$125M acquisition of Queen Street office tower a ‘sound investment,’ PSPC says

David Sali

March 14, 2024
4:06 PM
ET

Organizations: Larco Investments, Morguard Corp., Public Services and Procurement Canada

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The federal public works department says its purchase of a prominent downtown office building whose occupants include House of Commons staff and CBC headquarters is a “sound investment” that will result in long-term cost savings for taxpayers. Morguard, the building’s previous owner, announced last week that Public Services and Procurement Canada exercised an option to purchase the 11-storey tower at 181 Queen St. for $125.3 million in one of the biggest commercial real estate transactions in the city’s history. Morguard had owned the 275,000-square-foot building since it opened in 2004. Since then, its only tenants have been the CBC, which leases the first three floors of the building for its national headquarters and Ottawa production centre, and the House of Commons, which occupies the remaining floors. In an email to OBJ this week, a PSPC spokesperson said the department acquired the building to provide “long-term accommodations” for House of Commons staff, adding the purchase was part of PSPC’s “long-term vision and plan” for the Parliamentary Precinct. The building is a “critical space for the House of Commons and a sound investment to support future parliamentary operations that will result in long-term cost savings,” the statement added. PSPC said most of the space is used by House of Commons administrative staff in areas such as digital services, real property and client care. The department owns more than 40 million square feet of real estate in the National Capital Region, including the one-million-square-foot C.D. Howe Building just a few blocks from 181 Queen St.

Other purchase options

It also has options to purchase two other nearby buildings – a 305,000-square-foot office complex at 131 Queen St. it currently leases from Morguard and the 400,000-square-foot Thomas D’Arcy McGee Building at 90 Sparks St., which is owned by Larco Investments. PSPC’s decision to acquire 181 Queen St. comes less than a year after it announced it was looking to sell a number of aging properties in the city. The department released its disposal list of 10 Ottawa buildings last spring. The list includes notable properties such as the L’Esplanade Laurier complex and the CBC’s former headquarters at 1500 Bronson Ave. A PSPC spokesperson told OBJ last May the decision to put the buildings on the block was part of its “long-term real estate portfolio plan to optimize the office space under our responsibility, lower operating costs and reduce greenhouse gas emissions.” The department said this week it “continues to assess and optimize the performance of our office portfolio as our clients’ long-term office plans evolve.” In addition, PSPC told OBJ it plans to start work later this year on a decade-long project to restore and modernize a prominent collection of historic buildings near Parliament Hill. The department says construction work on the block facing Parliament Hill bounded by Wellington, Sparks, Metcalfe and O’Connor streets – known as “Block 2” – is expected to begin this fall.