Strategic Group, one of Calgary’s largest integrated property companies, has put 50 of its co-owned properties into creditor protection citing “a high office vacancy rate which, according to industry forecasting, will not normalize for many years to come.”
“Alberta’s severely negative economy has seen our company try to battle the storm for the past five years, said Strategic’s CEO Riaz Mamdani. “Despite my teams’ innovative approach to an ever-changing landscape, we must immediately deal with the current market conditions and pessimistic outlook for the real estate office market.”
Given the prolonged high office vacancy in Alberta, the company decided to develop a plan “for an orderly disposition of specific assets to ensure a sustainable future for Strategic Group.”
Strategic Group’s property management, service companies, and development and construction business will not be affected. Strategic Group will continue to manage all of its properties. Projects currently under construction are not impacted.
“We are focused to create a strong new future for Strategic Group and all of our stakeholders,” said Mr. Mamdani. “It is our desire to be a vibrant contributor to our city and province.”
Strategic said its sizable exposure to the office market is a “significant risk for the longevity of the company.” Since mid-2014, 78 tenants occupying 573,333 square feet did not survive as going concerns or did not remain in their leased premises, despite being under lease agreements.
Approximately 354 employees of Strategic Group work in Alberta; which includes 184 at Strategic Real Estate Management, 130 at Strategic Maintenance Limited, with the balance working for another entity not involved in these proceedings. A company spokesman said no layoffs are planned.
In recent years, Strategic Group has diversified its real estate to include a viable multi-family rental portfolio. This business strategy was designed to support a long-term successful future for the company.
Strategic Group is a privately held real estate company headquartered in Calgary. Its operations include property management, leasing, development, re-development, repurposing, and construction. Strategic Group owns and manages a national office, retail, and apartment portfolio across the country.
LIST OF AFFECTED PROPERTIES
a. 1112-1124 Limited Partnership – 1112-1124 Capital Corp.
b. 20/20 Limited Partnership – 20/20 Capital Corp. (Co-Owned)
c. 411 Limited Partnership – 411 Ltd.
d. 534 Limited Partnership – 534 Capital Corp.
e. 550 Limited Partnership – 550 Capital Corp. (Co-Owned)
f. 744 (2011) Limited Partnership – 744 (2011) Capital Corp.
g. 808 Limited Partnership – 808 Capital Corp.
h. 926 Limited Partnership – 926 Capital Corp. (Co-Owned)
i. Airdrie Gateway Block 2 Limited Partnership – Airdrie Gateway Block 2 Capital Corp. (Co-Owned)
j. Airways Business Plaza Limited Partnership – Airways Business Plaza Capital Corp.
k. Aura Limited Partnership – Aura Capital Corp. (Co-Owned)
l. Avenida Village Limited Partnership – Avenida Village Ltd. (CoOwned)
m. Blackfoot Centre Limited Partnership – Blackfoot Centre Ltd. (Co-Owned)
n. Bonavista Square Limited Partnership – Bonavista Square Ltd. (Co-Owned)
o. Center Street Limited Partnership – Center Street GP Ltd. (CoOwned)
p. Centre 1000 Limited Partnership – Centre 1000 Capital Corp.
q. Centre Eleven Limited Partnership – Centre Eleven Capital Corp.
r. Centro 2102 Limited Partnership – Centro 2102 Capital Corp. (Co-Owned)
s. Deerfoot 17 Limited Partnership – Deerfoot 17 Corp.
t. Deerfoot Court (2011) Limited Partnership – Deerfoot Court (2011) Capital Corp.
u. First Street Plaza (2006) Limited Partnership – First Street Plaza GP Ltd.
v. Glenmore Commerce Court Limited Partnership – Glenmore Commerce Court Capital Corp. (Co-Owned)
w. Inglewood 9th Avenue Limited Partnership – Inglewood 9th Avenue GP Ltd. (Co-Owned)
x. Kensington Building Limited Partnership – Kensington Building Capital Corp. (Co-Owned)
y. Louise Block Limited Partnership – Louise Block Capital Corp.
z. Macleod Place Limited Partnership – Macleod Place Ltd.
aa. Mayfield Limited Partnership – Mayfield Capital Corp.
bb. Mission Centre Limited Partnership – Mission Centre Inc. (CoOwned)
cc. Airdrie Creekside Limited Partnership – Airdrie Creekside Capital Corp.
dd. Torode Strategic 1129 Limited Partnership – Torode Strategic 1129 GP Ltd.
ee. One Six Limited Partnership – One Six Capital Corp. (Co-Owned) 1
ff. Parallel Centre Limited Partnership – Parallel Centre Ltd. (CoOwned)
gg. Paramount Building Limited Partnership – Paramount Building Ltd.
hh. Parkwood/Eastgate Limited Partnership – Parkwood/Eastgate Capital Corp.
ii. Pegasus Business Park Limited Partnership – Pegasus Business Park Ltd.
jj. Stony Plain Limited Partnership – Stony Plain Capital Corp. (CoOwned)
kk. Petro Fina Building Limited Partnership – Petro Fina Capital Corp. (Co-Owned)
ll. Petro West Limited Partnership – Petro West Ltd.
mm. Place 9-6 Limited Partnership – Place 9-6 Ltd. (Co-Owned)
nn. Shelbourne Place Limited Partnership – Shelbourne Place Ltd.
oo. Stella Place Limited Partnership – Stella Place Capital Corp. (CoOwned)
pp. Strategic Centre Limited Partnership – Strategic Centre Ltd.
qq. Sundance Place II 1000 Limited Partnership – Sundance Place II Ltd. (Co-Owned)
rr. Sundance Place II 3000 Limited Partnership and Sundance Place II 4000 Limited Partnership – Sundance GP (Co-Owned)
ss. Sundance Place II 6000 Limited Partnership – Sundance GP (CoOwned)
tt. Sundance Place Limited Partnership – Sundance Place Ltd. (CoOwned)
uu. Sunpark Place Limited Partnership – Sunpark Place Ltd.
vv. Airdrie Gateway Block 3 Limited Partnership – Airdrie Gateway Block 3 Capital Corp.
ww. Wesley Church Building Limited Partnership – Wesley Church Building Inc.
xx. Willow Park Limited Partnership – Willow Park Capital Corp.
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