Calgary-based Aspen Properties and Edmonton-based Rohit Group have made their second joint office acquisition in the past few months with the purchase of The District at Beltline, a 360,000-square-foot mixed-use campus just outside Calgary's downtown core.

The campus, located at 227 11th Ave. SW, includes three, midrise class-A office buildings, a restaurant and a food hall.

It was purchased from Spear Street Capital, a San Francisco-based investment company, however, no financial details of the transaction have been released.

Aspen Properties executive chair Scott Hutcheson told RENX the mixed-use campus presented a good opportunity for Aspen and Rohit to expand their partnership on Alberta office properties.

“The District is exactly the kind of asset we love; a place with genuine energy, strong bones, and a community built around it," he said.

"Partnering with Rohit on this acquisition, following our work together in Edmonton, speaks to the confidence we both have in Alberta real estate and in each other as partners."

Adding another Beltline asset

Hutcheson said The District is the top office property of its class in the Beltline neighbourhood.

“(It has) very good amenities, well invested in," he said. "And we have two other Beltline buildings that we think would be second and third best Beltline buildings."

Aspen’s other two properties in the neighbourhood are Palliser South, which is part of the Calgary Tower complex, and a 16-storey class-B office tower at 333 11th Ave. SW, known as the 333.

"We like what's happening in the Beltline today," Hutcheson said. "We like the position of being able to deliver to our tenants those three buildings."

The office space in The District is 80 per cent occupied, the companies said.

The site was initially developed in 1997 and completed in 2003. Spear Street bought the complex in 2018 from Dream for $98 million, and announced in 2020, it would spend $10 million on improvements.

Building on the partnership with Rohit

The acquisition of The District solidifies and strengthens Aspen’s relationship with the Rohit Group, Hutcheson said.

In July, Aspen announced it had brought the Rohit Group on as a co-owner of three downtown Edmonton office buildings, with the partners saying the deal reflected their shared confidence in Edmonton's office market and Alberta's long-term economic outlook.

That partnership covers the former Bell Tower complex, including the Annex, and MNP Tower.

Rohit Group CEO Rohit Gupta said adding The District to the portfolio is a natural extension of the partnership.

“Calgary has tremendous momentum, and The District is a unique asset that captures what the next generation of commercial real estate looks like — mixed-use, community-driven, and purpose-built for the way people want to work and gather. We are proud to bring this asset into our shared portfolio,” Gupta said.

Vacancy still high in Calgary but market is evolving

Hutcheson said there’s a move-up movement in the office space market in Calgary these days.

“It's not a market that on the overall surface is super healthy. It's still in the 20s for vacancy rate. But the best-in-class and the A and AA buildings are filling up quite nicely, whereas the C, the B-minus (buildings) are emptying,” he said.

“Tenants have discretion. They have options, and they're not looking for free rent the same way as they would get in the lower-class buildings. They're looking for amenities. They're looking for fresh investment in the buildings. And the rent is relatively affordable, considering other markets around the world or the history of Calgary. So, they can afford to move up.”

Hutcheson said the partnership hopes to make more acquisitions. “We are excited about the market today and where the market's going and the pricing of office (assets),” he said.

Gupta told RENX, Rohit Group is also bullish on the Alberta marketplace and would like to continue to aggressively seek more class-A office space. 

“We see positive work, or more creative work, being done by the federal government to support the energy sector in Alberta," he said. "We see demand from data centre providers in Alberta.

“We see continued business growth, non-energy business-based business growth in Alberta. And we see a favourable business environment, both from a regulatory perspective and business friendliness. That gives us positive tailwinds for the next decade for Alberta.”

About Aspen Properties and Rohit Group

Aspen Properties is a privately held, fully integrated real estate company with more than 25 years of experience owning and managing real estate in downtown Calgary and Edmonton. Together with its investment partners, Aspen owns and manages about 4.63 million square feet of office space and close to 3,400 parking stalls across 15 buildings in downtown Calgary and Edmonton.

Rohit Group is a nationally integrated real estate developer. Since 1986, the company has grown into a diversified enterprise with over $1.4 billion in assets under management with residential, rental, land and infrastructure developments.