Morguard has acquired a 20% stake in the trophy-class Telus Garden office tower in downtown Vancouver, the company announced.

The vendor and purchase price were not disclosed. But TD Greystone and Forgestone Capital were known co-owners.

According to a published report citing a TD Greystone representative, the company has retained its 80% interest in the property, indicating that Forgestone sold the remaining 20% stake to Morguard. Forgestone has not commented on the deal.

The 24-storey Telus Garden is situated at 510 West Georgia Street between Richards and Seymour streets. The entrance is located on the southwest corner of West Georgia and Richards streets.

The property is near the Granville SkyTrain station, which is situated along the Expo line, and Vancouver Centre station. (The Expo line links downtown Vancouver with the city’s eastern area and suburbs. The Canada line traverses the downtown; Vancouver’s west side; some southern points along Cambie Street to Marine Drive; and areas of Richmond, B.C., including Vancouver International Airport.)

Built in 2016, Telus Garden houses major tenants, including Telus and Amazon, and is recognized for its modern design and sustainability features. Vancouver-based telecommunications giant Telus and Westbank developed the property but sold it in 2018 to what is now TD Greystone and Forgestone for $600 million, Avison Young reported.

The deal was the largest office sales transaction in Vancouver that year, according the to the full-service commercial real estate services firm. But Canada’s office market has experienced a significant downturn since then due to the effects of the COVID-19 pandemic, the growth of the hybrid-work movement, high interest rates, global economic conditions and other factors.

Vancouver’s downtown office sector is widely regarded as being quite stable compared to its Canadian major market counterparts. But sales of trophy-class assets continue to be rare in the post-pandemic era.

Meanwhile, development of top-tier Vancouver office product has virtually halted. Andrew Petrozzi, Newmark’s head of Canadian research, told Connect earlier this year that the city’s downtown office market could face a shortage of class A assets in the late 2020s due to a lack of projects in the development pipeline.

“We are thrilled to strengthen our presence in the heart of downtown Vancouver, one of Canada’s premier office investment markets with some of the lowest vacancy rates in North America,” said Angela Sahi, Morguard’s president and chief operating officer.

“This acquisition offers strong growth potential and aligns with our commitment to a more sustainable Morguard with the building’s thoughtful design and environmental features.”

Telus Garden spans 557,255 square feet, including 32,855 square feet of retail space. The building boasts LEED Platinum and BOMA Best Platinum certifications for its sustainability initiatives, including a district energy system and solar panels.

Morguard, which manages the property, sees it as a valuable addition to its office portfolio.

“The high-quality build and prime location of Telus Garden make it an appealing choice for top-tier tenants, particularly those in technology and professional services,” said Tom Johnston, the company’s senior vice-president of asset and property management for Western Canada.

“With its highly sought-after, investment-grade tenant base, the property offers stable and sustainable income growth for our office portfolio.”

Mississauga, Ont.-based Morguard is a leading North American real estate and property management company. The firm owns and manages assets valued at $17.6 billion, including a significant portfolio of office, retail, industrial, and residential properties across Canada.

Photo: CNW Group/Morguard