A 41-storey, multiresidential tower in downtown Calgary has sold for $83.4 million, the largest multifamily deal in the market during the past year.

Westview Heights, at 825 8th Avenue S.W., comprises 343 rental units, 55 of them recent conversions from office space. It also includes 6,000 square feet of main-floor commercial space.

It was an off-market transaction which was brokered by JLL Capital Markets. 

The property was purchased by Westbow Capital Fund II, which is part of the Westbow Group of Companies based in Chilliwack, B.C. It will be managed by in-house property manager Prokey Living, which was founded in 2019 and manages over 300 units in British Columbia, Alberta and Saskatchewan.

The vendor was Calgary-based Bentley Investments Ltd.

Westview Heights rebranded to District

The downtown building, which has been undergoing renovations, has been renamed to become District apartments.

Corey Kirzinger, chief operating officer at Westbow Capital who also heads up the company’s acquisitions, said the acquisition finally allows Westbow to break into the Calgary market - “some of the sacred space that we haven’t to date.”

“I think it’s really impactful being able to go through that lease-up, bringing a couple of hundred units into that kind of struggling market that exists today with very low availability and very low vacancy rates,” he said, noting the building had been largely unoccupied during the process.

The property is located on the west end of Calgary’s downtown core near the LRT line.

“We’re just in the process of finishing off renovations to the asset and looking at a variety of options for amenity space and then throughout this next probably year or so finishing off some exterior renovations as well,” he said, adding that work has been done on the parkade and some exterior refurbishments.

Christine Jamieson, marketing lead, Westbow Group of Companies, said that in any renovation the company does to a property it wants to make sure it focuses on making the building a safe, secure and long-term option for tenants within the area.

“We are currently leasing up. We are about 50 per cent currently leased,” she said. “Our goal is really to make sure that we get tenants in there who will thrive in the area.

"We’re seeing a lot of immigration to the area. We’re seeing a lot of students. So we’re really making sure that we cater to them as well.”

Lease-up returns new housing to downtown area

Kirzinger said the Calgary market is extremely interesting from an investment standpoint given how little rental inventory exists.

“It creates a bit of an affordability issue for those that aren’t lucky enough to purchase just yet,” he said. “We’re really excited because it’s been a building that hasn’t brought any rental inventory to the market in a couple of years . . .

"So it’s good to bring it back into that west end of downtown and help that community out and add some rental inventory. We’re pretty pumped.”

The tower was in the news in late December 2021 and early January 2022. According to a Calgary Herald story, hundreds of residents were forced out of their suites when pipes in the building burst in late December of 2021.

The building was left uninhabitable, with damage to the sprinkler and heating systems, as well as the elevators. The water that burst from the pipes eventually froze over in the frigid holiday weather, also damaging stairwells and common areas.

Calgary's population growing

Samuel Dean, senior vice-president, capital markets, JLL Canada, told RENX the transaction showcases how Alberta’s market continues to grow and evolve.

He said the building was appealing to an investor because of the ability to move all those vacant units right to market.

“The in-place rents at this building and other properties in the City of Calgary are below market. So they’re bringing in new tenants and they can move the suites immediately to market which is quite a bit higher than in-place rents,” said Dean.

“The suite mix we’re seeing here in the market is approximately 80 per cent (one-bedroom).

"We are seeing quite a bit of interest and demand moving into the smaller suites right now due to price point. So that’s definitely attractive."

He said continuing strong in-migration to Calgary means ongoing demand for housing.

"There wasn’t a lot of fear about leasing up the units in a quick pace," he noted. “We are seeing rents moving up very quickly.

"It comes down to population growth and I think what we’re starting to see actually is the transformation of the business landscape where the energy sector is still a major driver, a huge driver for Calgary, but there’s more excitement or growth in the financial, insurance, professional, scientific and tech. That story is being told and we’re seeing more of it actually coming to fruition.

"I think a lot of people were nervous about there perhaps being too much supply downtown or in the Beltline but I think we’re going to start to see supply constraints with just the population growth.”

Multiresidential transactions in Calgary area

According to The Network (Real Estate Intelligence), the sale price of the Westview Heights property was $243,149 per unit.

In its most recent Calgary market mid-year report, The Network said investment in multiresidential properties jumped significantly during the second quarter of 2023, with 15 additional transactions closing.

These totalled just under $158 million and brought investment to more than $271 million over 27 total sales at the mid-point of the year, surpassing the multi-year peak last set in 2021.

The report said the largest transactions in the first part of the year were Wyldewood Estates, purchased by Avenue Living for $58 million ($176,000 per suite) and Sage Hill Retirement Residence, purchased by Yarrow II GP Inc., for approximately $56 million ($310,000 per suite).