Nova Scotia Firm Acquires Stephen Avenue Place in Calgary After Court-Ordered Sale
In a significant real estate transaction, Nova Scotia-based Armco Capital Inc. has purchased Stephen Avenue Place, a 40-storey downtown tower in Calgary, along with two adjacent properties. The acquisition follows a court-supervised sale process initiated after the building entered receivership last fall, marking a pivotal moment for the city's commercial landscape.
Background of the Sale
The sale process was triggered when a forbearance period for payments was terminated, leading to the re-appointment of MNP Ltd. as the receiver of the property in October. The Court of King's Bench placed Stephen Avenue Place under receivership after Timbercreek Mortgage Servicing, one of the mortgage lenders, applied for court action. This move came as part of efforts to manage the property's financial challenges.
Originally constructed in 1976 as Scotia Centre and renovated in 2022 at a cost of approximately $30 million, Stephen Avenue Place boasts a rentable area of over 612,000 square feet. However, it currently faces a vacancy rate of 39%, reflecting broader trends in Calgary's downtown office market. The building, located at the corner of 2nd Street and 8th Avenue S.W., is adjacent to the CORE shopping mall and houses tenants such as Major Tom and Barbarella.
Details of the Acquisition
Armco Capital Inc. acquired Stephen Avenue Place and the connected Kraft and Venator buildings for an undisclosed fee. While the sale price remains confidential in updated court documents from March 31, the initial asking price for Stephen Avenue Place was listed at $60 million in January by real estate brokerage Avison Young. The adjacent properties were listed for $5.6 million. All three properties were previously owned by Slate Asset Management, a Toronto-based private equity firm, whose representative declined to comment on the transaction.
The acquisition is seen as a positive signal for Calgary's downtown, which has faced challenges including an oversupply of office space and a collapse in the property tax base in the mid-2010s. Andrew Doudican, urban strategy director for the Calgary Downtown Association, expressed enthusiasm for the sale, noting that Armco Capital has prior investments in the city, such as Bow Valley Square, one of the busiest towers in the core.
Implications for Calgary's Downtown
Ward 7 Coun. Myke Atkinson highlighted that interest from an out-of-province company like Armco Capital could indicate a turning point for Calgary's central business district. He pointed to initiatives like the downtown office conversion program as part of efforts to correct the oversupply of office space and attract new investments.
Doudican added that the sale of a prominent office building like Stephen Avenue Place demonstrates investor confidence in the downtown's potential for revitalization. He emphasized Armco Capital's role in contributing to the vibrancy of the area, leveraging existing partnerships with entities such as Concord and McDonald's.
The new ownership is expected to bring fresh opportunities and stability to Stephen Avenue Place, potentially reducing vacancy rates and enhancing the building's appeal in a competitive market. As Calgary continues to navigate post-pandemic recovery and urban renewal, this acquisition underscores the ongoing evolution of its downtown real estate sector.
