A Toronto-based real estate investment firm has acquired a Vancouver Class A office building for approximately $225 million – or more than $1,000 per square foot.
The office and retail property at 800 Burrard Street was purchased by Crestpoint Real Estate Investment. The firm also acquired a 53 per cent stake in a similar Montreal office property, at a value of $300 per square foot.
"The difference is liquidity. In downtown Vancouver, there is a limited supply of land, and it's very attractive to foreign capital. There will always be an exit price if the market goes south. Right now the market in Montreal is great, but sometimes you can't sell a building," said Kevin Leon, Crestpoint president, commenting on the price discrepancy between the two markets.
The Vancouver property is a 19-story building, with five ground level retail units. Canadian retailer Lululemon anchors the retail units, while the office space is fully leased by the federal government.
The site’s capitalization rate is placed at 4.25 per cent, mostly on par with the projected cap rate for office product in Vancouver – between 3.75 to four per cent.
"Some people say the cap rate is low, some people think we got a pretty good deal," said Leon. "This is probably one of the most prime retail corners in downtown Vancouver."
Oxford Properties and CPP Investment Board previously owned the property.
