R2 Capital has acquired a landmark 160,000-square-foot office building in uptown St. John, N.B., at a heavily discounted price.

The company said it bought the building located a 400 Main Street, for a price of $17.50 per square foot—significantly below replacement cost—that works out to a total cost of $2.8 million.

Brunswick Realty’s online listing of the property shows that it was originally listed for $6.2 million and the asking price was later dropped to $3.1 million.

Montreal-based Nobel REIT previously owned the building which, according to Brunswick, was on the market for more than a year.

“Originally, there was significant interest in converting the building into a residential development,” said Brunswick in an August 2024 news release. “However, after discussions with several developers and industry experts, it was determined that the conversion would be far more challenging and costly than initially anticipated.

“This conclusion aligns with a broader trend across Canada, where the conversion of vacant office buildings into residential spaces is proving to be a cost-prohibitive endeavor due to the substantial retrofitting required.”

Nobel and Brunswick concluded that the highest and best use would be to demolish the existing structure and place a brand new multi-residential high-rise development on the 3.2-acre site.

 “Although further investigation is required, we picture three apartment towers to be built in phases” commented Stephanie Turner, senior advisor at Brunswick Brokers, said in the news release.

But Redondo Beach, Calif.-based R2 Capital indicated that it plans to maintain the original use, noting that the acquisition underscores the company’s confidence in the potential of the city’s office market.

The company plans to offer leasing opportunities at rates well below market value, creating cost-effective options for local businesses. Early tenants will benefit from promotional offers and cost savings, along with a first-mover advantage as R2 Capital invests in upgrades to transform the property, known as Place 400, into a premier office destination, according to a news release.

Place 400 boasts several amenities include fully furnished move-in ready offices; access to major transit routes and fully equipped spaces that include full kitchens.

R2 Capital said its vision for Place 400 is to deliver affordability and functionality as businesses adapt to increasing demand for in-person office spaces. The property’s central location and competitive leasing rates offer companies the opportunity to establish themselves in one of Saint John’s most accessible and well-equipped office buildings, the company added.

Early tenants will enjoy promotional leasing rates and additional incentives, said the company. With renovations and enhancements on the horizon, R2 Capital is inviting businesses to be part of Place 400’s transformation into a hub for growth and innovation.

Photo: Brunswick Realty