Oxford Properties Group has acquired the Canada Pension Plan Investment Board’s 50% stake in a portfolio of high-quality downtown office buildings in Calgary and Vancouver for $730 million, the organizations announced Tuesday.

The acquisition gives Oxford total ownership of the assets. The transaction values the portfolio at approximately $1.5 billion.

The four-million-square-foot portfolio includes seven class AAA/A and trophy properties, with strong occupancy and long-term lease commitments across diverse sectors including finance, tech, legal, transportation, and natural resources. Five of the buildings were built or extensively renovated after 2010, and several are sustainability certified, including the Stack in Vancouver.

Built in 2023, the 568,000-sf tower is Canada’s first zero-carbon office building.

“Oxford has been a net seller of office for over a decade to achieve portfolio diversification,” said Tyler Seaman, Oxford’s executive vice-president for Canada. “We believe now is an opportune time to rotate capital back into this asset class, and this portfolio ticks all the right boxes.”

Daniel Fournier, Oxford’s executive chair, said the transaction reaffirms and reinforces Oxford’s strong desire to remain active in Canada’s troubled office sector.

That desire contrasts with the aims of CPPIB and other institutional investors, who have been divesting their holdings in the asset class.

“The transaction is a continuation of our real estate strategy to secure strong business-plan execution and redeploy capital into new opportunities, supporting the continued growth and performance optimization of our global real estate portfolio,” said Sophie van Oosterom, a managing director and head of real estate at CPPIB.

The Calgary buildings include:

• Eau Claire Tower: A 611,000-sf, 25-storey LEED Gold-certified tower built in 2016;
• Centennial Place: A 1.3 million-sf twin-tower complex built in 2010.
• 400 Third (Calgary): An 820,000-sf property constructed in 1988;

The other Vancouver assets are:

• Guinness Tower: A 262,000-sf building near the city’s downtown waterfront that was renovated; 262,000 sf.
• Marine Building: A historic 177,000 landmark, also situated near the downtown waterfront, that was renovated in 2014 and originally built in 1930; and,.
• MNP Tower: A 277,000-sf building constructed in 2014.

Oxford, the real estate arm of OMERS, continues to see strong demand for premium office space in key Canadian markets and remains partnered with CPPIB on other assets nationwide.

The deal comes after Bloomberg reported that Oxford and CPPIB had agreed to its terms.

Pictured: The Stack office tower in downtown Vancouver.

Image: Oxford Properties