H&R REIT (HR.UN-T) has an agreement to sell its 50 per cent stake in the Brian Canfield Centre office building in Burnaby to its investment partner Crestpoint Real Estate Investments Ltd. for $82.5 million.

The announcement was released Tuesday morning as part of a series of recent transactions by Toronto-based H&R. 

These include the close of another major transaction, its $232.5-million sale of 25 Dockside Dr., on the Toronto waterfront, to Halmont Properties and George Brown College. That sale had been announced in December.

The Brian Canfield Centre is a 671,555-square-foot office building located at 3777/3791 Kingsway in Burnaby. It is known affectionately as the “Telus Boot” building due to its distinctive sloping L-shape, which drops down to a podium level from the 22-storey tower.

Constructed in 1976, it has been anchored by Telus as its main tenant for many years.

H&R said its share of the building was valued at $81.4 million as of Dec. 31.

"Given the considerable headwinds in the public and private real estate markets, we are very pleased to have completed the sale of 25 Dockside Drive and agreed to sell our interest in the 3777/3791 Kingsway," Tom Hofstedter, H&R’s executive chairman and CEO, said in the announcement. "These office sales further our strategic repositioning plan and moves H&R REIT closer to achieving our portfolio simplification strategy goals.

“We continue to execute our plan with discipline by transacting when we can surface fair value for our unitholders."

Redevelopment planned at Burnaby property

The property is also the subject of a significant redevelopment and intensification plan. The mixed-use proposal includes four towers, though it does retain the existing 22-storey tower.

H&R has held an ownership interest in the property since 2006, when it acquired a 100 per cent interest for $150 million. It sold a 50 per cent share to a Crestpoint fund for $86.5 million in 2014.

The announcement also reported several small industrial property sales during Q1. H&R sold its 50 per cent interest in four non-core industrial properties for gross proceeds of  approximately  $17.2 million and sold two U.S. automotive-tenanted properties for US$7.7 million. 

H&R has also entered into agreements to sell its 50 per cent interests in one Canadian industrial property and one U.S. industrial property. 

Gross proceeds from the Canadian industrial property sale is expected to be $60.7 million, at H&R's ownership interest, and closing is expected to occur in Q3. 

Gross proceeds from the U.S. industrial sale is expected to be US$6.3 million and closing is expected to occur in Q2 2024.

Gross proceeds from properties sold or under agreement to be sold in 2024 total approximately $411.7  million.

H&R focuses on industrial, multifamily

H&R is in the midst of an extensive portfolio overhaul which began in 2021 when the trust announced it intends to focus on the multiresidential and industrial sectors.

It has already spun off many of its premium Canadian retail assets into Primaris REIT, sold hundreds of millions of office properties, and begun its plan to convert and/or redevelop a series of office properties which it held onto for this purpose.

H&R remains one of Canada's largest real estate investment trusts with total assets of approximately $10.8 billion as at Dec. 31. It has ownership interests in a North American portfolio comprising over 26.9 million square feet. 

H&R's strategy is to create a simplified, growth-oriented business focused on residential and industrial properties.It plans to continue selling its office and retail properties as market conditions permit to create value through redevelopment and greenfield development in prime locations within Toronto, Montreal, Vancouver, and high growth U.S. Sunbelt and gateway cities.