R2 Capital Partners has acquired two class A office towers in Calgary’s northwest quadrant for a price well below their previous market value.

The company said it purchased One and Two Executive Place for $160 per square foot, representing a 59% discount from the $46.55 million price the properties last traded for in 2014. The two towers total 119,030 square feet of leasable space across 1.53 acres.

Constructed by 2006, the four- and seven-storey towers are fully leased to 14 tenants, with government covenants accounting for 32% of occupancy. The tenant base includes medical groups, multinational corporations, and government offices, with average occupancy exceeding 10 years.

“While downtown Calgary continues to face elevated vacancy and investor caution, suburban assets remain highly resilient, underpinned by stable tenant demand and institutional-quality covenants, yet are trading at deep discounts to both historical values and replacement costs,” said Brock Rogerson, managing partner at R2 Capital Partners.

“Over my investment career, and as a born-and-raised Calgarian, I have never seen an opportunity where the fundamentals align this strongly for a real estate investment in Calgary.”

Although the towers are classified as suburban, Calgary does not have any suburbs and the area is not overly far from the downcore.

The stabilized assets deliver an in-place cap rate exceeding 12%. Located across from McMahon Stadium one block from the Banff Trail LRT station, the buildings are supported by nearby institutional and healthcare anchors such as the University of Calgary, Foothills Medical Centre, Alberta Children’s Hospital, and North Hill Shopping Centre.

R2 Capital, a privately held real estate investment firm, said the deal is part of a broader Calgary strategy, with additional acquisitions planned.

Pictured: Two towers in northwest Calgary purchased by R2 Capital.

Photo: CNW Group/R2 Capital