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Thread: 4 Edmonton Office Towers Just Sold for Surprising Prices

  1. #1
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    Default 4 Edmonton Office Towers Just Sold for Surprising Prices

    HSBC Bank Place
    Enbridge Place
    HSBC Building
    Milner Building

    These four building s alone declined $163M in a matter of 6-7 years.

    Information in the article on EdmontonCommercial.com:

    http://www.edmontoncommercial.com/4-office-towers-just-sold-edmonton-surprising-prices/

  2. #2

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    They're older buildings with no appreciable renovations done since they were last purchased while brand new, efficient inventory has come online. Sounds like they weren't interested in renovations, while the new owners probably will at the reduced rates.
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    No one proofed this article before publishing. Not even the first sentence:

    When Dream Office REIT decided to their Alberta assets,...
    I am in no way entitled to your opinion...

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    I was just surprised at the reduction in CMV... It's pretty drastic. Enbridge is a pretty decent building, as is HSBC Bank Place.

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    The sale prices were well below market rates as a means of disposing the assets.

  6. #6

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    Quote Originally Posted by ChrisD View Post
    The sale prices were well below market rates as a means of disposing the assets.
    However, any lower prices form the basis for new lower market rates going forward.

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    7.5mil for Milner...not knowing the floor plate could make good residential? Location is right.

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    What is the situation with asbestos?
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    Any potential clients out there for these spaces?
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    Good one Bill.

  11. #11

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    AIMCO is moving to the HSBC building. They are looking for more tenants.

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    ^ Which one? The OP listed two HSBC buildings!
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    This is a better location for aimco. Closer to the downtown business core
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    It could be the HSBC at Jasper and 106 Street.
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  15. #15

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    Quote Originally Posted by Sonic Death Monkey View Post
    ^ Which one? The OP listed two HSBC buildings!
    Sorry, AIMCO will move to HSBC Bank Place (10250 101 St). Which they recently bought. They are planning capital improvments on, and currently looking for tenants.

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    What kind of improvements?

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    Yikes. If the building sale prices in EdmontonCommercial.com are accurate, the City is also going to take a hit on its Downtown property tax revenues that are assessed based on fair market value.

    According to the City of Edmonton property assessment map, the HSBC Bank Building is currently assessed at $72.8 million and is being sold for $35 million. Enbridge Place is currently assessed at $73.7 million and is being sold for $25 million. One would think the owners of other Downtown office buildings will also be appealing their assessments to reflect the new market reality.

  18. #18

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    That'll hurt the Rogers Place CRL won't it?
    I am in no way entitled to your opinion...

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    Quote Originally Posted by East McCauley View Post
    Yikes. If the building sale prices in EdmontonCommercial.com are accurate, the City is also going to take a hit on its Downtown property tax revenues that are assessed based on fair market value.

    According to the City of Edmonton property assessment map, the HSBC Bank Building is currently assessed at $72.8 million and is being sold for $35 million. Enbridge Place is currently assessed at $73.7 million and is being sold for $25 million. One would think the owners of other Downtown office buildings will also be appealing their assessments to reflect the new market reality.
    Quote Originally Posted by ChrisD View Post
    The sale prices were well below market rates as a means of disposing the assets.
    Just cause that's what someone pays for it doesn't mean that's what it's worth. People sell low for all kinds of reasons such as to get rid of inventory asap. Someone bought low, will put in the money to bring it up to appropriate standards, and the value of the property will be even higher than last assessed. Someone else lost for some reason, but in the end, we win.

  20. #20

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    Quote Originally Posted by etownboarder View Post
    Quote Originally Posted by East McCauley View Post
    Yikes. If the building sale prices in EdmontonCommercial.com are accurate, the City is also going to take a hit on its Downtown property tax revenues that are assessed based on fair market value.

    According to the City of Edmonton property assessment map, the HSBC Bank Building is currently assessed at $72.8 million and is being sold for $35 million. Enbridge Place is currently assessed at $73.7 million and is being sold for $25 million. One would think the owners of other Downtown office buildings will also be appealing their assessments to reflect the new market reality.
    Quote Originally Posted by ChrisD View Post
    The sale prices were well below market rates as a means of disposing the assets.
    Just cause that's what someone pays for it doesn't mean that's what it's worth. People sell low for all kinds of reasons such as to get rid of inventory asap. Someone bought low, will put in the money to bring it up to appropriate standards, and the value of the property will be even higher than last assessed. Someone else lost for some reason, but in the end, we win.
    But low prices factor into a number of things as was pointed out above.

  21. #21
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    Quote Originally Posted by etownboarder View Post
    Quote Originally Posted by East McCauley View Post
    Yikes. If the building sale prices in EdmontonCommercial.com are accurate, the City is also going to take a hit on its Downtown property tax revenues that are assessed based on fair market value.

    According to the City of Edmonton property assessment map, the HSBC Bank Building is currently assessed at $72.8 million and is being sold for $35 million. Enbridge Place is currently assessed at $73.7 million and is being sold for $25 million. One would think the owners of other Downtown office buildings will also be appealing their assessments to reflect the new market reality.
    Quote Originally Posted by ChrisD View Post
    The sale prices were well below market rates as a means of disposing the assets.
    Just cause that's what someone pays for it doesn't mean that's what it's worth. People sell low for all kinds of reasons such as to get rid of inventory asap. Someone bought low, will put in the money to bring it up to appropriate standards, and the value of the property will be even higher than last assessed. Someone else lost for some reason, but in the end, we win.
    Not saying that all Downtown office buildings will be discounted for assessment purposes to the same degree as the buildings sold. The two office buildings cited above have particular challenges including the loss of major tenants in a down market. But there are also other Downtown office buildings (CN Tower, Scotia Place, TD Tower) with big increases in vacancy as the City relocates staff to the new City of Edmonton Tower.

    Property assessment is based on current fair market value i.e. what a building would sell for on the open market. There will be ripple effects on the valuations of other Downtown office buildings certainly in the short-term.

    It's hard to see how these highly discounted sales won't negatively impact revenue projections for the Downtown CRL.

  22. #22

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    ^^^
    This has happened in Calgary. Large decrease in downtown property valuations caused the city to shuffle tax burden to the suburbs to make up for it.

    http://calgaryherald.com/news/local-...ses-councillor

  23. #23

    Default Thanks for catching

    You are correct, we forgot the word "sell" in the first sentence, which has been corrected. As we had put an emphasis on the actual data in the article, please let us know if we missed any commas or apostrophes, or of course if we made any grammatical issues.


    Quote Originally Posted by Spudly View Post
    No one proofed this article before publishing. Not even the first sentence:

    When Dream Office REIT decided to their Alberta assets,...

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