UPDATED: Armco Capital has announced its third acquisition of a major downtown Calgary office property, adding the First Canadian Centre to its rapidly expanding portfolio in the city.

The firm had recently announced the purchase of the 1.4-million-square-foot Bow Valley Square complex in the heart of the city. On Wednesday in a LinkedIn post it announced the acquisition of First Canadian Centre, “adding to our growing portfolio in Alberta.”

“This 41-storey class-A office tower, offering 540,000 (approx.) square feet of office and retail space, complements our recent purchases of Bow Valley Square and Altius Centre, bringing our total office space in Calgary to over 2.4 million square feet,” the post by Armco states.

“First Canadian Centre is designed to meet the needs of modern businesses, offering flexible office solutions and prime retail space in Calgary's dynamic downtown core. The building’s mixed-use design and Plus 15 Pedestrian Walkway System access make it an ideal location for both professional tenants and retail businesses.

“In addition, we’re excited to share the potential for a residential tower on-site, leveraging the existing foundation originally designed for a 64-storey structure in 1981. If developed, this project could further enhance the property’s position as a dynamic, mixed-use destination, integrating living, working and retail spaces in Calgary's downtown.”

In a response to the post, Armco president George Armoyan noted: "Very proud of our newest acquisition. I can’t wait to start the new residential tower on the existing foundations and underground infrastructure."

Armoyan was also in the news this week when he became chair of the board of trustees of Slate Office REIT, the latest move in a public battle about management of that trust. Another Armoyan company, G2S2 Capital, is the REIT's largest shareholder.

About First Canadian Centre

Armco said the First Canadian Centre acquisition strengthens its position in Calgary and supports its ongoing commitment to growth and value creation.

The iconic skyscraper was previously part of GWL Realty Advisors portfolio. GWL, as it was then known, acquired the tower in 2005 from the Bank of Montreal for $188 million according to published reports at the time. Financial details of this new transaction have not been disclosed.

Armco said key highlights of First Canadian Centre include:

• Direct link to Calgary’s Plus 15 Pedestrian Walkway System, providing access to restaurants, retail shops, hotels and services;
• Modern amenities including underground heated parking, a secure bicycle cage, conference centre, on-site management, 24/7 building access and security and banking services. The building also features a distinctive façade and a 10-story atrium;
• Sustainability: First Canadian Centre is certified BOMA BEST Platinum;
• Prime location: The building is situated steps from Calgary’s Core Shopping Centre and connected by its LRT network and bus routes.

In a recent interview with RENX, Steven Darrow, president of Atlantic Canada and Alberta for Armco, said the company got involved in Calgary a few years back through G2S2 Capital (Armco’s Halifax-based parent company) by making “some significant investments in the oil and gas sector when there was a bit of a downturn in 2020.”

Armco has faith in office rebound

He stressed the company has faith the office sector will rebound from the downturn it has experienced.

“We don’t think work from home is a permanent thing. I’m sure there will always be some flexibility but we’re big believers in the return to office," Darrow said.

Armco is a real estate development company which owns a handful of commercial properties, schools and land for development. Armco Capital Inc. was founded in 1982 by members of the Armoyan family.

Last year, Armco also acquired the 330,000-square-foot Altius Centre from Canadian Property Holdings (Alberta) Inc. 

Bow Valley Square, which it acquired from Oxford Properties, encompasses approximately 1.4 million square feet of mixed-use office, retail and commercial space in four towers standing 17, 32, 37 and 39 storeys.

Calgary's office sector overview

Kris Hong, executive vice-president and partner with Barclay Street in Calgary, told RENX it's an opportune market for private companies to come in and invest.

"Office space got decimated in downtown Calgary the last 10 years through a combination of the energy sector and COVID. The institutional ownership is rebalancing their portfolios: 'We don't need to hold down these office assets'," Hong said. "Office is still a challenging product: you've got to put a lot of money in; there's maintenance costs. I think these institutional owners just need to rebalance their portfolio. They're selling off the assets that do not make sense holding on, continuing forward." 

"And obviously that creates an opportunity for private guys coming in on cents on the dollar . . . If investors have money and deep pockets, they're going to make a lot of money on these kinds of opportunities in this market, for sure. They want to buy from institutions for cents on the dollar. They're well sought-after landlords. They take care of their buildings, they've put millions on their buildings and they're selling them dirt cheap."

Hong said that in this type of market, everything is for sale for the right price, predicting that "transactions are not over yet."