Dream Office Real Estate Investment Trust has hired CBRE Group Inc. and Toronto-Dominion Bank to market 438 University Ave., according to marketing documents. The company also remains open to offers for another building at 655 Bay St., which was put up for sale more than a year ago.
438 University is 323k sf. 655 Bay is 309k sf. A year ago D sold 720 Bay Street for $130mm or $544/sf. If one or both of these buildings sell then it would be very meaningful for D's financial condition.
Can't stop thinking that D.UN got the big D here as you suggested in your threads post. This smells capitulation, selling at the bottom, and honestly a big if not complete reduction in its distribution :/
Sale of either or both of these Discovery District (Medical & Education) properties would preserve D's core financial district portfolio while providing additional capital for improvements/incentives and shareholder returns. This is consistent with comments Cooper made to the G&M last year that owners able to invest in their buildings would emerge strongest from the downturn.
It's not the best time to sell, but it's the best time to have capital available to invest. the better REITs are all doing it. AP sold its data centers. H&R sold Corus Quay and some retail properties.
Thank you very much for taking the time to respond Koneko. I think your take is too kind to D,and its management but we'll see what happens. I'm bag holding, so I think I'll keep doing that for the time being.
Thanks! I like AP a lot, held it in the past, and could hold it at any time in the future. I absolutely did not want to be a record holder for the recent large non-cash taxable distribution.
Right now I think D has a lower valuation and a cleaner story. And I think it's a compelling acquisition target.
I thought AP overreached with its large 700DLG purchase in Montreal - a very ordinary and uncreative building that seemed totally out of character. But the leasing brochure for the renovated space (with address change) looks compelling:
In addition, the just released CBRE 4Q23 Office report shows Toronto downtown vacancy rose to 17.4%. Negative absorption of 827ksf due to new supply which was mostly vacant. Major contributors were T3 Bayside (on the Lakefront) and T3 Sterling (near MOCA). These "creative modern workplaces" are competing with AP for TAMI tenants.
CBRE said: "Well-capitalized occupiers continue to seek quality office space with legal and
educational users in the market with sizable mandates." That's more like D's core properties, including its "Discovery District" buildings near UT and hospitals.
BNN reports that Dream Office Discovery District buildings are being marketed.
https://www.bnnbloomberg.ca/toronto-office-tower-goes-up-for-sale-in-sign-of-a-market-thaw-1.2027104#:~:text=(Bloomberg)%20%2D%2D%20A%20Canadian%20landlord,up%20nearly%20two%20years%20ago.
Dream Office Real Estate Investment Trust has hired CBRE Group Inc. and Toronto-Dominion Bank to market 438 University Ave., according to marketing documents. The company also remains open to offers for another building at 655 Bay St., which was put up for sale more than a year ago.
438 University is 323k sf. 655 Bay is 309k sf. A year ago D sold 720 Bay Street for $130mm or $544/sf. If one or both of these buildings sell then it would be very meaningful for D's financial condition.
Can't stop thinking that D.UN got the big D here as you suggested in your threads post. This smells capitulation, selling at the bottom, and honestly a big if not complete reduction in its distribution :/
Sale of either or both of these Discovery District (Medical & Education) properties would preserve D's core financial district portfolio while providing additional capital for improvements/incentives and shareholder returns. This is consistent with comments Cooper made to the G&M last year that owners able to invest in their buildings would emerge strongest from the downturn.
It's not the best time to sell, but it's the best time to have capital available to invest. the better REITs are all doing it. AP sold its data centers. H&R sold Corus Quay and some retail properties.
Thank you very much for taking the time to respond Koneko. I think your take is too kind to D,and its management but we'll see what happens. I'm bag holding, so I think I'll keep doing that for the time being.
Excellent work, as usual. Thank you. If I may, why are you not holding or swapping with D.UN, Allied Properties?
Thanks! I like AP a lot, held it in the past, and could hold it at any time in the future. I absolutely did not want to be a record holder for the recent large non-cash taxable distribution.
Right now I think D has a lower valuation and a cleaner story. And I think it's a compelling acquisition target.
I thought AP overreached with its large 700DLG purchase in Montreal - a very ordinary and uncreative building that seemed totally out of character. But the leasing brochure for the renovated space (with address change) looks compelling:
https://www.cbre.ca/resources/fileassets/CA-Plus-355473/3e35e064/1001%20RB_Marketing%20Flyer-EN-May23.pdf
In addition, the just released CBRE 4Q23 Office report shows Toronto downtown vacancy rose to 17.4%. Negative absorption of 827ksf due to new supply which was mostly vacant. Major contributors were T3 Bayside (on the Lakefront) and T3 Sterling (near MOCA). These "creative modern workplaces" are competing with AP for TAMI tenants.
CBRE said: "Well-capitalized occupiers continue to seek quality office space with legal and
educational users in the market with sizable mandates." That's more like D's core properties, including its "Discovery District" buildings near UT and hospitals.
https://www.cbre.ca/-/media/project/cbre/dotcom/americas/canada-emerald/insights/Figures/Office/Canada-Office-Figures-Q4-2023.pdf