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Old Posted Dec 3, 2015, 6:04 PM
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Commercial Real Estate News

BridgePort, Colonnade to merge, become city's largest landlord

David Sali, OBJ
Published on November 24, 2015


Two of the city’s leading property managers announced Tuesday they are joining forces to become the largest commercial landlord in Ottawa.

Colonnade Management and BridgePort Group of Companies said they have agreed to merge with an eye toward expanding their combined portfolio in the Greater Toronto Area.

The amalgamated company, which will be known as Colonnade BridgePort, will offer a range of services, including property management, leasing, development management and asset management.

“Toronto’s obviously a very large growth market for real estate,” said Colonnade president Steve Kaminski. “For us, we’re not really there yet, so it’s something that is a core part of the strategy, for sure.”

Colonnade is currently the third-largest property management firm in Ottawa with a commercial portfolio totalling about 4.2 million square feet, according to OBJ’s Book of Lists. The new company will have a combined portfolio of about 5.5 million square feet at 90 properties in the National Capital Region, making it the largest commercial landlord in the city.

Mr. Kaminski said Colonnade and BridgePort, which have a total of more than 90 employees, are “very like-minded in the way that we approach the market” and felt they had a better chance of succeeding in their Toronto expansion if they worked together.

“We just think it’s a good fit,” he said. “For us, long-term steady growth is really the key. Between BridgePort and ourselves, I think we have a much greater likelihood of good, long-term steady growth.”

BridgePort, which manages more than 6,000 residential properties in addition to its 18 commercial holdings, has a wide variety of tenants and prefers a buy-and-hold strategy, managing director Hugh Gorman told OBJ in a 2013 interview.

“Our job is to be investors in real estate first and foremost ... I wouldn’t say we’re turners of capital for the sake of turning capital,” he said. “We’re not trying to assemble a portfolio to take it public or sell to a pension fund.”

Mr. Kaminski said the company would release more details about the deal in the new year.

“There’s lots that we still have to work through in terms of our longer-term strategy,” he said.


The players:

BridgePort Group of Companies
Key local executives: Hugh Gorman, partner and managing director; Pierre Hurteau, partner
Key properties: 81 Metcalfe St., 319 McRae Ave., 1600 Merivale Rd., 580 Terry Fox Dr.
Size of local commercial portfolio: 1 million square feet of commercial; 6,000 residential units under management (as of 2013)
No. of commercial properties managed locally: 18
(Source: Bridgeport Group of Companies)

Colonnade Management
Key local executives: Steve Kaminsky, president; Greg Johnston, vice-president of property management
Key properties: 106 Colonnade Dr.; 1150 Cyrville Rd.; 2405 St. Laurent Blvd.; 250 Tremblay Rd.
Size of local commercial portfolio: 4.2 million square feet
No. of commercial properties managed locally: 72
(Source: OBJ Book of Lists)

http://www.obj.ca/Real-Estate/Non-re...est-landlord/1
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Old Posted Oct 19, 2016, 5:29 PM
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Struggling to fill office space, east Ottawa landlords await LRT completion

OBJ Staff
Published on October 17, 2016


Office vacancy rates east of the Rideau River could drop as the completion date of Ottawa’s Confederation LRT Line draws closer, according to a local commercial real estate services firm.

The Ottawa East submarket contains slightly less than 10 per cent of the city’s supply of office space and has historically posted some of the area’s highest vacancy rates.

In a report released Monday, the Ottawa office of Colliers International said the area had a challenging third quarter as the vacancy rate rose from 13.6 per cent at mid-year to 15.2 per cent at the end of September.

“The region continues to struggle in attracting new tenants to the area, especially with competitive rents downtown,” Colliers said.

However, the real estate firm said that may change in the coming months as tenants consider how the completion of the Confederation Line, which will run as far east as Blair Station at the Gloucester Centre, will improve transit services.

The area is already due for a major facelift as RioCan proposes several high-rises, including a 30-storey residential tower. Across the street, large-format retailer Costco is planning to move its Gloucester location to Shoppers City East.

The citywide office vacancy rate continues to creep upwards and ended the third quarter at 12.7 per cent, Colliers reported. That’s up from 12.4 per cent at mid-year and 11.9 per cent a year earlier.

http://www.obj.ca/Real-Estate/Non-re...T-completion/1
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Old Posted Oct 20, 2016, 11:19 PM
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It will take quite some effort for the Confederation Line to help office vacancies in the area.

Most of the offices are strung along Coventry Road which despite having two LRT stations on it, is not particularly accessible by LRT due to how pedestrian hostile the area is.

LRT will only make a difference if the city rejigs the pedestrian realm of Coventry and St. Laurent to be more friendly to walk-up ridership for the LRT.
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Old Posted Oct 26, 2016, 10:11 PM
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According to a source of mine, the old theatre in the World Exchange Plaza has been leased to a tech company for conversion to office space with occupancy in mid-2017.
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Last edited by 1overcosc; Oct 26, 2016 at 10:36 PM.
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Old Posted Oct 27, 2016, 8:46 AM
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Originally Posted by 1overcosc View Post
It will take quite some effort for the Confederation Line to help office vacancies in the area.

Most of the offices are strung along Coventry Road which despite having two LRT stations on it, is not particularly accessible by LRT due to how pedestrian hostile the area is.

LRT will only make a difference if the city rejigs the pedestrian realm of Coventry and St. Laurent to be more friendly to walk-up ridership for the LRT.
Apparently right now pavement (aka sidewalk) is being added on St Laurent across the street from the mall.
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Old Posted May 29, 2017, 3:36 PM
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‘Banner year’ ahead for Ottawa CRE transactions: CBRE

Don Wilcox | Commercial | Property Biz Canada | 2017-05-18

The commercial real estate investment market in the National Capital is poised for a “banner year” in 2017, according to the CBRE Ottawa Market Outlook.

But many building owners – or purchasers with plans to redevelop — in the city have some work ahead if they want to capitalize on Ottawa’s large, and rapidly growing, tech sector.

It’s the largest downtown tenant outside of federal government agencies, and poised to continue to expand if businesses can find suitable space.

During CBRE’s outlook event on May 9, managing director Shawn Hamilton and vice-president of CBRE Ottawa’s national investment team Nico Zentil said they expect almost $1.4 billion in transactions in 2017, which would make it one of the city’s three most active years on record.

Zentil said in the past 18 months the city has experienced more investment activity, and more buildings for sale, than in the previous five years combined.

Yet despite government growth and an expanding tech industry, some of the city’s vacancy rates have actually increased.

“Right now if you were to say ‘Where is the softness is our market, and the opportunity for growth in our market?’ — outside of new development that has a timeline and a price that might not be attractive to highly mobile and agile tenants — we’ve got B- and C-class buildings in our downtown core that have vacancy rates hovering above 20 per cent,” Hamilton told RENX in an interview following the event.

“That represents about an 18-year high.”

The problem, Hamilton says, is these buildings need retrofits or upgrades to meet the standards many emerging companies expect from their workspaces.

Smaller government footprint

“I mean, these are buildings that were built 40 to 60 years ago for government employees. (They) do little to appeal to the modern, hip, demanding workforce of today. So there is a bit of a disconnect between the product we have available and the type of person in a new age economy business.

“My sense is we need to reposition these buildings in order to make them more attractive for growing tenancies. By growing tenancies, I am talking primarily urban technology groups.”

Hamilton said there is a “stalemate” of sorts among some of the region’s building owners. They’re playing a wait-and-see game to determine if government clients, or organizations related to governments, will continue to renew leases.

But he points out the federal government’s Workplace 2.0 initiative aims to reduce the footprint of each worker by 22 per cent. And, a recent round of government expansion by about 9,000 workers fit into existing space, with no new significant leasing.

That makes government a “stable industry, but not a growth industry” for owners of commercial real estate.

That fact highlights the need to upgrade and modernize older office buildings and spaces. Hamilton expects a mix of existing owners and new owners will take on these tasks.

Mix of new, existing owners

“Some will and some won’t,” he explained. “Some (owners) will because they have the vision and the funds and they have had some time to soften up and recognize that the federal government is not coming back.

“But I do feel there will be some (owners), who even if they have the vision, might not have the funds.

“They may look to sell in order to pass that opportunity on to somebody else.”

This could attract outside investment. Hamilton said with cap rates being compressed in hot Canadian markets such as Toronto or Vancouver, investors are looking elsewhere for better returns.

“Ottawa is becoming a very attractive market because it is stable, and it is a primary Canadian market.”

CBRE stats show Ottawa’s investment-grade properties show a 50-100-point uplift in returns compared to Toronto and Vancouver markets.

Hamilton believes this can be a good thing for the market – because more high-quality space is going to be needed.

The edge of the tech wedge in Ottawa these days is Shopify (SHOP-T), a rapidly expanding, homegrown company that has become an international ecommerce leader.

Shopify leads new tech wave

Shopify has just made plans for another massive expansion in Ottawa.

“They can be anywhere they want to be,” Hamilton said. “They’ve expanded in Waterloo, they’ve expanded in Toronto, but their choice to expand in Ottawa, again, shows that they believe this city can support the type of people they want to have.

“On the heels of that, I think there will be spinoff. It will wake other companies up that might not be in Ottawa, because Shopify is a name that carries some weight now outside of Ottawa.

“They will say ‘What’s going on in Ottawa that they would choose to have almost half a million square feet here?’ I think what’s good for them will be good for others.”

In addition to suitable office space, public transportation is a big driver for tech hubs. Ottawa’s LRT system is to open Stage 1 in 2018, followed by Stage 2 in the early 2020s.

The downtown stations are already creating activity around these nodes. Hamilton cited Place de Ville, Sun Life Financial Centre, World Exchange Plaza and CF Rideau Centre all investing in upgrades which he doesn’t think are “coincidental to the timing of the LRT.”

“It will be transformative by Ottawa standards to our downtown core.”

Which, he believes, adds to the opportunities for owners who move quickly to upgrade their properties.

“My view is the organization or landlord who does it first, will be the one who benefits most.”
https://renx.ca/banner-year-ottawa-c...sactions-cbre/
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Old Posted May 29, 2017, 8:29 PM
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The downtown stations are already creating activity around these nodes. Hamilton cited Place de Ville, Sun Life Financial Centre, World Exchange Plaza and CF Rideau Centre all investing in upgrades which he doesn’t think are “coincidental to the timing of the LRT.”
Sun Life and the Rideau Centre, certainly. Don't know about the WEP, but they haven't done jack at PdV other than station entrances.

And how will it work with the Podium Building. With the integrated entrance, redevelopment is out the window, is it not?
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Old Posted Jun 21, 2017, 5:27 PM
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Feds to fill long-empty space in EDC tower in downtown Ottawa

By: David Sali
Published: Jun 20, 2017 4:22pm EDT


The federal government is set to expand its downtown footprint after subleasing long-vacant space in the head office of the Export Development Corp.

Public Services and Procurement Canada has signed a 10-year lease to rent more than 37,000 square feet of space on two floors at EDC headquarters at 150 Slater St. Under the deal, which runs from August of this year to July 31, 2027, the federal department will lease all of the seventh floor and part of the sixth floor to augment its main office on Laurier Avenue.

The space has been vacant since the 18-story office tower was completed in 2011.

A joint venture between Broccolini Construction and the Canderel Group of Companies, the 479,000-square-foot building at the corner of Slater and O’Connor streets was the largest new office development in downtown Ottawa in a quarter-century when construction began in 2009.

Manulife Financial acquired the LEED gold-certified tower from Broccolini and Canderel at the end of 2011. EDC has a long-term lease on the entire building that extends until 2031, and the empty real estate on the sixth and seventh floors was originally left open to accommodate more staff as the Crown corporation expanded its workforce.

EDC’s headcount has now “stabilized” at just under 1,300 employees, according to spokesperson Shelley Maclean, and the agency decided to sublease the unused portions of the building.

A pair of high-profile construction firms, PCL Constructors and EllisDon, will work together to tailor the space, which is currently a bare shell, to fit the new tenant’s needs. PSPC spokesperson Nicolas Boucher said the number of employees who will work there will depend on the final design.

http://www.obj.ca/article/feds-fill-...owntown-ottawa
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Old Posted Jun 21, 2017, 5:29 PM
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Global Affairs has put a group into the building to work on next year's G-7 summit, so I assume short term. I don't know who else is in the building at the moment.
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Old Posted Aug 8, 2017, 4:49 PM
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Canderel-led consortium close to purchasing Ottawa’s Constitution Square
Tenants began receiving Estoppel Certificates last week, which is generally considered a sign that a sale is on the path to completion

By: David Sali, OBJ
Published: Aug 8, 2017 9:13am EDT




A group led by Montreal developer Canderel is close to purchasing one of Ottawa’s marquee class-A office complexes, OBJ has learned – marking what would be among the biggest local real estate transactions in recent history.

Several sources have confirmed that the consortium, which also includes Toronto-based Forgestone Capital and Regina’s Greystone Managed Investments, is in the final stages of due diligence on a blockbuster deal to buy Constitution Square from current owner Oxford Properties.

The three-tower office complex, which contains more than one million square feet of space at 340, 350 and 360 Albert St., was put on the market in the second quarter of 2017. Sources say the property attracted interest from several other potential buyers, including Morguard.

Oxford Properties is the real estate arm of the Ontario Municipal Employees Retirement System pension fund, better known as OMERS. The company owns and manages a wide range of office, retail, hotel, industrial and residential properties in North America and Europe, but Constitution Square is its only Ottawa holding.

Tenants in the three buildings began receiving Estoppel Certificates last week. The documents – which are used to verify lease terms and determine if there are any outstanding issues between landlords and tenants such as unpaid rent – are generally considered a sign that a sale is on the path to completion.

“This only happens near the end of the process, so they’re pretty darn close (to a deal),” Bruce Wolfgram, a broker with Proveras Commercial Realty, told OBJ last week.

According to a recent report from Colliers International, the sale of Constitution Square would be the city’s “largest single transaction of recent record.”

The largest deal in Ottawa so far this year was Investors Group’s $188-million purchase of a 50 per cent interest in the three office towers at Minto Place from Minto Capital Management. That’s also the most lucrative transaction in the city since the federal government bought the former Nortel campus on Carling Avenue in 2010 for $208 million (see fact box below).

The first tower at Constitution Square, an 18-storey building, was completed in 1986. A 21-storey highrise was added to the complex in 1992, and the third tower, which is 19 storeys tall, opened in 2007. The complex is a block from the future Lyon LRT station and includes amenities such as a conference centre, fitness centre and a daycare facility.

The complex’s retail podium includes a restaurant, while the towers contain a mix of private and government tenants, including Public Services and Procurement Canada, TD Wealth, Scotia Capital and Rogers. According to Oxford’s website, a total of about 84,000 square feet of space is currently vacant in the three towers.

Sources say some tenants are paying net rent of less than $10 per square foot after inducements are taken into account, a rate the new owners will likely expect to improve upon. Another source told OBJ the deal features “an aggressive cap rate.”

Officials from Canderel and Cushman & Wakefield, the brokerage representing the buyers, did not respond to emails from OBJ. Brokerage firm CBRE is representing the seller and did not return a request for comment. Oxford Properties spokeswoman Claire McIntyre said the company had no comment at this time.

“Oxford may have thought now is the time to sell, and it is a good time to sell, that’s for sure,” one veteran broker said. “There’s all sorts of reasons why people sell, and there’s certainly a ton of money sitting out there looking to buy. There’s all sorts of investors looking to put their money somewhere other than in a bank account.”

Canderel develops and manages residential and commercial properties in several Canadian cities. The company has maintained a relatively low profile in Ottawa since selling its stake in Export Development Canada’s headquarters at 150 Slater St. six years ago, although it was part of a bid to redevelop LeBreton Flats that ultimately lost to a group led by Senators owner Eugene Melnyk in 2016.

The developer is also building an eight-storey retirement residence across from Lansdowne Park in the Glebe and was part of a joint venture with Minto to construct UpperWest, a 25-storey, 175-unit condo project in Westboro that opened last year.

“Clearly, this is going to be a major comeback (for Canderel in Ottawa) if and when this goes ahead,” one broker said of the Constitution Square purchase.

Forgestone Capital is currently working with Trinity Development Group on another project in the capital, a 680,000-square-foot mixed-use project at the corner of Rideau and Chapel streets that is expected to be completed in the spring of 2019.

If it goes through, the sale of Constitution Square would come at a time when Ottawa’s downtown commercial real estate market appears to be heating up.

Colliers International’s most recent office market report said the citywide office vacancy rate was 11.7 per cent at the mid-year mark, down from 12.2 per cent at the end of the first quarter.

One of the big drivers of the decline was the high end of the downtown submarket, Colliers said.

“Class-A assets continue to dominate the interest of tenants looking in the market, a trend that is starting to spill into upper class-B offerings,” the real estate services firm said in a report released last month.

“Millennial businesses find downtown spaces to be the most attractive in terms of amenities and transportation. Smaller companies in Kanata are starting to see this appeal and have begun to pursue downtown options as well.”


Quote:
Notable Ottawa commercial real estate transactions
  • Former Nortel campus at 3500 Carling Ave. – $208,000,000 (2010)
  • Minto Place (50% interest) – $188,000,000 (2017)
  • 200 Kent St. – $143,400,000 (2012)
  • Chateau Laurier – $120,000,000 (2013)
  • 100 Kent St. – $111,000,000 (2016)
  • 1600 James Naismith Dr. & 1595 Telesat Crt. – $80,000,000 (2011)
  • 234 Laurier Ave. (50% interest) – $75,750,000 (2014)
  • Investors Group portfolio – $64,875,000 (2015)

Source: Juteau Johnson Comba Inc.
http://www.obj.ca/article/canderel-l...itution-square
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Old Posted Aug 16, 2017, 5:33 PM
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Cushman & Wakefield enters Ottawa property management with 20 VIC acquisition

By: Craig Lord
Published: Aug 15, 2017 3:21pm EDT


Cushman & Wakefield’s latest acquisition puts a few local properties under new management and continues an expansion of the global brokerage firm’s Canadian services.

The U.S.-based commercial real estate firm, which is also Ottawa’s largest brokerage firm based on number of agents, announced Tuesday that it has acquired Ontario-based property management firm 20 VIC. It oversees assets across the country, including four Ottawa properties: Carlingwood Shopping Centre, Billings Bridge Centre and Tower, and 2211 Riverside Dr.

The move folds 20 VIC’s more than 21 million square feet of Canadian property under Cushman & Wakefield’s umbrella, and returns the global firm to the property management field in Canada, which the firm exited in the 1990s.

Nathan Smith, head of Cushman & Wakefield in Ottawa, says the acquisition “completes the package” of services the firm can offer its clients in Canada. The company’s traditional verticals include its corporate services, property appraisal and brokerage businesses.

That’s not to say that Cushman & Wakefield is any stranger to property management. The firm manages 13,000 assets comprising 1.4 billion square feet of property around the world, Mr. Smith told OBJ.

The experience and service ability that comes with such a sizeable portfolio will be a boon to 20 VIC’s own services, Mr. Smith said.

“The strength and size of the Cushman & Wakefield global property management business will benefit 20 VIC.”

The move continues Cushman & Wakefield’s expansion into Canada, including its 2005 acquisition of Royal LePage Commercial.

http://www.obj.ca/article/cushman-wa...ic-acquisition
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Old Posted Aug 22, 2017, 3:09 PM
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The LCBO at Rideau and King Edward was sold to Toronto's Westdale Properties.

http://obj.ca/index.php/article/exte...wa-investments
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Old Posted Aug 22, 2017, 10:18 PM
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Westdale Properties is a partner on Nobu in Toronto
http://urbantoronto.ca/news/2017/08/...dences-toronto
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Old Posted Aug 23, 2017, 2:05 AM
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It would be nice if they bought the metro side from Claridge.
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Old Posted Sep 13, 2017, 4:40 PM
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It’s official: Ottawa’s Constitution Square sells for $480M
Downtown office complex changes hands in largest deal in city's history

By: David Sali, OBJ
Published: Sep 12, 2017 3:12pm EDT


A consortium of investors closed the largest real estate transaction in Ottawa’s history Monday, buying the Constitution Square downtown office complex for $480 million.

The buyers – Greystone Managed Investments, Canderel and Canstone Realty Advisors – announced the deal Tuesday. Regina-based Greystone becomes the majority owner of the three-building complex on Albert Street, while Montreal’s Canderel will take on the roles of property and leasing manager and Toronto-based Canstone will act as asset manager of the 1.06-million-square-foot space.

Constitution Square had been jointly owned since 2005 by Oxford Properties, the real estate arm of the Ontario Municipal Employees Retirement System pension fund, and the Canada Pension Plan Investment Board.

In a statement, the new owners called the complex “the largest and one of the most prestigious Class ‘AA’ office complexes in downtown Ottawa,” noting the buildings’ close proximity to the Lyon Street LRT station that will open next year.

With a total value of nearly half a billion dollars, the deal easily eclipses previous blockbuster sales such as the federal government’s $208-million purchase of the former Nortel campus on Carling Avenue in 2010 and Investors Group’s $188-million agreement earlier this year for a 50 per cent stake in Minto Capital Management’s office towers at Minto Place.

CBRE vice-president Nico Zentil, whose firm represented the vendors along with RBC, said all parties involved in the transaction are “elite investors” in the Canadian real estate industry.

“I think it’s testament to the strength of the Ottawa investment climate right now,” he said of the record-smashing deal. “It complements a lot of various investors’ strategy, which is to own very core assets in core markets. It’s a top-three building in the city, and the investment strategy is conducive to owning the top buildings in the top markets.”

‘Stars were aligned’

When Constitution Square was put on the block earlier this year, the property attracted interest from several potential buyers, including real estate heavyweights such as Morguard.

In a statement issued Tuesday, the Canada Pension Plan Investment Board said the strength of the Ottawa market made it an “opportune time to monetize” its stake in the asset. In an e-mail to OBJ, Oxford Properties vice-president of investments Eric Plesman called Constitution Square a “great piece of real estate” but said it “no longer fit with Oxford’s strategy.”

Referring to the transaction as “one of the platform deals of the year” in Canadian commercial real estate, Mr. Zentil said it reflects Ottawa’s reputation as a “safe, sought-after” market.

“The stars were aligned,” he said. “The investment climate was very strong, the debt and equity markets were very strong. Everything just added up to be a pretty iconic sales transaction.”

The first tower at Constitution Square, an 18-storey building, was completed in 1986. A 21-storey highrise was added to the complex in 1992, and the third tower, which is 19 storeys tall, opened in 2007. The complex includes amenities such as a conference centre, fitness centre and a daycare facility.

The complex’s retail podium features a restaurant, while the towers contain a mix of private and government tenants, including Public Services and Procurement Canada, TD Wealth, Scotia Capital and Rogers. Before the sale was completed, Oxford’s website indicated about 84,000 square feet of space was vacant in the three towers.

“Constitution Square represents a strategic opportunity for our institutional clients, and we are extremely pleased that this latest acquisition enhances our significant investment position in the Ottawa area,” Greystone managing director Ted Welter said in a statement. “We believe that Ottawa’s downtown core will benefit from the growth momentum currently under way.”

Recent research suggests Ottawa’s downtown commercial real estate market is indeed heating up.

Colliers International’s most recent office market report said the citywide office vacancy rate was 11.7 per cent at the mid-year mark, down from 12.2 per cent at the end of the first quarter.

One of the big drivers of the decline was the high end of the downtown submarket, Colliers said.

“Class-A assets continue to dominate the interest of tenants looking in the market, a trend that is starting to spill into upper class-B offerings,” the real estate services firm said in a report released in July.

“Millennial businesses find downtown spaces to be the most attractive in terms of amenities and transportation. Smaller companies in Kanata are starting to see this appeal and have begun to pursue downtown options as well.”

http://www.obj.ca/article/its-offici...are-sells-480m
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Old Posted Sep 15, 2017, 3:37 PM
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They already plastered Canderel branded paper in the window of an empty retail space and removed the Oxford plates from the elevators. Haven't noticed anything else so far.
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Old Posted Jan 3, 2018, 6:23 PM
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2018 lookahead: Tech migration driving ‘sea change’ in downtown office market
Changing commercial real estate landscape presents both challenges and opportunities for owners of lower-tier properties looking to entice new style of tenants


By: David Sali
Published: Jan 2, 2018 2:43pm EST


In a town where the federal government has been the dominant tenant in commercial real estate seemingly forever, Michael Church and his colleagues are starting to sense a subtle shift in the landscape.

The managing director at Avison Young’s Ottawa office and a broker in the capital for three decades, Church is as tapped in to the local real estate community as anyone. What he heard at last fall’s Ottawa Real Estate Forum – an event where federal government leasing strategies and requirements typically monopolize industry chatter – caused him to sit up and take notice.

“The focus was not on the feds,” he says. “It was all about technology, it was all about transportation. We spent a lot of time on major projects, (multi-residential developments), which was quite refreshing.”

Church and many of his fellow brokers say 2018 is shaping up to be a pivotal year, the start of a new era in which a growing number of established firms and young upstarts in the technology industry begin to put their stamp on the downtown market.

“I’m seeing a full-on shift,” says Shawn Hamilton, a senior vice-president at CBRE’s Ottawa office who has been part of the local real estate scene for more than 25 years. “It’s not away from government; we’re always going to be a government town. But our reliance is less on government, and there’s now room for other business cultures and other businesses to grow in our downtown, which is very exciting.”

Church calls it the “Shopify effect,” and for good reason. The e-commerce giant made headlines last spring when it leased 325,000 square feet of space in the former Export Development Canada building at 234 Laurier Ave. in anticipation of adding up to 2,500 employees over the next decade.

But a growing number of other firms, both new and well-established, have anchored themselves in Centretown and nearby neighbourhoods such as Little Italy, far from the traditional tech hub of Kanata North.

Among them is business dashboard developer Klipfolio, one of Ottawa’s hottest companies. The booming software enterprise – which made Deloitte’s list of Canada’s 50 fastest-growing companies in 2017 – plans to vacate its longtime headquarters on Gloucester Street for a state-of-the-art new 17,000-square-foot head office in the World Exchange Plaza early this year.

Tech newcomers such as online grain marketplace FarmLead and fitness tracking firm GymTrack have also chosen to make their homes downtown, close to where their predominantly 20-something workforces live and play.

“Downtown is starting to become a place to be for burgeoning tech companies, to the point now – and most of this is on the back of Shopify – technology is the biggest industry in our downtown core behind the federal government,” Hamilton says. “That will bring a culture shift to our downtown core.”

Far from adhering to the traditional model of staid office towers filled with a maze of cubicles, the new crop of tech firms tends to prefer wide-open work spaces and large meeting rooms that encourage employees to congregate and bounce ideas off each other – not to mention places where they can kick back and enjoy a stress-busting game of fussball or table hockey.

Veteran broker Bruce Wolfgram notes that even kitchens have gone from afterthoughts relegated to the back of an office to brightly lit beehives of activity in many workplaces.

“It’s no longer a cookie-cutter approach to how you organize an office,” says Wolfgram, principal at Proveras Commercial Realty, whose firm represents only tenants and counts several tech firms among its clients.

The rise of tech presents both challenges and opportunities for commercial landlords, brokers say.

The federal government’s exodus from downtown class-A properties caused many landlords to woo new tenants with incentives such as free rent and subsidized fit-ups in order to fill the vacuum.

That’s driven downtown office vacancy rates in those buildings down to less than five per cent, while vacancy rates in Ottawa’s aging crop of class-B properties have spiked from close to zero a decade go to nearly 15 per cent today. The picture is even bleaker for class-C buildings, where nearly a quarter of all leasable downtown office space sits empty.

But owners of lower-tier buildings now have a chance to get some of that business back by targeting tech upstarts that want to be downtown where the action is but don’t have the budget to lease class-A space, experts say.

Class B- and C properties are also more likely to be in the hands of local owners who have more flexibility to completely redesign a space than landlords at top-tier addresses, who are often constrained by the policies of those buildings’ large corporate owners.

Many startups have “creative wishes to transform their space that might not fly in an A-class tower today,” Hamilton says. That’s opening the door to landlords in B and C-class buildings who are willing to reconfigure an office to suit a prospective tenant’s needs.

“I’m not going to say that the C-class market is going to go from a vacancy of the high twenties down to zero, but I’m seeing that there is the possibility for real demand in buildings we were wondering what we were going to do with two or three years ago,” he says.

“I think there need to be a couple of brave landlords who will step out and say, ‘We’re going to take this building and we’re going to be creative and retool it to appeal to the high-technology crowd.’”

Church agrees.

“What do people want? At the end of the day, it’s access to light, it’s good-quality air, it’s perhaps a change in design,” he says.

“It’s time for those landlords to say, ‘Look, I could be the next wave.’ There’s all manner of opportunities for those who (say), ‘You know, things are changing and now’s my time to change.’ You stay put at your peril.”

While tech firms are the leading contenders to fill the class-B and C vacuum, other organizations such as not-for-profits are also starting to rethink their office needs, brokers say.

For example, the Canadian Chamber of Commerce has just moved from Constitution Square, its home for the past decade, to a class-B building managed by Colonnade Bridgeport at 275 Slater St., lured by the carrots of cheaper rent and a no-cost makeover of the space.

“What’s happened is there’s a value proposition in these B-class buildings that was never there before,” says Alan Doak of Proveras, which represented the chamber in leasing negotiations.

“It’s not just technology companies that are thinking this way. We have clients in the legal industry that want to do things that are creative and modern. We’ve got large Crown corporations that we work with that are completely rethinking the way they want their working environment to be.”

It’s now up to landlords to get on board and start reimagining their properties to make them more appealing to tenants with changing tastes and demands, experts say.

“Part of the challenge is, as a government town, we don’t have a lot of experience with that,” Hamilton says. “So we need to retool ourselves as a real estate community to understand what that means. It’s more than just beanbag chairs and bring your dog to work.”

Although the move to Class-B and C properties has already begun, some brokers say it will really pick up steam in 2019, when the Department of National Defence has completely vacated the downtown core and Class-B vacancy rates are expected to peak.

“It’s a sea change going on out there right now,” Wolfgram says. “We think this will continue for the next several years. The Class-B market is not going to get all filled up anytime soon.”

http://www.obj.ca/index.php/article/...-office-market
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  #18  
Old Posted Jan 30, 2018, 5:59 PM
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rocketphish rocketphish is offline
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Feds looking for 28,000 square feet of Ottawa office space

By: OBJ staff
Published: Jan 26, 2018 9:28am EST


The federal government is asking local landlords if they’d be interested in leasing the region’s largest tenant some 28,200 square feet for a five-year term starting in 2019.

Earlier this week, Public Services and Procurement Canada published a request for “expressions of interest” from Ottawa property managers. While not a formal solicitation request, Public Services and Procurement Canada may eventually ask those interested landlords to submit a formal offer.

The federal government is casting a relatively wide geographic net for its space, which can be located anywhere west of St. Laurent Boulevard, east of Island Park Drive or Fisher Avenue and north of Baseline Road, Heron Road, Riverside Drive or Highway 417.

If the space is outside the central business district, it must be within a 600-metre walk of a rapid transit station.

To put the size of the request in context, 28,200 square feet the equivalent of slightly more than one full floor inside the Sun Life Centre.

The federal government occupies about 38 million square feet of office space across the National Capital Region. Within that portfolio, approximately 40 per cent is leased from the private sector while the remainder is comprised of Crown-owned properties or buildings occupied under a lease-to-own contracts.

The federal government’s top real estate official, Kevin Radford, has repeatedly said he’d like to see the government look to lease private-sector space to meet its future office requirements.

In a separate, smaller request for expressions of interest, the federal government said it’s also looking for 7,870 square feet of space in downtown Ottawa between Bay, Nepean and Elgin streets.

http://www.obj.ca/index.php/article/...a-office-space
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  #19  
Old Posted Feb 28, 2018, 7:51 PM
kevinbottawa kevinbottawa is offline
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Quote:
Kanata office vacancy rate to hit 10-year low: CBRE

BY: OBJ staff

A new report is forecasting that the office vacancy rate in Kanata will dip into the single digits for the first time since the financial crisis of 2008.

Commercial real estate services firm CBRE released its 2018 outlook for key markets across the country this week.

It painted a largely positive picture for the nation’s capital, which the brokerage firm said is experiencing a significant increase in “city-building projects” such as the light-rail line, new Civic Hospital and large-scale condominium projects.

In the downtown core – where the office vacancy rate is forecast to decline from 9.5 per cent last year to 9.2 per cent in 2018 – CBRE says Shopify and the rise of “urban tech” are changing the conversation around Ottawa’s commercial real estate market from one that was solely centred on the federal government to that of an emerging Canadian tech hub.

“As more tech companies mobilize into the downtown core, this leading-edge tenant has the potential to change the landscape of downtown Ottawa in 2018 and beyond,” CBRE states.

The shift comes at a time when the city’s traditional tech focal point – Kanata – is also on the upswing.

CBRE says the deep west submarket is seeing sustained interest from tenants that are both new to the market as well as companies already in Kanata looking to expand. This led the brokerage firm to predict that vacancy rates will fall into the single digits this year for the first time in a decade.

Citywide average class-A net asking rents are poised to take a large jump this year, according to CBRE, from $18.12 per square foot to $19.57.

Meanwhile, industrial space users are expected to face even greater competition for well-located, high-quality properties as the availability rate drops from 4.6 per cent in 2017 to 4.4 per cent this year. That would be the lowest level since 2006, according to CBRE.

While Ottawa’s industrial market has long been characterized by stable demand and limited supply, new pressure is coming from new types of businesses such as microbreweries, gymnastics centres and marijuana growers looking for industrial space.

...
http://obj.ca/index.php/article/kana...-year-low-cbre
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  #20  
Old Posted Feb 28, 2018, 8:37 PM
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1overcosc 1overcosc is offline
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It's amazing that even with the uptick of tech vacancy rates are still that high. This is a double edged sword; it means that office rent prices, especially the critical downtown ones, will remain affordable as companies compete for tenants. But it also means that there won't be as much potential for new office development, which could handicap efforts to redevelop Lebreton, as residential likely isn't enough to generate the profits needed to build it out.
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