Morguard Sells Ottawa Leasehold at 131 Queen Street for $148.2 Million

what happened

Morguard Corporation has finished selling its leasehold stake in the Ottawa office property at 131 Queen Street to the federal government's Public Services and Procurement Canada, according to TradingView. The deal brought in gross proceeds of $148.2 million. The buyer used a purchase option written into the lease, with the price set at fair market value. Morguard had co-built the Class A asset in 2006 alongside a development partner, and the federal government already rented the space.

After paying off $29.6 million of property debt and covering closing costs, the transaction left about $118.2 million in net cash. That money will help fund the company's recently announced purchase of a multi-suite residential portfolio. The sale price was 34% above Morguard's earlier IFRS fair value, measured before the lease-based valuation adjustment.

why it matters

For markets, this is a company-specific real estate transaction of limited reach, mainly relevant to Morguard's investors and Canadian property stakeholders. It shows how a purchase option in a lease can lock in a value above the book carrying amount, with the proceeds redirected into residential acquisitions.

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