The real estate arm of British Columbia's largest pension fund sold an office complex with retail space that serves as Amazon's Vancouver base for the highest price on record paid for a single office property in the region.
QuadReal Property Group sold The Post, a 1.2 million-square-foot development on West Georgia Street that once served as Canada Post's western hub, to Spanish billionaire Amacio Ortega's Pontegadea.
While QuadReal declined to disclose the sale price, BC Assessment valued The Post at $924.2 million as of July 2024, and sources close to the transaction said the property sold for over $1.1 billion, or about 780.5 million U.S. dollars.
That price makes the deal the largest single-asset office sale on record in greater Vancouver, and one of the biggest ever in the country, according to CoStar. It also ranked as one of the top three office sales ranked by price in North America this year.
"This transaction sets a new high-water mark — likely in excess of pre-pandemic valuations, when the downtown office market was just 2% vacant," said Paul Richter, director of CoStar Market Analytics in Western Canada. "Downtown Vancouver remains the tightest major downtown office market in North America, so it is no surprise that an asset like The Post, fully occupied by a tenant like Amazon, attracted international interest."
Vancouver-based QuadReal, the real estate arm of provincial public pension fund British Columbia Investment Management Corp., manages $94 billion in assets globally.
QuadReal will stay on board as the property manager at The Post, which is "one of the most ambitious heritage redevelopments in Canada’s history," the seller said in a statement.
Originally built in 1958, the block-long complex at 349 W. Georgia St. was once among the Vancouver region's largest buildings. QuadReal renewed and restored many of the building's iconic features while adding 1.1 million square feet of office space and a large retail atrium that has become a premier shopping destination.
The redeveloped complex opened in 2023, and Seattle-based Amazon moved into just under 500,000 square feet in July of last year, according to CoStar data.
Resilient office market
Vancouver's office leasing activity is poised to match 2022's post-pandemic annual peak of 4.2 million square feet, according to a CoStar analysis. The downtown office vacancy rate is around 12%, well below other large downtown districts in North America.
CoStar has logged at least $2.4 billion in office investment sales volume over the past 12 months, more than double the region's trailing five-year average of $1 billion, according to CoStar records.
"The sale of The Post sends yet another strong signal to the international investment community that the Vancouver office market is one with strong fundamentals," Richter said.
Pontegadea, the property investment business of Inditex fashion group founder and owner Ortega, has been on a global buying spree that includes several Amazon-occupied buildings.
In late 2023, Pontegadea bought a nearly 1 million-square-foot warehouse leased by Amazon in Burnaby, southeast of Vancouver. The $358 million sale is one of the largest industrial deals in Canadian history.
The Spanish billionaire's company last month acquired a large Amazon warehouse east of Liverpool, England.