Artis REIT (AX-UN-T) has sold its 220 Portage Ave. office building and the adjacent Garry Street Parkade as many of the city’s downtown office properties continue being transferred from institutional into private ownership.

The 17-storey, 169,895-sq.-ft. tower has been one of the most consistently performing office buildings in the market, according to Brett Intrater, executive vice-president at Cushman and Wakefield Stevenson in Winnipeg, who brokered the transaction.

“The building just performs quite well,” he told RENX. “It’s well located, it’s well connected, it’s connected to parking . . . through the underground parkade that is connected to 360 Main.

"And, it’s adjacent to 295 Garry, which came with this property. It has a lot of good attributes.”

He called the property a class-B+ building, noting it had been upgraded and well maintained by Artis, which also has its head office in the tower.

It is certified LEED Platinum, Energy Star and BOMA Best Gold.

RBC and Artis REIT offices in 220 Portage

The almost one-acre property is anchored by RBC, which has been in the building since it was constructed in 1966. “The building was originally built for them,” Intrater said.

Due to confidentiality restrictions, Intrater was unable to divulge the sale price, nor the buyer, though he did say the new owner is a private investor. RENX has learned, however, that the sale was in the $30-million range.

The current occupancy at 220 Portage is close to 90 per cent.

“Artis did a fantastic job maintaining and redeveloping this building,” Intrater said. “Over the last seven years or so, they sunk a lot of money into it.”

That included a living wall in the atrium, where hundreds of plants enliven the entrance amid ample natural light from a bank of large window plates.

He added: “They did a lot of capital upgrades. They modernized a lot of the systems in the building, they made it a little bit more appealing and put a new image on it. They made it more efficient from a utilities standpoint. 

“Because of all that, and they had a pretty aggressive leasing strategy that they undertook, they were able to fill it up.”

That included building new offices for Artis and moving the trust’s office into the property.

“It’s got a smaller footprint in terms of floorplates, and that is attractive to some users here because the average tenant size in Winnipeg is 3,000 to 5,000 square feet,” Intrater explained. He said larger tenants generally have up to 15,000 square feet.

“Some of those who are looking to downsize from a 15,000-square-foot floorplate, which a lot of the buildings have in Winnipeg, could find themselves in our 10,000-and-change footprint and still have a full floor and, you know, private elevator access. There is some appeal to that perspective too.”

Looking ahead in downtown Winnipeg

The 295 Garry parkade is a seven-storey structure with six covered parking areas and one outdoor level. It offers 376 stalls in total.

Artis acquired the properties a decade ago, paying $20.5 million for a 50 per cent interest before later exercising an option to take sole ownership.

The transaction is the latest in a series of office sales in Winnipeg over the past couple of years. Artis has divested several of its properties as it lowered its debt and Slate Office REIT (now rebranded to Ravelin Properties REIT) also sold a portfolio in 2024.

Montreal-based Leyad acquired a couple of Winnipeg properties and local organization the Manitoba Metis Federation has also been investing in the downtown. Neither of those organizations is the buyer of 220 Portage.

As Intrater looks ahead, he expects more activity in 2025.

“You are seeing a lot of opportunities for private groups, like this buyer,” Intrater said. “We do think we’re going to be involved in some conditional office dispositions this year. Larger scale, as well, so there will be some other assets coming to market.“

He said increasing stability in the office sector over the past year is also changing the leasing landscape - Winnipeg had an overall 17.1 vacancy rate as of Q3 2024, but it was 21.2 per cent among class-B and -C properties in the central district.

This stabilization is making office buildings more attractive to potential buyers.

“The office market today has been a situation where a private buyer can come in and get some pretty strong deals. Yeah, there is risk in the rent rolls and whatnot, but for some of the better buildings like this 220 Portage building, you are not seeing a lot of tenant attrition, so it works well,” he noted.

“2025 is going to be an interesting year” on the leasing front, he added. Many owners have been agreeing to shorter-term extensions, but are now “turning off the taps on that and are now looking for tenants to make a commitment on a property, and kind of make a decision. 

“I think that is going to lead to bigger and longer lease transactions which ultimately is going to lead to, hopefully, better value and stronger occupancy throughout downtown Winnipeg.”