Article
Saskatoon Office Towers Are All the Rage Right Now
September 28, 2022 3 Minute Read
It was a good summer for office tower sales in Saskatoon. Something few other Canadian cities can say.
Local developer and landlord Duchuck Holdings just closed on its purchase of Princeton Tower, an 11-storey, 150,000 sq. ft. office building in the city centre.
In June, Duchuck acquired its neighbouring sister building, PCS Tower, owned by potash giant Nutrien, which moved to the new River Landing development.
Both tower sales were brokered by CBRE’s Michael Bratvold, who represented the sellers Nutrien (PCS Tower) and Dream Office REIT (Princeton Tower).
Sister buildings: Princeton Tower and PCS Tower.
Dream manages both office buildings, which total 300,000 sq. ft. and share a parkade and retail plaza.
“It’s a bold, courageous move to buy 300,000 sq. ft. of office in this market,” says Bratvold, noting that both towers currently sit at 50% vacancy, and the city’s downtown rate is hovering around 15%.
“But if you have capacity to hold these assets until the economic recovery is in full force and hybrid work is sorted out, years from now the market will look back at this moment as having been a really good time to add office space to your portfolio.”
Two Is Better
Selling to different owners was going to be complicated when it came to operations, Bratvold notes, “so it made sense from a management perspective to have the same party buy both buildings.”
Leasing prospects are promising for the Class A PCS and Princeton towers, he points out, especially since there are just one and a half floors remaining available for lease at River Landing, the only other real game in town for office space.
“Groups looking for blocks of space are now looking at existing product. And it doesn’t get better than these two buildings.”
Bratvold and his CBRE team are handling leasing for both buildings, and says Duchuck plans to reposition the assets and add value through upgrades and an aggressive leasing strategy.
“River Landing may have raised the bar, but savvy owners will meet and exceed those expectations in time. Every building and property type has it’s moment, this is ours.”
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