- What 2 Queen Street East is back on the market
- Why Brookfield attempted to sell the office building in 2022 and 2023 but a sale never materialized
- What’s next It’s looking for bids around $215m
Brookfield is taking another crack at shopping a fully leased office tower in downtown Toronto that’s expected to fetch bids around $215m, Green Street News can reveal.
The investment titan shopped the 477,000 sq ft property, at 2 Queen Street East, in 2022 and 2023, but no deal was ever reached. At the estimated valuation of about $450/sq ft, a buyer would achieve a capitalization rate in the low 7% area.
JLL and RBC Capital Markets Realty have the assignment. The property is owned by a consortium that, alongside Brookfield, includes Canada Pension Plan Investment Board and Alberta Investment Management Corp. It’s managed by Brookfield Properties.
The 20-storey tower is 99.5% leased to 14 tenants, with a weighted average lease term of 4.5 years. Construction firm Bechtel Canada is the anchor tenant, and others operate in the financial services, professional services and healthcare sectors. There’s 16,500 sq ft of street-facing retail space, with tenants including Booster Juice and Salus Fresh Foods.
Completed in 2003, 2 Queen has 171 underground parking spaces and offers direct access to the PATH and Queen subway station. It’s LEED gold, BOMA 360 and WELL Health-Safety certified.
The building occupies a block at the northeast corner of Yonge and Queen Streets. It’s adjacent to CF Toronto Eaton Centre and near Union Station, the Don Valley Parkway and the Gardiner Expressway.
Toronto’s office market has been relatively quiet so far this year, and 2 Queen is one of just a few properties to be listed above $100m. Dream is shopping 438 University Avenue for $115m. In April, George Brown College and equity partner Halmont Properties purchased Corus Quay, at 25 Dockside Drive, from H&R REIT for $232.5m.
As of Q1 2024, the vacancy rate in downtown Toronto’s office market was 17.4%, according to CBRE. The financial core, where 2 Queen is located, had a vacancy rate of 15.1%.
Article revised at 11:30 a.m. ET on July 11 to include additional owners of 2 Queen Street.
