Key Takeaways
- • Desjardins' DGAM Canadian Private Real Estate Fund and Desjardins Group Pension Fund acquired the 70 York St. office tower in downtown Toronto for $134.6 million in an off-market transaction from KingSett Senior Mortgage Fund, with a 60:40 partnership structure between the two Desjardins entities.
- • The 17-storey, 210,000-square-foot Class A office building, completed in 1985 and fully renovated, is positioned on Toronto's PATH pedestrian network near Union Station in the core financial district bounded by University, Adelaide, Bay, and Front streets.
- • The building has achieved 92% occupancy following KingSett's stabilization efforts after HSBC vacated as the primary tenant approximately three years ago; approximately 115,000 square feet (55% of the building) have been leased since KingSett acquired the asset in 2024.
- • The transaction reflects a 6.5% capitalization rate and represents a strategic entry point for Desjardins to establish itself as a "prime top-quartile player" in Toronto's office market, with executives characterizing the acquisition as a "once-in-a-lifetime opportunity" for prime central business district real estate.
- • The deal is positioned as the largest office transaction in Toronto's financial core for the year, demonstrating institutional investor appetite for stabilized, well-located Class A assets despite broader office market headwinds.
Summary
Desjardins has completed the acquisition of 70 York St., a prominent downtown Toronto office tower, through a joint venture between its DGAM Canadian Private Real Estate Fund and the Desjardins Group Pension Fund. The purchase price of $134.6 million was structured as an off-market transaction with KingSett Senior Mortgage Fund, the vendor. The two Desjardins divisions negotiated a 60:40 partnership to acquire the asset, with Richard Dansereau, vice-president and head of real estate investments at DGAM, stating that the trophy-quality property "was impossible for us to acquire alone" and represented "a great once-in-a-lifetime opportunity to acquire really prime office property in Canada's best office market."
The 17-storey property spans 210,000 square feet and was constructed in 1985. It occupies a premium location within Toronto's financial core, situated on the PATH indoor pedestrian network with immediate proximity to Union Station. Dansereau emphasized the scarcity value of such properties, noting that the quadrant bounded by University, Adelaide, Bay, and Front streets is "characterized by huge properties that we otherwise would never be able to afford." The building is fully renovated, institutionally managed, and currently operates at 92% occupancy.
KingSett acquired 70 York following a foreclosure after the building's primary tenant, HSBC, vacated approximately three years ago, reducing occupancy to 80%. Despite challenging market conditions, KingSett successfully stabilized the asset and brought occupancy above 90% prior to the sale. According to transaction data, approximately 115,000 square feet—representing 55% of the building's total area—has been leased since KingSett assumed control in 2024. The transaction implies a 6.5% capitalization rate and positions Desjardins as a significant institutional player in Toronto's office market. Executives characterized the deal as the largest office transaction in Toronto's financial core for the year and as establishing Desjardins' credential as a top-quartile investor in the region.
The 17-storey property spans 210,000 square feet and was constructed in 1985. It occupies a premium location within Toronto's financial core, situated on the PATH indoor pedestrian network with immediate proximity to Union Station. Dansereau emphasized the scarcity value of such properties, noting that the quadrant bounded by University, Adelaide, Bay, and Front streets is "characterized by huge properties that we otherwise would never be able to afford." The building is fully renovated, institutionally managed, and currently operates at 92% occupancy.
KingSett acquired 70 York following a foreclosure after the building's primary tenant, HSBC, vacated approximately three years ago, reducing occupancy to 80%. Despite challenging market conditions, KingSett successfully stabilized the asset and brought occupancy above 90% prior to the sale. According to transaction data, approximately 115,000 square feet—representing 55% of the building's total area—has been leased since KingSett assumed control in 2024. The transaction implies a 6.5% capitalization rate and positions Desjardins as a significant institutional player in Toronto's office market. Executives characterized the deal as the largest office transaction in Toronto's financial core for the year and as establishing Desjardins' credential as a top-quartile investor in the region.
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