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This article was published 27/11/2017 (1189 days ago), so information in it may no longer be current.
The competition for Class A office tenants is heating up, as another tower at Portage and Main gets a multimillion-dollar upgrade in the face of a spirited challenge from the downtown’s "new dynamic epicentre" — the $400-million True North Square development.
Harvard Developments of Regina, which owns the 33-storey 201 Portage office tower on the northwest corner of the intersection, has spent just under $5 million on an overhaul of the building’s underground concourse and food court.
The renovation, which got underway late last winter and will be completed within two weeks, involves a complete redo of the food court, and the construction of a new conference centre for tenants.
"We basically gutted everything," Harvard’s vice-president of leasing, Roseanne Hill Blaisdell, said. "The entire (area) there is all brand new — all new flooring, ceilings, walls, tiles and all new finishes."
It is the second tower at the intersection to undergo such an upgrade in the last two years. Winnipeg-based Artis Real Estate Investment Trust has spent about $25 million installing a new exterior to its 300 Main tower, which is located on the southwest corner.
"With Portage and Main and True North, the gloves are off," said Don White, executive vice-president, national investment services, with the Winnipeg office of Colliers International.
"And tenants are going to benefit, because there are going to be nicer buildings and better amenities as a result of that."
White said the scheduled opening next summer of True North’s 17-storey, Class A office/retail tower at 242 Hargrave St. is forcing owners of some of the downtown’s other Class A towers to up their game.
"I think that is one of the biggest stories in the (Winnipeg) real estate market right now," he added. "New competition (from) the new supply at True North is making everybody better, and that’s what competition is supposed to do."
True North has lured two major tenants away from Portage and Main — the law firm Thompson Dorfman Sweatman LLP, which will be leaving 201 Portage, and Scotiabank, which will move some of its operations from the smaller office building at 200 Portage Ave.
"I almost wonder if at Portage and Main, they’re now almost spending money to play catch-up," said Douglas McDonald, principal of McCOR Management, which manages the 17-storey Newport Centre office tower at 330 Portage Ave. "They had that (Class A) market captured, and now there is a shift in the tenants and what they are desiring."
McDonald said the new owners of Newport Centre — KingSett Real Estate Growth LP No. 6 and CCI Corpfin Capital Acquisition Fund 1 LP — hope to cash in on that tenant shift by spending $8 million to $9 million over the next three to five years on renovations to their building, which is one block north of True North Square.
"With tenants moving from Portage and Main to True North Square, there’s an opportunity," McDonald said.
"There will be tenants who will want to be in this zone and this location that don’t necessarily want to pay new-office lease rates. So there’s an opportunity to capture that target market."
McDonald said Newport Centre is ideally located because it’s surrounded by four new, or fairly new, developments — True North Square, the Manitoba Hydro head office, the 311 Portage Avenue at Centrepoint mixed-use development, and the Bell MTS Centre.
"We’re at centre ice here... so the plan is to do some repositioning of the asset and add value to the asset."
The upgrades will include changes to the bottom two floors.
"We’re exploring several options with the architect. They could include moving the lobby, or it could include incorporating a new restaurant... and some new signage."
They may also light up the exterior of the building.
"We want, when people drive by, to go, ‘Oh, I never noticed that building before.’ It’s not going to be a full re-glazing like Artis REIT did with their building, but we’re definitely going to enhance the look of it."
The new anchor tenant in 201 Portage’s underground concourse will be a 2,400-square-foot Mercatino "market-style restaurant."
The new outlet, which is expected to open in the first week in December, will specialize in freshly made breakfast, lunch and desserts. There won’t be any in-house seating, because the restaurant faces the concourse’s 75-seat common area.
Although this is the Calgary-based Mercatino Group of Companies’ first Winnipeg outlet, president Amit Vadan said it may not be the last. Vadan said the company is in discussions with several other downtown developers — he wouldn’t say which ones. It may also open some suburban outlets, he said, noting two of its four Calgary restaurants are downtown.
"We certainly want to keep our options open. We think Winnipeg is a great market, and we think it’s right for us to look at other expansion opportunities."
Other vendors that have leased space in the renovated 201 Portage tower concourse include Bon Sushi, Carbone Coal-Fired Pizza, and International News. Hill Blaisdell said the vendors will open on a rolling basis, starting with Mercatino.