Vancouver could see first billion-dollar office sale

Bentall Centre in the city’s downtown business core expected to set historic price

Bentall Centre complex could mark Vancouver’s first billion-dollar-plus commercial real estate sale. Credit: Bentall Centre

Vancouver could see its first billion-dollar real estate sale in 2016 as purchases of trophy properties push sales volume to a historic peak.

The expected sale of the Bentall Centre office portfolio and the Royal Centre office and retail tower this year “will push overall dollar volume to previously unseen levels,” according to Avison Young.

“Both assets will very likely set new benchmarks and may produce the first billion-dollar-plus commercial real estate transactions in Vancouver’s history,” Avison Young said in a recent 2016 forecast.

The current record price for a Canadian office tower is the $1.27 billion paid for Toronto’s 68-storey Bank of Nova Scotia tower in 2012.

The Bentall Centre comprises four office towers in downtown Vancouver. Its majority owner, Montreal-based Ivanhoé Cambridge Inc., put it up for sale last year.

The four buildings range from 21 to 35 storeys and together contain 1.5 million square feet of office space and 53,000 square feet of retail.

The offering is expected to attract local and “global institutional investors,” according to a statement from Arthur Lloyd, Ivanhoé Cambridge executive vice-president of office for North America.

Michael Gill, principal in the Avison Young capital markets division, said he would not be surprised if Asian-based offshore investors were among those attracted to the Bentall Centre offering.

The Bentall 5 building was sold in 2012 for $400 million, or $686 per square foot, to a group of Canadian pension funds.

At that per-square-foot price, Bentall Centre would be worth north of $1 billion, though most analysts believe it will sell for more.

Bids closed in December for Royal Centre at the corner of Burrard and West Georgia streets, but no sale information has been released.

Brookfield Office Properties’ sole asset in Vancouver covers 589,000 square feet, including a 37-storey office tower and 91,000 square feet of retail space.

The property is assessed at $287.5 million but is thought to have fetched a higher price.