The Bow – a two million sq. ft. tower that once was meant to symbolize Calgary’s clout as a global energy hub but later became a casualty of the crash in crude prices – is being sold.

H&R Real Estate Investment Trust announced the $1.67-billion “strategic transaction” on Tuesday, which includes the sale of the Bow, as well as the sale of the 1.1 million sq. ft. Bell office campus located in Mississauga, Ont, to Oak Street Real Estate Capital. The transaction also includes a lease financing arrangement for the Bow with Deutsche Bank Credit Solutions and Direct Lending.

“Today’s announcement is evidence of our commitment to our strategic repositioning and is a crucial step forward on our path to achieving a more simplified structure,” said Thomas Hofstedter, president and chief executive officer of H&R REIT, in a news release.

The combined gross proceeds from selling the two buildings is approximately $1.47 billion, the real estate trust said.

H&R said it will retain 15 per cent of net rent from the lease of energy giant Ovintiv Inc., formerly Encana Corp., ownership of the adjacent lands and will retain the management contracts of the Bow and Bell Campus, at a combined value of about $203 million.

The transaction significantly reduces H&R’s Calgary office exposure in its portfolio from nine per cent to three per cent. However, H&R will retain an option to repurchase the Bow and its land for $735 million once Ovintiv’s lease expires in May 2038.

The sale of the two large office spaces also comes amid a widespread pandemic-inspired hybrid work model.

Many large Canadians companies have announced preliminary plans to allow employees to return to the office in-person beginning in mid-September as part of a hybrid work model.

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