CBRE-Led Sale of 160 Elgin Street in Ottawa is Canada’s Biggest Office Deal of 2023
November 29, 2023 3 Minute Read
CBRE’s National Investment Team has won Real Estate Deal of the Year at the Best Ottawa Business Awards for its $277 million sale of 160 Elgin Street, Canada’s biggest office deal of 2023.
Nico Zentil (right) accepts the BOB Award.
NIT Toronto’s Peter Senst and Jaysen Smalley teamed with NIT Ottawa’s Nico Zentil on the sale of the 27-storey, 973,611 sq. ft. office building on behalf of H&R REIT to Groupe MACH, a private Canadian firm.
160 Elgin Street, built in 1970 but renovated by H&R in 2018 and LEED Gold-certified, is situated in the heart of Ottawa’s CBD, steps from Parliament Hill.
Zentil says the deal “demonstrates to the market that top quality, larger office assets are still desirable.”
It’s also further evidence of NIT’s prowess in selling high-profile Ottawa office towers.
Zentil, Senst and Smalley co-brokered the 2021 sale of Ottawa office complex Place de Ville, the second-largest commercial real estate transaction in Ottawa’s history. That deal earned a Best Ottawa Business Award in 2022.
CBRE also won a BOB Award in 2017 for sale of the Constitution Square complex, the biggest transaction in Ottawa commercial real estate history to this day.
CBRE Shows Strength
Smalley says the 160 Elgin deal “is evidence of CBRE’s ability to navigate a challenging market to identify the right buyer for this landmark asset.”
Ottawa’s downtown Class A office buildings in the third quarter of 2023 had a 11.1% vacancy rate, versus 14.2% vacancy for the overall downtown office market.
160 Elgin is 98% leased, with a blue chip roster of tenants that includes Bell Canada, Gowlings and the federal government.
“H&R positioned 160 Elgin to attract quality, investment-grade tenants through significant improvements” Smalley says.
H&R said the 160 Elgin sale is part of its strategic repositioning plan to become a “simplified, growth-oriented company focused on residential and industrial properties.”
“Given the considerable headwinds in the public and private real estate markets, we are very pleased to have executed this transaction,” H&R CEO Tom Hofstedter said in a release announcing the sale. “(It) moves H&R REIT closer to achieving our portfolio simplification strategy goals.”
MACH president Vincent Chiara noted his firm’s acquisition of 160 Elgin is “a perfect fit with our pan-Canadian expansion plan.”
MACH’s 40 million sq. ft. portfolio includes 240-plus properties, such as Montreal's Sun Life Building, 1000 De La Gauchetière, CIBC Tower, Place Victoria and KPMG Tower, and Quebec’s City’s Complexe Jules-Dallaire and Place de la Cité.
In recent months MACH has expanded into Ontario and the Maritimes.
“These markets offer exceptional acquisition opportunities, such as 160 Elgin, a strategically located high-value asset with quality tenants and long-term leases,” Chiara said.
“While many major real estate players remain on the sidelines,” the company noted in the deal announcement, “MACH continues to seize opportunities and is already on its ninth major acquisition since the beginning of the year.”
The prediction offered by CIBC World Markets’ Benjamin Tal during a one-on-one conversation with CBRE Canada President & CEO Jon Ramscar at CBRE’s Market Outlook Breakfast in Toronto on Feb. 26.
CBRE’s new Canada Real Estate Market Outlook forecasts that commercial real estate investment activity will recover in 2024 as credit conditions return to normal.
Morguard Corp. just closed on the sale of a portfolio of 14 hotel properties in Ontario and Halifax to InnVest Hotels and Manga Hotel Group for $410 million.
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