UPDATE 1-Dream Office REIT looking to sell Scotia Plaza stake - sources
(Adds details on tenant movement)
By John Tilak and Allison Lampert
TORONTO/MONTREAL Feb 26 (Reuters) - Dream Office Real Estate Investment Trust is working with TD Bank and CBRE to sell half of its stake in Toronto's Scotia Plaza, Canada's second tallest office building, according to two sources familiar with the matter.
The potential sale comes about four years after Dream Office REIT, then called Dundee REIT, acquired two-thirds of the 2 million square-foot Scotia Plaza complex. H&R REIT bought the rest of the stake at the time. The C$1.3 billion ($961.68 million) deal marked the highest price ever paid for a Canadian office building.
Dream Office is now looking to sell half its stake, leaving Scotia Plaza potentially in the hands of three different owners with equal positions, according to the sources, who requested anonymity because the matter is not yet public.
Under a possible arrangement, Dream could seek to retain management control, one of the sources said, adding that it would depend on the outcome of the final deal terms with the buyer.
Strong interest is expected from foreign buyers and Canadian pension funds, the sources said.
However, Scotia Plaza is facing the prospect of jump in its vacancy rate, now about 2 percent, because of tenant migrations, according to a real estate industry source, who asked not to be identified because of the sensitivity of the issue.
Borden Ladner Gervais, one of Canada's largest law firms, confirmed on Friday it is planning to move out of Scotia Plaza this year. Continued...