CPPIB exits $1.5bn deal as Oxford doubles down on offices despite broader pension retreat from sector
Oxford Properties has agreed to acquire Canada Pension Plan Investment Board’s (CPPIB) stake in a portfolio of seven office buildings in a deal that values the assets at $1.5bn, according to a person familiar with the matter, as reported by BNN Bloomberg.
The person, who requested anonymity due to the private nature of the discussions, said Oxford—real estate arm of the Ontario Municipal Employees Retirement System (Omers)—will purchase the 50 percent stake it does not already own.
The portfolio includes three buildings in Calgary and four in Vancouver, among them a recently completed tower called the Stack.
Spokespeople for both Oxford and CPPIB declined to comment.
The deal comes amid shifting dynamics in the North American office market.
While the sector was hit hard by the pandemic and a widespread shift to remote work, downtown office vacancy rates in Canada showed slight improvement by the end of last year, declining for the first time since 2020.
Oxford’s move contrasts with a broader trend among major investors, including CPPIB, who have been reducing their exposure to office properties.
In 2023, CPPIB offloaded interests in two US office buildings at significant discounts, including one Manhattan property sold for just US$1 plus the pension’s share of debt.
CPPIB also sold its stake in a Toronto office building earlier this year.
According to Bloomberg, Caisse de Dépôt et Placement du Québec, Canada’s second-largest pension fund, is currently seeking to sell a Chicago office tower.
The deal is expected to draw bids 59 percent below the asset’s purchase price nearly eight years ago.
Omers has also been affected by declining office valuations.
Its real estate portfolio posted a net loss of 4.9 percent last year, attributed in part to falling values for both office and life science properties. Still, the fund noted signs of improved leasing activity for higher-quality office assets.
Beyond Canada, Oxford retains a significant presence in international office markets, including New York City, where it co-developed the Hudson Yards project alongside Related Companies.
In the US, Blackstone Inc. has reportedly been seeking a stake in a New York City office tower, as per Bloomberg News.
