A major Canadian pension fund and Morguard Real Estate Investment Trust have agreed to acquire a 600,000 square foot Class A office portfolio in downtown Ottawa.

The total acquisition cost is expected to be $210 million and closing of the transaction is scheduled for mid December 2006.

Tim Walker, Morguard REIT’s chief financial officer, tells Benefits Canada that the pension fund involved is based in Ontario and it is not OMERS or OTPP, but would not give any further details.

The portfolio includes three office towers which are currently 99% leased with 79% of the portfolio leased to government tenants under long-term leases.

Also included in the acquisition is an adjacent 29,934 square foot parcel of development land with density approval to build an additional 339,000 to 390,000 square foot office tower.

Click here to read A trustee’s guide to alternative investments – part 6: building on real estate.

To comment on this story email craig.sebastiano@rci.rogers.com.