- What Dream Office REIT is selling 438 University Avenue for $115m
- Why The REIT initially sought offers from $105m to $110m, but raised the price after a strong round of bids
- What next The Class-A building is 93% leased and has a weighted average remaining term of 5.3 years
After a strong round of bidding, Dream Office REIT is testing the market to see whether it can fetch roughly $115m for an office building near Toronto’s financial district, Green Street News can reveal.
The 323,000 sq ft property at 438 University Avenue hit the block at the start of the year. The REIT initially sought offers from $105m to $110m. But after receiving multiple bids in that area, it opted to solicit another round of offers. The company took more bids about a month ago, and it’s not clear if a decision has been made.
TD Cornerstone Commercial Realty and CBRE are marketing the property.
The Class-A building is encumbered by a mortgage with TD Bank that matures in August 2027. That debt could be assumed by a qualified buyer.
The property is 93% leased. Anchor tenant Infrastructure Ontario occupies over 191,000 sq ft and recently executed a five-year renewal, according to marketing materials.
Investment-grade tenants account for 79% of the occupied space and have a weighted average remaining lease term of six years. The overall weighted average remaining term is 5.3 years. In-place net rents are $23.90/sq ft, approximately 32% below the downtown Class-A average of $35.39/sq ft.
There are 177 underground parking spaces, and the building has direct interior access to St. Patrick subway station. Built in 1992, the property is designated LEED platinum.
Dream has spent $7.5 million on capital expenditures at 438 University Avenue since 2014, including upgrades to common areas, the lobby and the elevators.
The company, led by chair and chief executive Michael Cooper, owned and managed over 3.5 million sq ft of office space in downtown Toronto and had $2.7 billion in total assets at yearend 2023. In January 2023, it sold 720 Bay Street, a Class-B office building, for $135 million and is seeking to offload the Class-A office building at 655 Bay Street.
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