- Oops!Something went wrong.Please try again later.
TORONTO (Reuters) -Oxford Properties Group and co-investor Canada Pension Plan Investment Board (CPPIB) have hired RBC Capital Markets to explore a potential sale of Toronto's Royal Bank Plaza, according to a spokesperson for Oxford.
The downtown office complex is among Toronto's largest, totaling almost 1.5 million square feet across two towers, with RBC leasing 40% of the building.
Famed for a series of windows with a 24-karat gold coating, the building was built in the 1970s and is a stand-out feature in Toronto. However, office real estate around the world has been under pressure since the onset of the coronavirus pandemic as more and more companies adapt remote working models.
The sale, for which Oxford has hired CBRE as well as RBC Capital Markets, is part of Oxford's move to increase its assets in logistics, multifamily and life sciences, according to the spokesperson.
Oxford, the real estate business for the Ontario Municipal Employees Retirement System (OMERS), has owned and managed the property since 1999, while CPPIB became a co-investor in 2005.
Proceeds will be used to fund Oxford's Greater Toronto Area development pipeline.
"The anticipated sale is part of our global diversification strategy and we will look to redeploy the proceeds to fund our growth in Toronto, where we continue to have a favourable long-term view," said Randy Hoffman, senior vice president, Canada at Oxford Properties, in an emailed statement.
Oxford declined to comment on pricing, but a source close to the matter said the building should sell for more than C$1 billion ($797 million).
CBRE declined to comment on the deal.
"From time to time, we evaluate opportunities to realize gains on our investments, including real estate," said a spokesman for CPPIB.
"We remain confident in the long-term potential of Toronto as a leading global financial center, including as an owner of commercial property."
RBC said it plans to stay in the building regardless of the sale, and will continue to invest in it. Its naming rights remain in place, RBC spokesperson Andrew Block said.
($1 = 1.2550 Canadian dollars)
(Reporting by Maiya Keidan, Shariq Khan and Nichola Saminather; Editing by Rosalba O'Brien and Leslie Adler)