Success Stories

MEG Energy Corp.

Calgary, Alberta
296,159 SF
Cresa Calgary
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Client Objectives

MEG Energy Corp. (“MEG”) engaged Cresa Calgary (“Cresa”) in 2011 to review their corporate real estate.  MEG had leased 131,258 square feet (“SF”) in Centennial Place – East Tower being all of 9 thru 15; they subsequently subleased the 9th floor until 2016.  Cresa worked with MEG to analyze their immediate and projected growth and space utilization which ultimately determined that they required significantly more office space than initially planned for both on an immediate and long term basis.  Cresa helped MEG secure an additional 65,930 SF of space on floors 6 – 8 from the tenant below MEG in the building.  As part of this negotiation, MEG also acquired ROFO and ROFR rights on floors 3 – 5.  In late 2012, Cresa assisted MEG in the negotiation for the surrender and termination of the 21,884 SF on the 9th floor which MEG had previously subleased.  They had a need for the space and were able to re-acquire it much earlier than anticipated. Throughout this review process it became clear to MEG that Centennial Place would not accommodate them for the long term.  The low rise block of the building which MEG already occupied and had rights on, left insufficient room for growth.  The mid and high rise blocks of the building provided few, if any options to MEG due to prior leasing commitments.  Even with the potential acquisition of floors 3 – 5, the additional SF would only give MEG the necessary space to provide for their growth to 2019, assuming the most conservative growth scenario. 

Cresa Team Members

Results

MEG’s long term growth forecasts led to the determination that approximately 300,000 SF would be required with additional expansion options to facilitate the future growth of the company.  Cresa provided a market survey for options for existing buildings as well as new developments.  MEG and Cresa quickly came to the realization that a newly constructed building would be the best option to provide them with the SF and future growth options they required.  MEG’s existing Landlord, Oxford Properties Group, was marketing a new development adjacent to the Centennial complex that held all of the same geographical amenities that attracted MEG to Centennial Place.  MEG, with the help of Cresa, negotiated with Oxford Properties and secured a deal to kick-off the development of a new AA office tower known then as Eau Claire Tower.  Delivery of the new premises is Q1 2016 with commencement set for early Q1 2017.  The negotiation concluded and provided MEG the ability to attain naming rights for the building, the ability to construct a monument in the lobby, 5 and 10 year expansion options, and ROFO/ROFR rights throughout the entire building along with a very aggressive and financially attractive package including rates, improvement allowances and landlord’s work.  Based on the timing of the new building MEG was still not completely convinced that they would have enough space within Centennial Place for the short term.  An opportunity presented itself for the 5th floor ROFO space and MEG was successful in acquiring 21,873 SF for growth.  With that floor under their control, MEG now has the confidence that their growth will be provided for, and will be able to remain intact as one company in contiguous premises both now in their current location, and later in the new development. 

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