Just weeks after officially opening with a headline-grabbing celebration that featured live performances from the likes of Blue Rodeo and Serena Ryder, software giant Kinaxis’s new headquarters has changed hands in a deal valued at more than $60 million.
Ottawa’s Taggart Group of Companies recently sold the 163,000-square-foot office complex at 3199 Palladium Dr. in Kanata to Mississauga-based Morguard for $64.5 million.
Taggart designed and constructed the five-storey building, which is fully leased to Kinaxis. The publicly traded tech firm, which has seen demand for its supply-chain management software soar during the pandemic, moved in during the first quarter and christened the new office in style with a private party for more than 1,000 employees and their guests in early June.
Derek Howe, vice-president of development at Taggart Realty Management, said the Taggart Group decided to put the property on the market after a “strategic review” of its assets.
Howe said Taggart typically focuses on developing and leasing retail and residential-class buildings, adding class-A office space like the Kinaxis complex in the Kanata West Business Park is not a “core asset class” for the company.
'A bit of an anomaly'
“This was a bit of an anomaly for us, so it went to market and we were very fortunate to have a wonderful partner in Morguard Corporation that transacted with us,” he told OBJ.
The acquisition adds to Morguard’s growing stable of properties in the National Capital Region.
The firm – which owns and manages more than $19 billion worth of assets across North America – is the region’s second-largest commercial property manager behind Colonnade BridgePort with a total portfolio of more than 5.3 million square feet.
Among the notable properties it manages are the St. Laurent Shopping Centre and Performance Court at 150 Elgin St., best-known as the site of Shopify’s former headquarters.
A Morguard spokesperson said an executive from the company was not immediately available for comment on Wednesday afternoon.
Cushman & Wakefield associate vice-president Scott Brooker, who brokered the deal along with the firm’s senior Ottawa vice-president Nathan Smith, said the property attracted “lots of interest from a variety of capital sources.”
Calling the office complex “a showpiece building,” Brooker said the presence of a marquee tenant in Kinaxis plus its close proximity to Highway 417 and retail amenities such as the Tanger Outlets mall made it a relatively easy sell. The Palladium Drive property also includes enough space for another large-scale office should Morguard opt to develop it.
"It’s a brand-new building; it’s best in class."
“It’s a brand-new building; it’s best in class,” Brooker said. “So it’s really no surprise that we got the level of interest that we did.”
The deal follows a series of other recent high-profile office transactions in Ottawa, including the separate sales of a pair of downtown office towers on Cumberland and Metcalfe streets that changed hands for a combined total of nearly $60 million.
Brooker said the capital remains a “desirable” commercial real estate market despite rising interest rates and global economic turbulence. The veteran broker said the city’s thriving government and tech sectors act as a stabilizing force to make the region a “safe haven for capital when things are a little bit uncertain in other markets.”
Coming off a record-setting year for commercial transactions in 2021, Ottawa is on track to challenge that mark again in 2022, Brooker predicted.
“I don’t think we’ll see much of a slowdown in activity,” he said.
“I think Ottawa has been a great marketplace in terms of its stability compared to other major metropolises in Canada,” he said. “There’s lots of interest in the marketplace.”
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