Timbercreek Capital and Aspen Properties have closed on the acquisition of the 1 Palliser Square office in downtown Calgary and commenced its conversion into a multi-residential tower.

The companies also announced that they have closed on a private placement offered this summar as part of the acquisition. The private placement raised total proceeds of approximately $21.6 million in proceeds. While launching the offering, Timbercreek and Aspen said it was intended to raise $30 million.

The 1 Palliser Square building comprises a 27-storey, vacant class B office structure located next to the Calgary Tower. Known as Palliser One, the project will see approximately 418,000 square feet of office space into into 418 residential rental units and amenities

The project is receiving funds through the City of Calgary’s Downtown Development Incentive Program. Known as DIP, the program aims to address the city’s high office vacancy by repurposing older office buildings into much-needed rental-housing stock. DIP also funds the conversion of office buildings into hotels, schools and performing arts centres.

Toronto-based Timber Creek, through a subsidiary, and Calgary-based Aspen formed a joint-venture limited partnership, 1 Palliser Square LP, to complete the acquisition.

The transaction was facilitated by co-lead agents and joint bookrunners Raymond James Ltd. and Canaccord Genuity Corp., alongside a syndicate that included Richardson Wealth Limited, Wellington-Altus Financial Inc., and iA Private Wealth Inc.

Palliser One is slated to include an affordable housing component.

The city resumed the DIP program in the fall of 2024 after pausing for about a year because its initial funding had been exhausted.

Founded in 2000, Timbercreek is one of Canada’s leading alternative investment managers specializing in debt and equity investments in value-add commercial real estate across Canada, the U.S., and Europe.

Aspen is a boutique real estate company owns and manages approximately 4.25 million square feet of office space across Calgary and Edmonton.

Rendering: Government of Alberta