CBRE Closes 1M Sq. Ft. Office Leases for Canadian Natural Resources in Calgary

You could say this deal was two in a million.

CBRE’s Bryan Walsh recently closed two deals for a combined 1 million sq. ft. of office space in Calgary for Canada’s largest oil and gas producer, Canadian Natural Resources Limited (CNRL).

Considering the economic climate and the state of the office market, a deal like this certainly turns heads. “It took a lot of creativity, patience, grit and knowledge,” says Walsh. “But also a great deal of trust.”

He tells us how he beat the odds to close Canada’s biggest office leasing deal of 2023.

Perseverance Pays Off

Walsh had supported CNRL over the years, helping them shed excess office space from acquisitions.

One day a CNRL representative questioned what to do about their upcoming office lease expiry, which would be in 2026.

Walsh immediately had ideas, but there was one major hiccup.

“They had never used a broker for an expiry,” he says. “They had declined help on previous deals, preferring to do it on their own.”

Not easily discouraged, Walsh sought out alternatives for CNRL to consider alongside the renewal option. His previous work with CNRL had a given him a good understanding of their values and culture, giving him an edge to collaborate on developing the right solutions. “I knew there was a risk of being charged premium rent if they stayed in their space,” he says. “So I came up with a Plan B that would beat their premium renewal cost and improve their workplace at the same time.”

Selling the Vision

Walsh proposed consolidating CNRL from their existing premises across three different buildings into two Class AA buildings. Located across the street from each other and boasting large floorplates, it appeared to be the perfect low-cost solution to accommodate CNRL’s space needs.

The first building, Cadillac Fairview’s 400 4th Avenue SW, was “relatively straightforward” says Walsh. “Their anchor tenant, Shell Canada, was about to move out, leaving the building entirely empty.” CNRL was one of only two tenants coming to market for a few years that could solve Cadillac Fairview’s problem.

The second part of the equation was trickier. Walsh had his eye on Oxford Properties’ Devon Tower at 400 3rd Avenue SW, which had 270,000 sq. ft. of vacancy.

“The landlord was actively out in the market,” he says. “I told them I could solve their vacancy problem, but it would have to be for 16 floors of space, including their full 13-floor vacancy.”

Oxford was skeptical at first, as this plan required them to hold off on any lease deals for several months. “I had to sell the vision and reassure the landlords,” Walsh says. “For the deal to work they would have to trust me and each other.”

Building a Partnership

Thankfully Walsh was familiar with both buildings, having listed 400 4th Avenue SW in 1996 and leased the same 13 floors in 400 3rd Avenue SW in 2002. He had also maintained strong relationships with both landlords, even listing one of Cadillac Fairview’s developments in recent years.

“Having that experience was critical,” Walsh says. “Without that pre-existing knowledge of the buildings and trust from both landlords, this deal would’ve never happened. They had to have faith in my experience and in knowing what was right for CNRL.”

He connected the landlords to come up with a joint solution. The team, collaborating with CBRE’s Client Solutions group, put together a brochure that was tailored to showcase CNRL’s potential new tenancy. It was branded as a two-building solution, which they dubbed “400²”.

“Building a partnership between the two landlords was a big advantage but not as easy as it seemed” Walsh says. “Here were two experienced pension funds that were fierce competitors but now had to work in sync to make sure the tenant’s needs could be met.

“It required constant communication, but both landlords were committed to making the deal happen.”

Sealing the Deal

Good things take time, especially when big changes are being proposed. CNRL toured the space several times and the vision started to take shape. Eventually CNRL determined that the relocation to 400 4th Avenue SW and 400 3rd Avenue SW was the best solution for their business. The new deal would benefit their bottom line, while improving both their workplace and neighbourhood.

Cadillac Fairview was extremely pleased with the outcome.

“Bryan’s creativity and vision brought about a solution to a large pending vacancy,” says Lou Ficocelli, CF’s vice president of leasing. “His focus, determination and wealth of experience helped us find a mutually beneficial opportunity for all parties.”

Equally pleased was Oxford’s vice president of real estate management West, Dave Routledge:

“Solutions to real estate’s most difficult challenges start with leadership and a clear vision. Bryan brought this vision to Oxford, resolving the largest pending vacancy in our Calgary office portfolio. His professionalism, depth of experience, competitive insight and perhaps most importantly, ability to build trust between three parties were crucial in making this transaction possible.”

The move will take place in phases as CNRL’s lease at Bankers Hall West comes to an end in 2025, followed by the expiry of its Bankers Hall East and Home Oil Tower leases in 2026.

“Getting this deal completed successfully took almost everything I learned since getting into this business in 1984,” says Walsh. “It shows that hard work, experience, creativity and perseverance really do pay off in the end. What is most meaningful, is that I was able to channel all of that to support a long-time client who trusted my idea and advice.”

It shows that in Calgary, opportunity continues to be alive and well.