Restored heritage office building in Gastown acquired for $10.7M

Vancouver-based Upfield Capital has acquired a 23,000-square-foot heritage office and retail building in Gastown, a sign of renewed confidence in office real estate in the downtown core.

Upfield acquired the vacant five-storey brick-and-beam asset at 342 Water St. from Allied Properties REIT for $10.7 million, said a Nov. 10 press release.

The building, which was built in 1902 according to BC Assessment, was recently restored by Allied with a full seismic upgrade, mechanical replacement and roof overhaul. It will now serve as the new head office for Upfield, Edgar Development and Bridgemans Services Group, who will together occupy about 50 per cent of the building following interior improvements, said Monday’s release.

“This is an example of finding real value in today’s market,” said Upfield co-founder Rob Greer in a statement. “Gastown was hit hard during the pandemic, but we believe in its long-term potential. This acquisition is a sign of reinvestment in the neighbourhood, and a signal that recovery is underway.”

The building features a character façade, exposed beams and prime retail frontage, “exemplifying the kind of legacy real estate that Upfield believes can be repositioned for long-term performance,” said the release.

The deal suggests improving confidence in Vancouver office real estate, which may be seeing renewed activity following low deal velocity during the pandemic and the subsequent escalation of interest rates.

“Even in a shifting office market, well-located assets remain highly sought after,” the release quoted listing agent Carter Kerzner, senior vice-president with CBRE Ltd., as saying. “This transaction reflects strong buyer confidence and the enduring strength of Vancouver’s downtown core.”

Upfield is a privately-held real estate investment and asset management firm founded by Peter Edgar and Rob Greer. It is backed by high-net-worth and institutional investors and has a portfolio that includes industrial, rental housing and mixed-use development, said the press release.

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