Here at Primecorp Commercial Realty Inc., a member of TCN Worldwide, we are finely tuned into the changing dynamics of the office leasing market in Ottawa. If you are an office tenant currently leasing, or considering a new or renewed lease in the capital, we’re here to keep you up to speed on trending locations, ways to attract and retain employees and clients, and tips for choosing the right office site and ideal leasing arrangements to suit your growing business needs in this edition of our Primer, for the winter of 2017.
Primecorp's Tenant Representation Group, led by Vice President Bruce Wolfgram, stays well abreast of significant deals and trends in the Ottawa office leasing market. The following are some of the significant deals that have taken place in recent months:
- CAE, 350 Legget Drive, 34,461 square feet
- Cowater International, 275 Slater Street, 12,000 square feet
- Federal Government, 40 Elgin Street, 24,624 square feet
- Flextronics, 1-9 Brewer Hunt Way, 12,000 square feet
- Persistent Systems, 151 Legget Drive, 9,016 square feet
- SAS Institute Canada, 100 Queens Street, 15,000 square feet
As major deals unfold in the office leasing sector, we get a real working sense of the market for office space in various sections of Ottawa. Here's our take on what's trending in our capital this winter.
Leasing in Downtown Ottawa
The downtown office leasing market, in Ottawa’s central business district, continues to remain flat, with historically high vacancy rates in the 10% range. Landlords are offering a range of incentives, including Tenant Improvement (TI) allowances, free rent periods and more to attract new tenants to the downtown core, with only limited success. There are great deals to be had for downtown office space, before this market inevitable picks up.
Office Leasing in Kanata
Tech is cool again, heating up the office leasing market in Kanata. Many tech companies are either on the hunt for new office space to lease, or are scouting for better leasing alternatives in the attractive Kanata market.
Leasing Space Between Downtown and Kanata
If your office is situated in this area, or if you want to be relocate to the area, you should seriously consider negotiating your next office lease in 2017, before the boom takes place. Once the Department of National Defence (DND) begins to fully implement their big move into the sprawling former Nortel complex on Moodie Drive, everything in the area will be impacted from office space to retail space to home sales. The sleepy office spaces in Bells Corners will soon become very popular as companies who want or need to remain close to DND will be circling for space to lease.
Attracting Millennial Employees
In 2017, qualified young professionals are attracted by office locations that embrace the notion of “Live, Work, Play.” If you’re looking to hire and retain Millennials, consider office locations with a variety of restaurants, entertainment venues, attractive housing options and recreational facilities all close by. The Byward Market and Centretown (between Laurier and Somerset) are good examples that fit this description. Further options are in the works with LeBreton Flats and Windmill’s Zibi project coming online in a few years.
Emerging Trends in New Office Environments
A variety of emerging concepts are influencing modern office environments such as: hoteling; bright colours; espresso machines; break-out areas and more. Some of these concepts can be great for boosting morale and enticing creativity, but apply with caution. There are many furniture companies and other suppliers willing to provide you with a totally new environment, but you must make sure that any changes fit with your company’s culture, your work processes, and the demographics of your staff.
Impact of Light Rail Transit (LRT) on Office Leasing
Ottawa’s new LRT line is scheduled to begin operating in 2018. The introduction of the LRT will initiate a major transformation over the coming years in how people commute to work in Ottawa, impacting the number of cars entering downtown, parking availability, and ultimately even how many vehicles a family may choose to own.
Choosing the Right Office Space for You
Choosing an appropriate office space can be very challenging because your decision will have so many repercussions for your business. The wrong location could cost you employees or clients. Furthermore, you need to base your choice on your company’s future needs, not just your current situation.
Finding the most suitable office space for your business requires careful consideration of many elements, including the financial aspects of your decision, which are often comprised of several factors working together. To determine the cost and suitability of occupancy, you need to think about the quality of services provided by the property owner, special features of the building, location, any hidden costs and more.
Top Considerations When Choosing Office Space:
Efficiency of Space
Even if a larger office is slightly less expensive than a smaller one, it may not be the most economical choice due to space inefficiency. Regardless of your office size, you want space that is fully utilized, with as few unused areas as possible.
Operating Expenses and Hidden Costs
Beyond the cost of your lease, you also need to factor in various operating expenses, such as the cost of janitorial services, system upgrades, energy, taxes, and more to determine the overall cost of leasing a specific space. When moving, some expenses may not be so obvious such as renovation costs and moving expenses; for example, are there any restoration costs for the space you’re leaving?
Building Systems and Infrastucture
Another factor to take into account is the supporting infrastructure. Does your business have specific heating and cooling needs or power consumption requirements? If so, you will need confirmation that the existing HVAC system and power supply can accommodate your requirements. If you’re looking for a downtown location, guaranteed and affordable parking for your employees and clients is essential.
Before choosing an office space, you’ll want to get a sense about how well the property is managed. You may wish to speak to other office tenants in the building to determine the property manager’s level of involvement, professionalism, responsiveness and overall performance.
Sustainable Office Space
If leasing a sustainable office space is important to you, you’ll want to ensure that the building follows specific green building best practices and has a green building design.
A growing business means that space requirements can change over the course of your lease. While you can choose a small office and then move elsewhere to something bigger, there are costs and time associated with leasing a completely new location. If you have a good sense about the growth prospects for your business, it might make more sense to locate to a building that will accommodate your company as it grows. If you can’t afford the extra space up front, try to add language to the lease that gives you the first right of negotiation on any adjacent space that becomes vacant.
Location, Location, Location
Location is always a priority. When choosing an office space, be sure to consider where your key employees live. A lengthy, expensive commute may drive them to seek employment elsewhere. You also want your office to be accessible to clients, as transportation costs continue to rise and people may not be as willing to travel to patronize your business. Even in the age of video conferencing and Skype, it’s important to facilitate face-to-face meetings.
Does Your Office Convey the Right Impression?
Your office space is much more than a collection of tables and cubicles; it is also a signal to others about how well you’re doing. You don’t want to appear too lavish. On the other hand, if you don’t spend enough, people may wonder about the financial health of your company.
Looking for an Office Lease? Get Primecorp Commercial Realty in Your Corner!
If you are a business owner, or manager, seeking to negotiate an office lease tailored to your specific business needs in the Ottawa area, Primecorp has you covered. Just contact us… we'd be happy to hear from you, or from other potential office tenants you would like to refer to our Tenant Representation Group.