Kastel Holdings has acquired Edmonton’s Empire Building, a vintage 11-storey office tower in the city’s downtown core.
The 108,800-square-foot building, built in 1962, will continue to house offices, with retail on the main floor, Boris Javorski, president of Kastel Holdings, told RENX.
The deal closed in mid-March, with no sale price disclosed. Avison Young brokered the sale, with the vendor being two pension funds based in Toronto.
Local firm Kastel is moving its own offices into the Empire from the west end of the city, Javorski said. The company plans to upgrade the lobby and add an upscale coffee bar to the main floor, which is located at 10080 Jasper Avenue in the heart of Edmonton’s financial district.
Javorski said other amenities, including a fitness centre with sauna and steam room, and a rooftop patio will also be added to attract tenants.
New owner sets out to attract tenants
Corey Gay, principal with Avison Young in Edmonton, said recent building transactions in the downtown indicate a return to vibrancy for a city which was hard hit by the COVID-19 pandemic.
The Empire Building was at 40 per cent occupancy at the time of the transaction, he said.
During COVID the class-B building, which has a smaller floor plate and caters to professional services firms such as legal offices, real estate and insurance companies, was particularly impacted by the working-from-home trend, Gay said.
“When you take a building like the Empire and you start renovating the main floor and bringing in a coffee bar and some other tenants on the main floor, that’s going to improve that intersection all the way around,” he said.
The Empire, with a lobby area featuring original marble and granite finishes, was renovated in the early 2000s, Gay said, with art added throughout the building and a different colour scheme on each floor to achieve a boutique hotel appearance.
Tenants on the main floor include Bistro Praha, a European restaurant with a long history in the city downtown, and a pizza restaurant.
The building is adjacent to a city light rail transit stop.
Gay said the Empire lease rates were $16 per square foot but the new owner has a “more aggressive” strategy aimed at attracting tenants by dropping the rates.
Javorski said in the two weeks since the Empire lease rates have been reduced the building has attracted two local law firm tenants.
Javorski said he hopes to attract some tech firms into the tenant mix as well. The Empire is directly across Jasper Avenue from the office of AMII (the Alberta Machine Intelligence Institute), a premier artificial intelligence company.
Kastel Holdings diversifying its portfolio
Kastel Holdings owns four hotels in Grande Prairie, Whitecourt and Bruderheim, Alta., and a resort property in Fairmont Hot Springs. B.C.
“We specialize in value-added assets. . . . We also own Boardwalk Burgers and Fries (Canada), a premium burger franchise which has 30 locations, and Lava Grill, a Mediterranean concept (eatery), with six locations, and some other businesses,” Javorski said. “We’re trying to diversify.”
Javorski said he has faith in Edmonton’s downtown. Alberta’s population is increasing thanks to immigration and other businesses and restaurants are coming in, he said.