A Winnipeg-based real estate investment trust (REIT) that once owned a score of Calgary office buildings is now put the last six of them on the market.
Artis Real Estate Investment Trust said it is part of company strategy of divesting in Calgary’s office market, which began five years ago, to concentrate on other real estate sectors and assets.
At its peak in mid to late 2016, Artis (AX-UN-T) owned in excess of 2.5 million square feet of office property in Calgary across approximately 20 properties.
“Artis pursued a significant portfolio shift away from Calgary office to prioritize capital allocation to higher-growth strategies, particularly emphasizing the U.S.A. industrial development program,” Corey Colville, head of strategy, real estate, at Artis, told the Real Estate News Exchange.
The Calgary portfolio covers about 700,000 square feet and includes:
– Canadian Centre, 156,772 square feet;
– 417 14th Street building, 17,517 square feet;
– Alex Building, 61,847 square feet;
– Campana Place, 49,123 square feet;
– Heritage Square, 315,152 square feet;
– and Hillhurst Building, 63,394 square feet.
Colville said the present occupancy of the Calgary office portfolio is about 70 per cent.
Calgary’s office vacancy rate has hovered around the 30 per cent mark for some time.
“You know, we’re not quite as pessimistic as some of the news headlines would indicate. Naturally, and quite obviously, there’s been a struggle in the market, but we are confident that Calgary is one of the most important cities in Canada and that Canada is a phenomenal country to invest in,” said Colville.
At the end of Q2 2021, Artis had 133 Canadian properties with about 10.4 million square feet and 70 U.S. properties with about 11.6 million square feet for an overall total of 203 properties and 22 million square feet.
The REIT’s portfolio at the end of the second quarter was 42.7 per cent office, 38.2 per cent industrial and 19.1 per cent retail.
Its overall occupancy was 92.3 per cent in Canada; 97.7 per cent for industrial, 83.3 per cent in office and 90.8 per cent in retail. In the U.S., its overall occupancy was 91.8 per cent comprising 94.3 per cent for industrial and 87.4 per cent for office.
Colville said the third quarter will feature a further and material shift of the portfolio following the sale of 27 of 28 of its Greater Toronto Area industrial properties. The 28th property is also for sale.