Oak Street buys Calgary’s Western Canadian Place for $475M

IMAGE: Western Canadian Place in Calgary. (Courtesy CBRE)

Western Canadian Place in Calgary. (Courtesy CBRE)

Western Canadian Place, a major Calgary downtown office complex comprising two towers and over one million square feet of space, has been sold for $475 million, RENX has learned.

BCIMC and its real estate arm QuadReal sold the property in an off-market deal to Oak Street Real Estate Capital which earlier this year purchased the iconic Bow Tower in Calgary’s core for $1.216 billion along with partner Deutsche Bank.

Duncan MacLean, senior vice-president of CBRE, which represented the vendor, said Western Canadian Place was an attractive property because of an existing lease with energy giant Husky.

“Husky has occupancy of 85 per cent of the complex and that goes until 2033. So you’ve 12 years of term with Husky,” he said.

“From the eyes of the purchaser they’re 100 per cent occupied. The lease is in place. Oak Street are investing for the same reasons why they invested in The Bow, they’ve got 100 per cent income and clearly the income is for the term of the leases.”

Western Canadian Place

The office complex is located in the west end of Calgary’s central business district at 700 9th Avenue S.W. It includes a 40-storey and a 31-storey tower on 1.5 acres. Total square footage is 1.06 million square feet.

It was built in 1983.

The class-A office complex offers excellent connectivity to the city’s core with multiple Plus 15 connections. Tenant amenities include an 18,000-square-foot fitness facility, a building cafeteria and a conference centre. It has a superior parking ratio of one stall per 2,100 square feet and it’s located within a short walking distance of the LRT station.

It also has a BOMA BEST Level 3 certification.

MacLean said the major deal signifies renewed interest in the future of Calgary’s downtown core.

“If you look at it from the perspective of a year ago, there was nobody making these types of bets in our office market. There were buildings that were available but they weren’t being purchased,” he said.

Calgary office transactions at $1.7 billion

According to CBRE data, in 2021 there have been five downtown office transactions for a total value of $1.7 billion. In 2020, there were two sales for $34.2 million and in 2019 there was only one sale for $10.7 million.

“I would say there’s renewed optimism for the downtown office market,” said MacLean.

The sales this year include:

  1. Western Canadian Place (801 6th Street SW) – $474,972,365.
  2. The Bow (500 Centre Street SE) – $1,216,000,000.
  3. Balboa Stephen Avenue Portfolio (116 8th Avenue SE, 100 8th Avenue SE & 121 8th Avenue SW) – $6,000,000.
  4. Calfrac Building (411 8th Avenue SW) – $5,500,000.
  5. Confidential transaction – $16,800,000.

Calgary’s downtown office market has an inventory of 43.2 million square feet. Currently 14.2 million square feet are vacant with negative absorption of 1.6 million square feet this year through the end of Q3, according to a CBRE market report.

The report said the downtown office market recorded 80,000 square feet of negative absorption in Q3 as the vacancy rate increased 20 basis points to 32.9 per cent.

Difficult times in Calgary office market

“Over this same time period, nearly 2.5 million square feet has been returned to the market. Despite a relatively flat quarter, it is important to note that the amount of available headlease product increased approximately 230,000 square feet quarter-over-quarter, putting further pressure on landlords,” the report states.

“In Calgary’s downtown core, there is currently over 10.6 million square feet of space available on the headlease market. Further, this number has increased by 1.9 million square feet since the start of COVID-19 at the end of Q1 2020.

“On a positive note, the flight-to-quality trend remains prominent in Calgary’s downtown core as class-AA product continues to outperform the remainder of the market. Consequently, vacancy in the class-AA market is 19.5 per cent while the class-A, -B, and -C markets sit at 38.1 per cent, 45.2 per cent and 42.4 per cent, respectively.”

The report said merger and acquisition activity has played a major role in the significant amount of space returned to the market over the course of 2021, specifically from the energy industry.

“Year-to-date, energy M&A transactions have resulted in the net fallout of nearly 1.1 million square feet. Most notably, the merger between Husky and Cenovus alone resulted in 650,000 square feet of negative absorption,” CBRE explains in the report.

“Other examples included Secure Energy Services and Tervita combining for a loss of 43,000 square feet, Whitecap Resources acquiring Torc Oil & Gas resulted in 70,000 square feet coming back to market, and WSP’s acquisition of Golder for 60,000 square feet.

“While WTI (West Texas Intermediate) oil prices have rallied over the past six months, at times reaching the highest levels seen since 2015, hiring growth has not followed suit as energy companies have learned how to work efficiently by way of advanced technology.”



Mario Toneguzzi, based in Calgary has 37 years of experience as a daily newspaper writer, columnist and editor. He worked for 35 years at the Calgary Herald covering sports, crime,…

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Mario Toneguzzi, based in Calgary has 37 years of experience as a daily newspaper writer, columnist and editor. He worked for 35 years at the Calgary Herald covering sports, crime,…

Read more



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