CPP Investment Buys $64M Stake in Tower

EDMONTON, ALBERTA-Expanding its holdings in the solid office market of this provincial capital, the CPP Investment Board has acquired a 40% interest in Scotia Place, a 600,000-sf class A office tower Downtown. Morguard Real Estate Investment Trust, which previously held a 100% stake in the building, will retain a 20% stake, and an investment manager will acquire the remaining 40% interest. CPP’s stake is valued at $64 million. The entire property is valued at $260 million.

For CPPIB, the investment is a continuation of its strategy to own core properties in strong real estate markets. Currently the CPPIB has interests in six class A office properties in Downtown Edmonton, totaling approximately two million sf. The addition of Scotia Place increases its holdings in the Festival City to 2.6 million sf.

In a report issued last week, Moody’s Investor’s Services said that Canadian commercial real estate remains strong and continues to outperform commercial real estate in the US. In Edmonton, Moody’s reported improvements in the CBD office market. According to the Moody’s rating, Edmonton increased to a “Green 97″ rating from a “Green 86″ last year.