Calgary-based Aspen Properties has acquired Sun Life Plaza, a three-tower office complex of just over one million square feet, in Calgary’s downtown core, RENX has learned.
The three identical towers of 28 storeys each, built in 1981, 1982 and 1984, were purchased by Aspen from Choice Properties REIT (CHP-UN-T) and Sun Life (SLF-T) for $225 million and the skyscrapers are set to undergo significant upgrades and renovations with construction expected to start in the second quarter of 2019.
The buildings, located in the 100 block of 4th Avenue S.W., are currently 90 per cent leased. However, occupancy in the class-A property is expected to drop to the mid-70 per cent level during 2019 with the expiry of some existing leases.
“Our thesis on office space is about thinking of office as a service now going forward,” said Rob Blackwell, chief operating officer of Aspen, in an interview with RENX. “Companies are trying to attract the best talent and trying to provide an environment where their youthful employees are working somewhere that’s energetic that the employees are proud of.
Renovations at Sun Life Plaza
“For us, we see Sun Life as a property with enough scale that we can implement an amenities package like we have at The Edison, which has been very successful for us.
“That amenities package, as well as a new lobby that we plan on doing, we think we can have the scale to provide a best-in-class amenity in the city and elevate what we’ve done at The Edison to somewhere that will be very interesting and new and as forward-thinking as we can.”
Aspen bought the former Encana Place tower, across the street from the Fairmont Palliser Hotel, from energy giant Encana in 2015. Almost immediately, it began to redevelop the 450,000-square-foot building and renamed it The Edison.
The Edison is considered to be a first-of-its kind in Calgary. Aspen took the 30-storey B-class tower built in 1981 and turned it into an amenity-rich building in the heart of the city.
The goal was to attract potential new tenants in a commercial real estate market struggling with an elevated vacancy rate in the neighbourhood of 25 per cent.
Transformation of The Edison
That transformation included several unique features and amenities not seen elsewhere in the market:
* The main floor lobby has a large, open seating area with a large bookcase;
* There are co-working spaces available;
* A recreation room has foosball, billiards and pool tables, an eating area and a beer keg on tap at certain hours;
* There’s also a 7,000-square-foot fitness centre and a golf simulator;
* A basketball court is located on the mechanical level at the top of the building and golf putting surfaces are on the rooftop;
* There’s an outdoor dog park with walking, sitting and shampooing services for canines; and
* Finally, there is access to bicycles for tenants to roam around the downtown streets.
Blackwell said The Edison has become the unofficial tech hub of Calgary with many tech companies setting up shop in the revitalized building.
Aspen owns about $1B in assets
Aspen’s assets are about $1 billion, comprised of 12 office properties in downtown Calgary and Edmonton. Total space is 3.7 million square feet with three office buildings in Edmonton and nine office buildings in Calgary, including the Calgary Tower. Total square footage in Edmonton is about 900,000 square feet and 2.8 million square feet in Calgary.
Blackwell said the three buildings in the Sun Life Plaza share the same common area – a large gathering place on the main floor.
“That’s what we plan to turn that into. More of a gathering place. An area to network. An area for events. Really bringing people together in different ways and on the second floor we see a very significant fitness facility, a tenant lounge, some patio spaces and we’re working on some other unique and kind of yet-to-be-determined amenity spaces,” he said.
Greg Guatto, president and CEO of Aspen, said the conference centre in Sun Life Plaza will be expanded and upgraded.
“We’re also going to spend some time with the tenants to see what they’re looking for. We’ve got lots of fun ideas and lots of things that worked well at The Edison but we’re also going be respectful of such a well-leased building, with some great tenants that we want to stay in this building, and we’re going to see what things resonate with them, too,” said Guatto.
He said the name of the property will change, but that is still to be determined.
Aspen seeks to offer “unique” product
Guatto said Aspen is attempting to create office buildings for the office worker of the future. On the heels of the success it has had at The Edison, it’s trying to stay a little bit ahead of the curve. He said Aspen sees its role as helping companies attract and retain talent.
“We will continue to look for opportunities like we see in Sun Life Plaza to create something very significant,” he said. “We’ll continue to look for those opportunities. Despite a very challenging market, we believe in the city in the long run and this is a long-term view that we’re taking here. And we really like the opportunity.
“It’s differentiating ourselves from the competition and offering something that’s unique and not competing with the other vacant buildings, or vacant spaces, in the downtown and trying to get on everybody’s tour list of who is interested in office space because we are unique.
“That’s what I believe is going to be more and more important for Aspen anyway, going forward.”