[Editor's Note: A previous version of this article inaccurately stated that Forgestone sold its stake to Morguard. Forgestone previously sold their stake to TD Greystone, who then sold a stake to Morguard.]
On Wednesday, Mississauga-based real estate company Morguard Corporation announced that it had acquired a 20% ownership interest in Telus Garden, a high-profile Class-AAA office tower in the heart of downtown Vancouver.
The 24-storey Telus Garden sits at 510 W Georgia Street, between Seymour Street and Richards Street, and houses 557,255 square of office space, 32,855 sq. ft of retail space, and a glass-encased lobby with lush gardens, water features, and a piano, visible from W Georgia Street.
According to the building directory, tenants of Telus Garden include Telus, CIBC, JLL, Henriquez Partners Architects (who designed the building), and Amazon, who also occupies the office towers at The Post, located just a block away. The property is managed by Morguard.
"The high-quality build and prime location of Telus Garden make it an appealing choice for top-tier tenants, particularly those in technology and professional services," said Tom Johnston, Morguard's SVP of Asset and Property Management in Western Canada. "With its highly sought-after, investment-grade tenant base, the property offers stable and sustainable income growth for our office portfolio."
"We are thrilled to strengthen our presence in the heart of downtown Vancouver, one of Canada's premier office investment markets with some of the lowest vacancy rates in North America," added Morguard President & COO Angela Sahi. "This acquisition offers strong growth potential and aligns with our commitment to a more sustainable Morguard with the building's thoughtful design and environmental features."
Morguard did not disclose the price they paid for the 20% stake and also did not identify the vendor.
The Telus Garden
The exterior (left) and interior (right) of the main floor of Telus Garden. / Henriquez Partners Architects
The property where the Telus Garden now sits was formerly occupied by a large multi-level parkade before it was redeveloped by prominent Vancouver developer Westbank and Vancouver-based telecommunications giant Telus Corporation. Construction completed in 2016, but Westbank and Telus quickly sold the property in 2018 to an undisclosed buyer for an undisclosed price.
However, it was later revealed that the sale price was $600 million and the buyer was Forgestone Capital and Greystone Managed Investments, according to a report published by commercial real estate brokerage Avison Young. Later that same year, Greystone Managed Investments was acquired by TD Bank and now operates as TD Greystone Asset Management.
A TD Greystone investment document identifies Telus Garden as being owned under the TD Greystone Real Asset Pooled Fund Trust. Legally, the property is owned under 500 Georgia Property Inc., which is controlled by Georgia & Seymour Properties Limited Partnership, according to British Columbia's Land Owner Transparency Registry.
Upon inquiry, a representative from TD Bank told STOREYS that TD Greystone owned 100% of Telus Garden prior to this transaction, sold a minoriy stake in Telus Garden to Morguard, and currently maintains 80% ownership in the property, indicating that TD Greystone previously bought out Forgestone Capital's stake.
The transaction has already been cleared, according to Competition Bureau records. A review of the merger between Morguard Corporation and Georgia & Seymour Properties Limited Partnership was opened on August 22 and was concluded on September 3, via an Advance Ruling Certificate.
BC Assessment currently values 510 W Georgia Street at $451,451,000 — a significant drop-off from the $600 million that was paid to acquire the property. The property value also appears to be trending in the wrong direction, as one might expect for office buildings. Just a year ago, BC Assessment valued the property at $537,115,000. In this time span, the value of the building has dropped from $420,911,000 to $335,247,000, while the value of the land has stayed at $116,204,000.
Half a block east from Telus Garden, at 400 W Georgia Street, is the Deloitte Summit, a 24-storey Class-AAA office tower that was also developed by Westbank. Earlier this year, Westbank sold a majority stake in the property to its partner, Allied Properties REIT. Across the street from Deloitte Summit sits 401 W Georgia and 402 Dunsmuir, the two office buildings that were sold by Oxford Properties earlier this year.
