Sun Life Assurance wanted some company for its waterfront office building in Victoria — and paid a premium to get it.
Sun Life has completed what is considered a lopsided trade with property owner Industrial Alliance Insurance and Financial Services to acquire Upper Harbour Place I to complement Upper Harbour Place II, which Sun Life acquired last spring.
“The seller of that property was not overly motivated,” said Colliers International vice-president Mike Miller, noting Sun Life had to dig a little deeper to “entice the transaction to move along.”
Digging deeper turned out to be offering Industrial Alliance two properties in Calgary worth about $40 million for Upper Harbour Place I, which according to B.C. Land Titles sold for $17.5 million.
Miller conceded the transaction is unusual, but it comes out as a win-win.
“I’ve been doing this for 25 years and it’s the first trade I’ve ever been involved in,” Miller said. “Sun Life looked internally to see if there was anything in their portfolio that they could offer to induce Industrial Alliance to sell.
“We asked [Industrial Alliance] where they were light and they identified office and light-industrial space in Calgary. Sun Life just happens to have assets there [that] they were targeting for disposition in 2012. We put together two parties that had a need and it worked.”
The net result is Sun Life gets its second office building on the Upper Harbour, and Industrial Alliance takes the title to the Douglasdale Executive Centre and Douglasdale Business Centre near Deerfoot Trail in Calgary.
In Upper Harbour Place I, Sun Life gets 49,000 square feet of Class A office space built in 2003, which boasts Coast Capital Savings and engineering firm Read, Jones, Christoffersen as tenants. Between the Douglasdale properties, Industrial Alliance gets more than 160,000 square feet of office and light-industrial space on 10 acres with clients including Danone, Kraft Foods and Jeld-Wen Canada.
“For Sun Life, this was a logical purchase as the underground parking structure is common to both properties,” said Miller, adding all parties concurred it makes more sense to have one landlord for both.
“It means Sun Life is now further entrenched in a market they want to be in, which is Victoria,” said Miller. “They are becoming a dominant force in the office landlord community.”
Sun Life now has about 150,000 square feet of office space in Victoria.
Sun Life bought Upper Harbour Place II, which was built in 2007 and has 98,000 square feet of office space, for $32.5 million in the spring. Its tenants include AbeBooks, Stantec and GoodLife Fitness.
