Estate Advisors LP and Slate Properties Inc. The 29 properties, located in Toronto, Ottawa, Edmonton and Calgary, include five assets that will be directed to third parties for $142 million, with Dundee directly holding the rest.
Those remaining 24 assets total 2.7 million square feet, most of which are in the downtown business district of Toronto and have an average leased rate of 93 percent. Dundee is no stranger to high-value acquisitions, completing Canada’s largest-ever real estate sale in 2007. Now, with this — the largest office portfolio ever acquired by a Canadian REIT — Dundee is looking forward to a high-growth year. “Our adjusted funds from operations will grow even faster in 2012 than in 2011,” said Michael Cooper, CEO of Dundee.
The downtown Toronto office market recorded positive absorption of over 450,000 square feet in the first two quarters of this year, according to CB Richard Ellis. The vacancy rate in downtown has declined for four consecutive quarters, falling to 5.9 percent the second quarter of 2011. As occupancy tightens in the downtown core, rental rates are experiencing upward pressure.