Commercial Real Estate News

[rocketphish]

Morguard sells CBC headquarters building at 181 Queen St. to PSPC for $125.3M

David Sali, OBJ
March 7, 2024 3:34 PM ET



The building that houses CBC headquarters has been sold to the federal public works department for $125.3 million in one of the biggest commercial real estate transactions in Ottawa history.

Southern Ontario-based developer and property manager Morguard had owned the 11-storey, 275,000-square-foot office building at 181 Queen St. since it opened in 2004.

The company said Thursday that Public Services and Procurement Canada exercised its option under the terms of its lease agreement to purchase the building at fair market value. Morguard said it plans to use part of the proceeds to repay a mortgage worth $57.7 million.

Morguard and PSPC officials did not immediately respond to requests for comment on Thursday afternoon.

Located between Bank and O’Connor streets, 181 Queen St. is home to CBC’s Ottawa production centre, which includes studios that broadcast CBC and Radio-Canada programming in the National Capital Region.

CBC occupies the first four floors of the building. PSPC leases the remainder of the space for the information services directorate of the House of Commons.

PSPC owns more than 40 million square feet of real estate in the National Capital Region. Its decision to acquire 181 Queen St. comes less than a year after the department announced it was looking to sell a number of aging properties in the city.

PSPC released its disposal list of 10 Ottawa buildings last spring. The list includes notable properties such as the L’Esplanade Laurier complex and the CBC’s former headquarters at 1500 Bronson Ave.

A department spokesperson told OBJ last May the decision to put the buildings on the block was part of its “long-term real estate portfolio plan to optimize the office space under our responsibility, lower operating costs and reduce greenhouse gas emissions.”

Meanwhile, Morguard remains one of the capital’s largest office owners and managers with a portfolio of more than 3.3 million square feet. Its Ottawa holdings include two other buildings at 131 and 155 Queen St., as well as Performance Court at 150 Elgin St., where Shopify was headquartered until it vacated the building in 2020.

The 181 Queen St. transaction marks the second time in the last two months that Morguard has trimmed its Ottawa asset book.

In January, the company announced it was selling the 115-room Holiday Inn Express & Suites Ottawa West on Robertson Road as part of a $410-million deal to divest 14 hotel properties across Canada.

Morguard’s most recent local acquisitions include a $28.1-million deal in December 2022 to buy a 50 per cent stake in an office building at 215 Slater St. and its $64.5-million purchase of software-maker Kinaxis’s new 163,000-square-foot head office on Palladium Drive in Kanata in the summer of 2022.

About 2.5 million square feet of Morguard’s office portfolio is located in the downtown core, and the federal government is its largest tenant.

Empty office space in the downtown core continues to be a sore spot for landlords as the feds and other employers increasingly embrace hybrid work. Last week, CBRE said it expects Ottawa’s downtown office vacancy rate to hit a new high of 15 per cent later this year before the market stabilizes.

Despite the uncertainty swirling around the office sector, then-Morguard senior vice-president Tullio Capulli told OBJ in August 2022 he remained confident that office space in the nation’s capital – particularly in the downtown core – would continue to be a solid investment for decades to come.

“It might take a few years, but I am bullish on the office,” Capulli said. “Most companies are going to try the hybrid (approach) and everything else, but not everybody can work from home. I’m not sure it’s going to work.”

https://obj.ca/morguard-sells-cbc-he...rs-for-125-3m/

[DTcrawler]

Another building that will be left to fall into disrepair under gov ownership…

[J.OT13]

Hoping Morguard can use some of this cash to kick start a St Laurent redevelopment.

[J.OT13]

Federal government approves purchase of key Ottawa property from friend of prime minister

By Glen McGregor

Posted June 7, 2024 10:29 am. Last Updated June 8, 2024 7:24 am.

The Trudeau government has approved a decision by the National Capital Commission to buy a key piece of real estate in downtown Ottawa that is partially owned by a close friend of the prime minister.

On May 24, the Privy Council Office published an order-in-council approving the NCC’s plan to purchase the building at the corner of Sparks Street and O’Connor Street, a block from Parliament Hill.

The property is currently registered to 148-152 Sparks St., an Ontario corporation partly owned by Tom Pitfield, a long-time friend of Justin Trudeau.

The Prime Minister’s Office referred questions about the purchase to a spokesperson for Public Services and Procurement Canada, which said Trudeau was not involved in the cabinet approval of the deal.


“This Order-in-Council was submitted to the Governor in Council via the Treasury Board process and was approved,” said PSPC spokesman Guillaume Bertrand in an emailed statement.

“An acquisition of this type requires Treasury Board approval only – it does not involve the approval of the Prime Minister or at a meeting of the full Cabinet.”

In an email, Pitfield confirmed he has an ownership position in the company but said he had not discussed the sale of the property with the prime minister or anyone else in cabinet.

“With respect to the office space that you reference, I have had a partial / minority stake in its ownership for more than 10 years now — and did not have any such conversations about the NCC’s decision with the officials that you mention,” he wrote.

Pitfield is listed on mortgage documents on the property, along with Ottawa lawyer Gordon Cudney, the company’s sole director, according to incorporation records.

The company purchased the property on Sparks St. in 2014 from Ages Holdings Ltd. and Murray Macy Enterprises Ltd. for $4.8 million.

It includes a three-storey office building, retail space and a ground-floor restaurant. Canada2020, a think-tank with ties to the federal Liberals that Pitfield co-founded, has offices in the building

The NCC says the deal has not been finalized and did not say how much it will pay for the property.

“This property is in a prominent location along the Sparks Street pedestrian mall and in close proximity to the parliamentary precinct, enabling the NCC to advance its priorities in planning, developing, and improving the [National Capital Region] in alignment with its mandate,” NCC spokesperson Dominique Huras said in an email.

Pitfield is the son of the late Michael Pitfield, who served as the Clerk of the Privy Council when Trudeau’s father was prime minister. He is married to Montreal Liberal MP Anna Gainey, a past president of the Liberal Party of Canada.

The couple travelled with Trudeau and his family on holiday in Bahamas in 2016. The ethics commissioner found Trudeau had breached the federal ethics law on the trip by accepting a helicopter ride to the Aga Khan’s private island.

Pitfield’s relationship with the prime minister featured in a 2021 complaint to the federal ethics commissioner by Conservative MP Michael Barrett over contracts with Pitfield’s data analytics company, Data Sciences.

Barrett noted that many Liberal MPs had used their parliamentary office budgets to pay Data Sciences for software used to manage contacts with constituents. The ethics commissioner, Mario Dion, later dismissed the complaint, saying he had no reason to believe Trudeau had acted to further Pitfield’s private interests.

Pitfield was chief digital strategist for Trudeau’s leadership bid in 2013 and did similar work on the Liberals’ election campaigns.

https://toronto.citynews.ca/2024/06/...rime-minister/

[c_speed3108]

Another complex in receivership....

Ottawa Train Yards placed in receivership over owner's unpaid $39 million loan


Josh Pringle
CTV News Ottawa Producer and Digital Lead

Updated June 26, 2024 2:33 p.m. EDT
Published June 26, 2024 1:24 p.m. EDT

One of Ottawa's largest shopping centres has been placed in receivership over an outstanding $39 million loan by the owner of the property, but it's business as usual for stores at Ottawa Train Yards.

The Ontario Superior Court of Justice appointed Grant Thornton Limited as receiver and manager of the assets of Ottawa Train Yards on Industrial Avenue.


Court documents on the Grant Thornton Limited website show Manulife (The Manufacturers Life Insurance Company) filed an application for Grant Thornton Limited to be appointed the receiver of all assets after the owner failed to make payment on an outstanding loan.

141 Ontario is the owner of a portion of the Ottawa Train Yards shopping district, which has over 150 shops and services. Over the years, there have been several empty storefronts at Ottawa Train Yards, but stores remain open for business this week.

Manulife extended a $45.5 million loan to 141 Ontario. According to the court documents, the loan matured and was due on Feb. 1, 2024, but 141 Ontario failed to repay the loan upon maturity. As of March 21, 2024, $39.4 million remains outstanding under the loan.

"141 Ontario has largely been non-responsive to Manulife’s repeated communications regarding the obligation to repay the Loan, both before and after the maturity date," says the documents. "141 Ontario has not engaged in any constructive communication with Manulife regarding its obligation to repay the Loan."

Manulife advised 141 Ontario in writing last August and November that it would not offer a renewal of the loan upon its maturity.

The documents show Manulife is 141 Ontario's major secured creditor.

"Manulife has lost confidence in 141 Ontario's willingness and ability to effectively manage, preserve and protect the Property, which constitutes Manulife's primary collateral for its very substantial Loan," says the court filing.

Grant Thornton was granted the Receivership Order on June 19.

According to Grant Thornton, it commenced "safeguarding and taking control of the real property" of 141 Ontario when the Receivership Order was issued.

"The Receiver has not been provided with any of the Companies’ books and records," the letter says.

"As such, the Receiver does not have the net book value of the Company’s assets, or a complete list of creditors. The Receiver continues to pursue the recovery of the Company’s books and records from 141 Ontario and Controlex Corporation."

Grant Thornton says there are two creditors who have registrations against the company and/or the land – Manulife and Bank of Montreal.

The Ontario Superior Court of Justice ruling to appoint a receiver states Grant Thornton is empowered and authorize to manage, operate and carry on the business of the debtor.

This is a developing story. CTV News Ottawa will have the latest as it becomes available

[J.OT13]

Hoping this is an indication that big box centres are no longer financially viable.

[rdaner]

It looks like this is near the VIA/lrt station. Would this be a candidate to be redeveloped as residential?

[SL123]

Originally Posted by rdaner

It looks like this is near the VIA/lrt station. Would this be a candidate to be redeveloped as residential?

At a Bird eye view it looks close but in reality its extremely poorly connected to the station and I have very little faith in the city investing in a solution or Via Rail agreeing to be a partner in this.

[lrt's friend]

Originally Posted by J.OT13

Hoping this is an indication that big box centres are no longer financially viable.

What is viable in retail these days other than Amazon?

[Marcus CLS]

Originally Posted by rdaner

It looks like this is near the VIA/lrt station. Would this be a candidate to be redeveloped as residential?

Check out Downtown forum page 6 thread 200, 230 260 Steamline St. 6 x 10-30 FL.

This has now disappeared from devapps was by Controlex. Sorry I do not know how to paste links.

[rocketphish]

Originally Posted by Marcus CLS

Check out Downtown forum page 6 thread 200, 230 260 Steamline St. 6 x 10-30 FL.

This has now disappeared from devapps was by Controlex. Sorry I do not know how to paste links.

https://skyscraperpage.com/forum/sho...d.php?t=227196

[rocketphish]

‘No weakness’ in Ottawa Train Yards’ tenants or location, veteran retail broker says

David Sali, OBJ
June 27, 2024 3:18 PM ET

The Ottawa Train Yards remains a “fantastic” site for retailers even as part of the shopping complex has been placed in receivership, a leading real estate broker says.

“It’s got a great tenant mix,” Jamie Boyce, a senior vice-president in CBRE’s Ottawa office who specializes in retail leasing, told OBJ on Thursday.

“I’m not sure what’s happened behind the scenes, but I would say that whatever is ongoing is an anomaly. I see no weakness in that particular roster of tenants and location.”

The Ontario Superior Court of Justice last week appointed Grant Thornton Limited as receiver and manager of the assets of a portion of the Ottawa Train Yards, which is located on Industrial Avenue west of St. Laurent Boulevard.

According to legal documents on the Grant Thornton Limited website, The Manufacturers Life Insurance Company (Manulife) filed an application for Grant Thornton to be appointed the receiver of all assets after the owner of a portion of the shopping complex failed to make payment on an outstanding loan.

141 Ontario is the owner of a 23.2-acre commercial site on the north side of Industrial Avenue. According to the court documents, Manulife extended a $45.5-million loan to 141 Ontario in December 2018 that matured and became payable on Feb. 1, 2024.

However, 141 Ontario failed to repay the loan upon maturity and, as of March 21, 2024, $39.5 million remained outstanding. The loan continues to accrue interest at the rate of $3,651 per day, the documents showed.

With more than 750,000 square feet of retail space, the Ottawa Train Yards is one of the city’s largest shopping malls. The complex is home to more than 150 retailers, services and restaurants.

But a number of the mall’s former tenants have closed up shop in the past couple of years, including fashion retailer Nordstrom Rack, housewares chain Bed Bath & Beyond and children’s furniture store buybuy Baby. Those spaces remain vacant.

Still, Boyce says the Train Yards’ tenant roster is “very solid” despite the exodus of some big-name retailers, adding the mall “remains a highly desirable location geographically and comparatively” to other similar shopping complexes in Ottawa.

“I know there are tenants that are interested in being there for sure,” he said.

Analysts say the Ottawa retail market remains healthy as available real estate continues to be hard to find and sales keep rising.

A report earlier this year from brokerage firm Marcus & Millichap said Ottawa’s retail vacancy rate hit an all-time low in 2023. The firm predicted the rate will fall another tenth of a percentage point to about 1.5 per cent this year, “making Ottawa one of the tightest retail markets in 2024.”

While some industry observers are forecasting a slowdown in overall retail sales growth this year, Boyce said Ottawa is “still undersupplied” when it comes to large, outdoor suburban shopping complexes.

Often referred to as “power centres,” such properties in the National Capital Region include Barrhaven’s Chapman Mills Marketplace, Nepean’s College Square mall and Kanata Centrum Shopping Centre.

“Those are all landmark retail locations that Train Yards would compare with,” Boyce explained, adding “those properties are very, very well occupied with very little vacancy.”

A lack of new construction has magnified the problem as developers put major developments on hold when the Bank of Canada hiked interest rates in an effort to smother inflation, analysts say.

Just 90,000 square feet of new space was added to Ottawa’s retail inventory last year, according to CBRE, and the firm is projecting no new developments to come online before the end of 2024.

Boyce said the lack of new retail builds in Ottawa “is consistent with major markets across Canada.”

But construction activity could start to pick up again if the Bank of Canada follows up its recent rate cut with more reductions over the next 12 to 24 months, he added.

“It’s just very expensive to build,” Boyce said. “For a developer or retailer to build and occupy, they need to have an exceptional sales (forecast).”

https://obj.ca/no-weakness-in-train-...n-broker-says/

[kwoldtimer]

No weakness, just an unpaid debt of $39million. Ya gotta love the real estate shills.

[Davis137]

Pretty much all of the former retailers mentioned in that article, are gone because the companies themselves are in Chapter 11, or are headed in that direction.

Additionally, traditional retail businesses (brick and mortar retail outlets) are being replaced by online and pop-up style ones more and more. The online retail realm is also constantly being challenged by newcomers such as Shein and Temu...