Oxford Properties Group and the Canada Pension Plan Investment Board (CPPIB) are exploring the sale of Toronto’s Royal Bank Plaza in a deal that could be worth more than $1 billion U.S.
The prime downtown site at 200 Bay Street is one of the largest office complexes in Toronto’s financial district and includes two towers and a retail concourse with 1.5 million square feet of space.
Built in the 1970s, the towers feature windows that are covered with 24-carat gold coating, making them two of the most distinctive office buildings in Canada’s largest city. Royal Bank of Canada (TSX:RY) leases 40% of the complex to outside tenants.
The potential sale is part of a strategy by Oxford Properties, the real estate arm of the Ontario Municipal Employees Retirement System, to unload some office assets and increase exposure to life sciences, logistics and apartment properties. Oxford sold an office tower last month that’s leased to Microsoft Corp. in Cambridge, Massachusetts for $825 million U.S.
The proceeds from any sale of Royal Bank Plaza would be used to fund Oxford Properties’ development pipeline in the greater Toronto region, which currently sits at more than $8 billion U.S. Oxford Properties has owned the RBC headquarters site since 1999. CPPIB bought a stake in the complex in 2005.
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