Oxford Properties has sold a 1.4-million-square-foot office and retail complex — comprised of the TD Tower, Oxford Tower, Centre Point Place and the Edmonton City Centre (ECC) mall — to a four-member group of investors.
The portfolio, collectively known as Edmonton City Centre, has been acquired by: LaSalle Investment Management’s LaSalle Canada Property Fund (LCPF); Frankfurt-based fund-servicing company Universal-Investment on behalf of Bayerische Versorgungskammer (BVK); and two managing owners, North American Development Group (NADG) and Canderel.
“This acquisition aligns well with LCPF’s objective to provide investors with immediate exposure to a diverse and mature portfolio of assets focused in Canada’s six major markets,” La Salle Canada chief executive officer John McKinlay said in a release. “We are pleased with the strong relative performance of the fund and the sustained interest from multinational investment partners.”
Financial details were not disclosed, though BNN Bloomberg reported in March the ECC could be worth more than $300 million.
NADG entities, including CentreCorp Management, will provide property management services and leasing for the retail component. Canderel entities, including Humford Management, will provide property management services and leasing for the office and non-retail components.
Mortgage origination sourcing and placement for the acquisition was provided by an entity related to Forgestone Capital.
Edmonton City Centre components
The properties are complemented by four parking components with 2,500 stalls, on a site spanning three city blocks in Edmonton’s financial core.
No representatives from any of the involved parties in the transaction could immediately be contacted for comment by RENX.
Oxford, the real estate unit of Ontario pension fund OMERS, built the four-storey ECC shopping centre — which also includes the Centre Point Place office conversion space — in 1974. The total retail floor area is more than 800,000 square feet.
The ECC mall underwent $41.3 million in upgrades from 2015 to 2017. The bottom level was converted into parking, adding 300 stalls.
The top floor on the east side of the complex became a 500-seat food court with space for 11 vendors. The retail and parking portions of ECC are connected by a pedway.
The 23-storey Oxford Tower was also completed in 1974. The 29-storey TD Tower, which encompasses more than 330,000 square feet, was completed in 1976.
The March BNN Bloomberg article reported the two towers had a vacancy rate of less than five per cent, well under the office vacancy rate for the Edmonton market.
Edmonton City Centre selling points
“This transaction is emblematic of our ability to source world-class properties with industry-leading partners,” LaSalle Canada senior vice-president of acquisitions Michael Cornelissen said in the media release.
“We see tremendous potential in the ECC acquisition given the growth momentum of the adjacent ICE District, light rail transit connections that are supporting continued urban gentrification and population growth.”
Edmonton’s core has grown from a residential population of 10,000 in 2008 to approximately 15,000 in 2019 and is projected to reach 18,000 by 2020, driven by ongoing developments such as ICE District.
An increase in residential condominium and rental development has been driven by inbound urban migration, with 1,600 units recently completed, 1,400 under construction and an additional 3,100 proposed in proximity to ECC.
Edmonton City Centre investment group
LaSalle has executed more than $6 billion in Canadian real estate deals since 2000 and has $1.9 billion in assets under management. The LCPF was launched in 2017 to provide investors with exposure to a portfolio of office, industrial, mixed-use, retail and multifamily assets.
On a global basis, Chicago-headquartered LaSalle managed approximately $68 billion worth of assets in private and public real estate property and debt investments as of the second quarter of 2019. Its client base includes public and private pension funds, insurance companies, governments, corporations, endowments and private individuals.
BVK has $101 billion worth of assets under management. Universal-Investment is the largest independent investment company in the German-speaking region. It has fund assets of around $688 billion under administration.
Toronto-headquartered NADG was founded in 1977 and has been active in the development, acquisition, redevelopment and management of more than 250 shopping centres as well as multifamily and mixed-use developments. The company owns more than 25 million square feet of retail gross leasable area in Canada and the U.S., with an additional three million square feet in development or predevelopment.
Montreal-headquartered Canderel is a real estate development and management firm with more than $15 billion in acquisitions, development and management projects during the past 45 years across Canada.
This translates into more than 60 million square feet of owned, managed and developed properties in the office, industrial, mixed-use and retail sectors.