Mitchell Cohen

The city's hot real estate market has resulted in the sale of three downtown office towers, which have attracted two investors new to Ottawa.

Equifund Corporation of Toronto has purchased the Chambers building from the Standard Life Assurance Company for an undisclosed amount.

And, as originally reported by the Ottawa Business Journal, Northam Realty Advisers has purchased Heritage Place for an estimated $52.4 million and the Standard Life Centre for more than $80 million, although the exact figures were not disclosed.

These purchases of class A buildings are a good example of the city's growing presence as a prime investment arena, industry experts say.

Mitchell Cohen, executive vice-president of Toronto's Equifund, said his company views the city as a healthy investment.

"We really, really like Ottawa," Cohen said. "It's a really good market. There is stable employment and it's a world-class city."

Equifund specializes in heritage properties and the Chambers at 40 Elgin St. qualifies as this type of structure.

The company has just completed an award-winning restoration of the North Toronto Train Station and the renovation of King James Place in downtown Toronto. Equifund will not touch the Chambers, Cohen said, other than to do regular maintenance.

Equifund effectively rented the land lease from the National Capital Commission, while purchasing the lease for the building from previous owner Standard Life until 2056. At that time, the ownership of the lease goes back to the NCC.

The transaction gives Equifund the ability to manage and operate the building, as well as collect rent from tenants.

The deal also requires Equifund to make a "significant" monthly rental payment to the NCC for the land.

The building has special heritage designation from both the municipal and federal governments and Cohen said he has received a number of calls from people concerned Equifund will make drastic changes, but that is unlikely.

"We said to ourselves, 'Wow, what a fantastic building.' We're honoured to own a piece of history."

Cohen would not reveal the price, but said it was a "significant purchase" for Equifund.

The Chambers, a 14-storey, 212,500-square-foot complex comprised of three towers, including the Central, Scottish and Bell chambers, dates back to 1890.

Because of the building's heritage designation, Equifund must observe strict terms in the lease, including maintenance of the building.

The building is fully occupied with prestigious tenants including the National Capital Commission, the Senate of Canada, Earnscliffe Strategy Consultants, McCarthy Tetrault and the Canadian Life and Health Insurance Association.

Cohen said Standard Life will remain the building's property manager.

Pierre Hurteau, regional manager for Standard Life, said the decision was made to sell the Chambers and the Standard Life Centre because the timing is right. "The market is now very strong to sell buildings."

The Standard Life Centre, along with the Chambers, was put on the block earlier this year.

It's believed Northam will pay more than $130 million in the deal for the Standard Life Centre, a 377,000-square-foot complex at 333 Laurier Ave. W. and 280 Slater St., and the Heritage Building at 155 Queen St.

A Northam representative did not respond to a request for an interview, but, in June, president Patrick Handreke said Ottawa is the best real estate market in North America.

Northam is a Toronto-based firm with more than four million square feet of office and industrial space across the country.

- by Kate Chappell