Curious what $1B worth of Edmonton real estate looks like?
With a month still to go in 2018, the top 10 commercial real estate transactions in Edmonton have already passed the $1 billion mark. This number is propped up nicely by the sale of Edmonton Tower from Darryl Katz to AIMco for $400 million and an assisted living portfolio (2 properties in Edmonton, 1 in St. Albert & 1 in Morinville) for a combined price of $297 million. The purchaser, Chartwell Retirement Residences, will be also be acquiring a fifth property currently under construction in Sherwood Park for $120 million.
|Type||Address||Land Area||Building Area||Sale Price|
|Office: Downtown High-Rise||10111 104 Ave||1.67 Acres||631,027 Sq Ft||$400,000,000|
|Assisted Living||4480 McCrae Ave||3.68 Acres||N/A||$102,502,000|
|Assisted Living||18 Hebert Road – St. Albert||2.55 Acres||N/A||$94,568,000|
|Assisted Living||944 James Mowatt Trail SW||3.24 Acres||N/A||$87,807,000|
|High-Rise Apartment||10125 121 St||1.26 Acres||N/A||$67,250,000|
|Warehouse: Multi-Bay||10402 184 St||21.97 Acres||415,557 Sq Ft||$62,954,334|
|Warehouse: Multi-Bay||6510 20 St||32.59 Acres||461,817 Sq Ft||$61,421,200|
|Retail: Shopping Centre||140 St. Albert Trail – St. Albert||13.98 Acres||130,089 Sq Ft||$51,200,000|
|Warehouse: Single Tenant||27286 96 Ave – Acheson||52.51 Acres||12,647 Sq Ft||$48,000,000|
|High-Rise Apartment||10620 116 St||1.72 Acres||N/A||$47,000,000|
A couple interesting notes from these sales:
- The City of Edmonton is the main tenant in Edmonton Tower. If you wonder why property taxes are continuing to rise, you don’t have to look much further than the fact that City employees are leasing space in brand new class A office space. Yes, there’s an argument to be made that the building helped spur development in the area and that the new building is leading to more efficiencies, but that certainly hasn’t been reflected in any reduction of municipal spending. The decision to lease brand new office space is not the sole reason why property taxes are rising, but it does speak to the culture of spending at the City. If they feel municipal employees deserve the best space in the city, it is not unreasonable to assume that mentality can be extrapolated across all areas of spending. As an example, this can help explain why the City feels the need to build a $200+ million recreation centre in west Edmonton. Although we are in the throes of the worst provincial recession in decades, councillors and administration feel it is necessary to build the most expensive rec centre in Edmonton’s history.
- It’s fascinating that a developer (Katz) can receive large municipal funding for the adjacent arena, only to lease the building to the City of Edmonton, and then in turn sell the building to a government pension fund (AIMco). That’s a lot of tax payer money at work, with questionable transparency.
- Vibe Lofts, which is #10 on the list, sold at a 4.55% cap rate.
- A sale that just missed this list was a 7 building retail portfolio in Century Park that sold for $41.8 million and reflected a 5.86% cap rate (assuming full vacancy at market rates).
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The Hendrix (High-Rise Apartment) just sold for $96.1M but we don’t have all the data on it yet. There may also be additional sales that have recently closed that we don’t have data on yet, but will update when we do.
Chad GriffithsPartner, SIOR, CCIM
Chad is a partner with NAI Commercial Real Estate and focuses on the Greater Edmonton area. Chad entered the industry in 2004 and has completed over 400 commercial transactions with clients ranging from small, local companies to large institutional owners. Chad has been a top 15 producer with NAI Canada-wide since 2013.
Ryan BrownPartner, BCom, SIOR
Ryan is a partner with NAI Commercial Real Estate in Edmonton and is currently ranked nationally as one of NAI's top advisors. Having executed in excess of $100 Million worth of sales transactions and over 2 Million square feet of lease transactions, Ryan has developed a firm understanding of asset evaluation and an aptitude for building design, functionality, and long-term practicality.
Darcie is a licensed Commercial Real Estate Agent in the Province of Alberta with a focus on the Edmonton market and its surrounding areas. Darcie accomplishes custom solutions for her clients through her personable nature and results driven attitude. Darcie can help if you are looking to invest in commercial real estate or are looking for representation for a sale or lease transactions.
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