The class A office block, located just across the street fromHeritage Square LRT station, has 298,081 sf of leasable space ofwhich 99% is occupied. Tenants include Jacob's Engineering Group,the Co-operators and Credit Union Central Alberta. The propertyalso includes parking facilities and an indoor atrium which issurrounded by amenities such as a fitness club and arestaurant.

Current rents at Heritage Square range from $10 to $14 per sfand are "significantly below current market levels," says Westfieldchief executive Armin Martens in a statement. The southwestsuburban Calgary office market, he adds, now commands rents rangingfrom $18 to $25 per sf.

"We believe this presents an excellent opportunity to realize asignificant lift in this property's net operating income over thenext several years, which will positively impact the REIT's cashflows and payout ratios for the benefit of our unitholders,"Martens explains. The purchase will be made with cash, a three-year$5-million loan bearing interest at 6% per annum and the proceedsof a new 10-year $39.65-million mortgage. The mortgage interestrate has yet to be fixed but it's expected to be 5.55% per year.It's anticipated the transaction will close at the end of June.