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Feds to acquire 14-storey office tower at 131 Queen St. for $148M

February 24, 2026

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As civil servants prepare to head back to the office four days a week, the federal government has acquired a downtown office tower in one of the city’s largest real estate transactions in recent history. Public Services and Procurement Canada has agreed to purchase the 14-storey tower at 131 Queen St. from Morguard Corp. for $148.2 million in a deal that’s expected to close before the end of August. Morguard announced the sale last week in its year-end financial report, although it did not identify the buyer. PSPC told OBJ two years ago it had an option to purchase the building, and confirmed this week it is acquiring the property. In an email to OBJ, PSPC spokesperson Jean-François Létourneau said the 20-year-old building was “constructed for government use and will continue to serve as a key administrative facility to support the long-term accommodation of the House of Commons.” Morguard did not immediately respond to OBJ’s request for more details on why it decided to sell the property. It’s the second time in two years that PSPC, the region’s largest owner and occupier of office space, has acquired a downtown office building from Morguard. In March 2024, the federal department exercised an option to purchase an 11-storey tower at 181 Queen St. from the Mississauga-based real estate firm for $125.3 million. PSPC said at the time that the acquisition of 181 Queen, which is home to CBC headquarters and also houses House of Commons staff, was part of its “long-term vision and plan” for the Parliamentary Precinct. PSPC did not address this week whether the decision to purchase 131 Queen St. was related to its decade-long project to restore and modernize a prominent collection of historic buildings near Parliament Hill. But Shawn Hamilton, a principal at Proveras Commercial Realty, told OBJ Tuesday the acquisition appears to be part of a government strategy to gain control of more real estate near the properties bounded by Wellington, Sparks, Metcalfe and O’Connor streets that the feds are renovating. “It makes sense to me,” Hamilton said. “It’s, in my view, entirely a strategic play.” PSPC owns more than 65 million square feet of office space across the country, with more than half of that real estate located in the National Capital Region. Its decision to acquire 131 Queen St. comes just months before federal public servants will be mandated to return to the office a minimum of four days a week starting July 6. A Treasury Board spokesperson told Radio-Canada last week there might not be enough room in some offices to accommodate all the returning workers this summer. But Treasury Board President Shafqat Ali said in an interview with CBC Monday he believes there will be enough office space for everyone. Hamilton said he’s not convinced the feds’ return-to-office campaign will go smoothly. A large chunk of federally owned office space in the downtown core is in “critical or poor condition,” he said, “because the federal government hasn’t been able to secure its own internal funding to look after the buildings.” Hamilton said he worries that 131 Queen St. will “gradually decay” like much of the government’s other downtown office inventory, adding it’s fair to question whether buying another building is the best use of taxpayers’ money when so much of the feds’ existing office portfolio is in urgent need of repair. “I’m hoping they also find capital to invest in their own infrastructure in downtown Ottawa,” he added. “But strategically, pricewise, no alarm bells are going off.” The acquisition comes as other large downtown office buildings that were on the market, including 150 and 275 Slater St., have failed to change hands. Hamilton said that while the feds “have been chipping away strategically” at buying buildings near the Parliamentary Precinct, he doesn’t expect to see a flood of big office sales to private-sector buyers any time soon. “I think institutional investors are waiting to see what the future of the government footprint is in downtown Ottawa,” he said. “Right now, there are so many different conflicting stories of (the federal government’s office needs). I think now that there’s been the (four-day-a-week) return-to-office mandate, I think it will take a few months to sort of see how things play out. “Having some sort of stability and understanding of what’s happening will be attractive to institutional investment.” Morguard remains one of the capital’s largest owners of office space, with a portfolio of more than 1.9 million square feet. Its Ottawa holdings include a 50 per cent stake in Performance Court at 150 Elgin St., where Shopify was headquartered until it vacated the building in 2020, as well as a 50 per cent share of Jean Edmonds Towers at 300 Slater St.