Harrison Street buys medical office building in Calgary

IMAGE: The South Calgary Health Centre. (Google Maps)

The South Calgary Health Centre. (Google Maps)

Harrison Street says demographics drove the decision to acquire its 11th Canadian property and also its first medical office building in the country.

The investment management firm, which is exclusively focused on alternative real assets, acquired the 125,000-square-foot South Calgary Health Centre from Nicola Wealth Real Estate for an undisclosed price this month.

“The Canadian market shows the same underlying demographics that we’ve seen in other markets, which is Canadian health care spending is outpacing population growth,” Harrison Street managing director and head of Canadian transactions and business development Jonathan Turnbull told RENX.

“That’s driving this fundamental level of demand for quality product and buildings that can provide essential care services for an aging population.”

Turnbull said Canadian health care spending has grown by almost four per cent annually over the past three years versus population growth of closer to one per cent.

The federal government is projecting health care spending to increase by 24 per cent over the next five years.

“More and more money is going to be spent in the health care sector,” said Turnbull. “Having high-quality assets in that sector that are purpose-built to service the needs and demands of the broad demographic community is going to create a strong underlying demand for these types of properties which will support our long-term value in buying these types of assets.”

South Calgary Health Centre

South Calgary Health Centre was purpose-built as a medical office facility in 2003 and is located in the Sundance Place Business Park alongside other class-A offices and medical office buildings.

South Calgary Health Centre is leased and anchored by Alberta Health Services (AHS), the largest integrated provincial health care system in Canada.

AHS occupies more than 90 per cent of the property and provides a variety of services, including the operation of a diagnostic testing laboratory and one of two urgent care centres in Calgary.

A private physician practice supported by AHS and an Alberta-regulated entity not related to the medical field are also located in the building.

Medical office building activity

Harrison Street is headquartered in Chicago, with offices in London, Toronto, San Francisco and Washington, D.C.

It has more than 220 employees, a global institutional investor base and approximately $50 billion in assets under management.

Harrison Street is one of the most active and experienced real estate investors in the medical office sector. Since inception in 2005, it has invested in 339 medical office properties globally at a cost of approximately $7.9 billion.

Turnbull anticipates more Canadian medical office building acquisitions in the near term.

Harrison Street’s acquisition is the second major Canadian medical office building transaction this month.

Appelt Properties Inc. and Centurion Asset Management recently acquired a health care portfolio comprised of seven buildings totalling 280,000 square feet in Ontario and two buildings totalling 77,000 square feet in Alberta from Invesque Inc. for $94.3 million.

Recent Harrison Street Canadian acquisitions

The South Calgary Health Centre acquisition marks the 11th property investment by Harrison Street’s Canada Alternative Real Estate Fund, which has closed on investments valued in excess of $700 million during the past nine months and is on pace for $1 billion in acquisitions for the year.

The core-plus fund targets investments in senior living, student housing, medical office, life sciences, storage and digital assets throughout Canada. It seeks stabilized, cash-flow-producing assets and can invest up to 35 per cent of its equity in value-add strategies.

Harrison Street made four acquisitions earlier this summer.

It acquired a 50 per cent stake in the 125-unit Pearl & Pine independent senior living community in Burlington, Ont. from third-party investors. Reichmann Seniors Housing retained its 50 per cent stake in the property and its Signature Retirement Living operating arm continues to manage the property.

Harrison Street purchased two senior housing properties in St. Catharines, Ont.: Royal Henley and The Rennie. They’re also managed by Signature Retirement Living.

“The Niagara Region is a very important retirement community and this is the premier player in that market,” said Turnbull.

Harrison Street also acquired controlling interest in a new boutique student housing property in Ottawa on Besserer Street, three blocks from the University of Ottawa.

“We’re excited about the properties we’ve been able to acquire and the partnerships we’ve been able to forge with some great operating partners,” said Turnbull.



Steve is a veteran writer, reporter, editor and communications specialist whose work has appeared in a wide variety of print and online outlets. He’s the author of the book Hot…

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Steve is a veteran writer, reporter, editor and communications specialist whose work has appeared in a wide variety of print and online outlets. He’s the author of the book Hot…

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