CBRE Finds PCL Construction a New Headquarters in Ottawa
May 16, 2023 5 Minute Read
Sometimes a transaction means much more than the square feet and dollar amounts trading hands. This is one of them.
A new headquarters is big news on its own, but PCL Construction’s new Ottawa office also says a lot about the future of office space, the Ottawa marketplace and just how much creativity and persistence are required to make transformative real estate transactions happen these days.
PCL has inked a lease for 40,000 sq. ft. over three floors at 3755 Riverside Drive, a two-building office complex near the airport that’s been anchored since original construction by IBM (formerly Cognos).
The 283,926 sq. ft. Riverside Drive complex was owned by IBM, which has been moving away from owning and managing its own real estate portfolio in Canada in recent years. It was acquired by Crown Realty Partners in 2021 in a transaction brokered by CBRE’s National Investment Team (NIT).
The 3755 Riverside Drive deal marked Toronto-based Crown’s third acquisition in the Ottawa area and followed its purchase of iconic Place de Ville, a 1.2 million sq. ft. downtown office complex, on behalf of Vestcor and Crestpoint, a transaction also brokered by CBRE’s NIT.
At a time when there are questions being raised about the future of office space, Crown seems to have the answers: well-located, well-amenitized and ESG future-focused workplaces. “They’re super bullish on office,” says Yuke. “And so is PCL.”
Crown entered the Ottawa market with the acquisition of Carling Executive Park in 2019. The company now manages more than 2.5 million sq. ft. of office space across the National Capital Region.
“We have brought our company's unique approach to leasing and management into the Ottawa market, which has led to great success,” says Scott Watson, Crown’s Managing Partner of Acquisitions and Leasing.
“We have been welcomed by the brokerage community, major users and major owners who have hired us for property management on their assets.
“With a team of more than 40 employees on the ground in the city, we are fully committed to a long-term future within the Ottawa area.”
3755 Riverside Drive
A Win for All Involved
IBM will continue to occupy the entirety of the larger of the two buildings at 3755 Riverside Drive. PCL, which is taking a portion of the smaller building, will be relocating from its owner-occupied HQ in suburban Rideau Heights.
“It’s not easy for any former owner as they move through the process and come to terms with the needs of other tenants and having other businesses on the premises,” says Yuke.
“But there are a lot of good case studies out there that prove the right deal structure and goodwill on the part of all the parties involved can make this a win for everyone involved.”
Crown has a long history of converting single tenant office assets to multi-tenant buildings, including four major campuses across the Greater Toronto Area.
“Campuses provide a unique opportunity when multi-tenanting for varied uses, this was no exception,” Watson says. “It offers ample parking, onsite amenities and a large lobby, which we will be modernizing this fall.”
Construction giant PCL was awarded the tender from Crown to upgrade and modernize the main lobby of the Riverside Drive complex.
Crown will be completing amenity upgrades to the campus while at the same time including the onsite conference facilities and fitness centre, and the addition of more car charging stations and other ESG-centric and tenant experience initiatives.
Before taking occupancy in summer 2024, PCL will be doing their own tenant fit-out.
“They’ll be doing all the work required to convert the building to be the future, long term Ottawa head office for PCL,” says Yuke. “They’re bringing this 30-year-old building up to a 2023 Class A standard to provide best in class space for their team.”
Persistence pays off
The 3755 Riverside Drive deal represents the culmination of a multi-year effort by Yuke, who first reached out to PCL in 2018 in a bid to secure its tenant representation business.
He remained in contact throughout the pandemic and in fall 2021 presented the company with a market survey of what office space opportunities existed in the size range PCL had been seeking.
Knowing via his deep network of contacts that IBM was planning to sell 3755 Riverside Drive, and with insight into what it would take to get a leasing deal done there, Yuke presented the off-market opportunity to PCL shortly before Crown’s acquisition closed at the end of 2021. (Yuke had learned about the opportunity through Crown’s close connections within the Ottawa brokerage community.)
PCL toured the building and following extensive negotiations throughout 2022, including working out arrangements to accommodate IBM’s scaling down of its leasing footprint to make room for shared amenities onsite, finally put pen to paper this past February 2023.
“It was a long haul, but it speaks to the importance of staying the course and keeping in touch with clients, especially during tough times,” Yuke says. “There is nothing more important than persistence and relationship building.”
Geoff Howe, District Manager with PCL Constructors Canada, echoes this sentiment.
“In a short period of time having joined the deal later in its progress, I was able to develop a strong relationship with Brandon and Erik and was impressed with their client-focus and attention to detail,” he says.
“They understand us as a client and are looking out for our best interests which is how it should be. I am proud that we’ve developed this opportunity together where we can both be successful.”
We appreciate that the CBRE team has continued to support and remain patient with us as we make the right decisions for our growing business.”
3755 Riverside Drive
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