While the economic engines in Vancouver and Toronto are dominating business headlines in Canada, as of late, the commercial real estate sector in Ottawa is also quite active as the region serves the needs of a new government, and a thriving tech sector that is attracting highly educated millennials and garnering the attention of international investors. In fact, many industry experts are predicting that: "The commercial real estate market in Ottawa is on course for a banner year...." - Canadian Real Estate Wealth
Ottawa Has Many Amenities Found in Bigger Cities, But Retains a Small-Town Feel
The National Capital Region is a vibrant place to live, work and invest in. As Canada prepares to celebrate our 150th birthday, the international spotlight will be on Ottawa as a showcase of Canadian culture, highlighting the diversity and welcoming feeling of our community:
The city offers the promise of transformative cultural experiences and intriguing opportunities for outdoor enthusiasts, foodies, art enthusiasts, shoppers and history buffs... Ottawa is a classic Canadian city. Almost 1.3 million people live in this multicultural, multilingual capital, but it retains a welcoming, small-town character. - LA Times
Growth Prospects Not Spread Evenly Across Ottawa
The jubilation is not equally distributed, however, as some areas of the city, such as Ottawa East, are in a bit of vacuum in terms of office vacancies and demand for commercial real estate. Meanwhile, less than half an hour west down Hwy 417 in Kanata, prime office and commercial space is prized as Ottawa's tech sector begins to heat up.
Even downtown Ottawa is showing signs of recovery, after a decade of downsizing and freezes in the federal public service. Increased spending by the new Liberal government and the success of homegrown tech stars, like Shopify, along with increased investment from other prolific high tech players bodes very well for economic fortunes in the capital.
The buzz in town is further enhanced as mega-developments, TD Place and LeBreton Flats, are factored in. All the while, construction is steadily progressing on the new Light Rail Transit line, scheduled to begin operations next year, making Ottawa stand out among Canadian cities as an attractive investment option in the near to mid-term:
Among the markets, Ottawa may see the most notable medium-term upside potential in light of federal government spending plans as well as decent prospects for the region’s high-tech sector. - TD Bank
High Tech Sector Driving Demand for Ottawa Commercial Real Estate
Ottawa's manufacturing sector, led by high tech, has also benefitted from a low Canadian dollar and tax incentives that make it the fastest growing sector, outside of the federal government in the National Capital Region. As a result, demand for commercial space in Ottawa's west end has been bullish, and rents are on the rise for prime office and commercial locations to meet the expanding requirements of a growing number of technology companies in Ottawa:
Ottawa’s private sector continues to grow and create new jobs. Ottawa boasts the largest concentration of engineers and scientists in Canada. Ottawa’s technology sector has more than 1,800 companies and 68,000 employees, making it second only to the federal government. - Kitchissippi Times
Stronger Canadian Economy Aids Commercial Real Estate Across the Country
Canada has terrific potential for commercial real estate expansion in 2017, fueled by growth in our domestic economy against a backdrop of uncertainty on the international stage. 2016 set a record for commercial real estate transactions, in Canada, amounting to nearly $35B. This trend appears to be holding into the first quarter of 2017.
The improving strength and stability of the national economy is enhancing the outlook for commercial real estate investment; however, competition among anchor tenants has intensified and thrown a bit of a wrench into short-term prospects for investment in shopping malls, especially in the wake of online shopping, which has put the squeeze on many traditional retailers:
According to an estimate by Colliers International, online sales of $23 billion in 2014 replaced 76.7 million square feet of bricks and mortar stores. That’s roughly equivalent to the shopping centre inventories of Vancouver, Halifax, Ottawa and Victoria combined, according to the report. - Toronto Star
Canadian fixtures such as Danier Leather and Jacob have gone under, and the colossal failure of Target to enter and maintain a presence in Canada is a stark reminder that even giants can fall quickly in today's competitive retail landscape.
Canadian Commercial Real Estate Investors Retooling for the Long-Term
The resulting upheaval has caused many big-name investors in traditional shopping centres to rethink their approach and consider the value that these locations offer in the long-term:
RioCan’s [CEO Edward Sonshine] has described his retail empire, with more than 300 locations across Canada, as a land bank with some of the best future redevelopment sites in the country… “Every shopping centre ever built is at a major intersection and a good location. As the country fills in transit and infrastructure over the next 10 years — and it’s not just a Toronto phenomenon, it’s happening in Calgary, Edmonton, Montreal, Vancouver and Ottawa — it unlocks opportunities,” he told analysts on the company’s most recent earnings call. - Toronto Star
This longer-term perspective is in line with the infrastructure investments currently underway in the National Capital Region, specifically LRT, and the potential redevelopment of commercial real estate inventories that are closely situated along the new Light Rail Transit Line:
As Ottawa’s major transit rebuilding effort progresses over the next ten to 15 years, respondents anticipate that the city’s real estate market will regain momentum, driven by the rise of high-density mixed-use developments focused around key transit hubs. Emerging Trends in Canadian Real Estate Survey 2017 - PWC
Primecorp Commercial Realty Inc. has in depth knowledge of the Ottawa market, where we are headquartered, through the many commercial real estate transactions we broker on behalf of our valued clients.
Ottawa Commercial Property Recently Sold by Primecorp
Here's a sample of recent commercial real estate deals we've transacted in the Ottawa area:
Mercury Court: 377 Dalhousie Street Ottawa, Ontario
Mercury Court combines the elements of a modern office and retail building, while maintaining the architectural integrity of this 95-year old landmark. Situated in the heart of the Byward Market, anchor tenants include: Trip Advisor, Lone Star, Second Cup, Cora’s, Embassy of Sweden, iControl and Barry Padolsky Architects.
Kanata Retail Plaza: 501 Hazeldean Rd. Ottawa, Ontario
Well leased, this single storey retail plaza is ideally located in the Hazeldean Road Retail Corridor, in the growing community of Kanata in Ottawa West. Tenant's include Henry`s Camera, Money Mart, and Cosmo Prof. The Kanata Retail Plaza has a Proforma Net Operating Income of approximately $247,488.
901 Carling Avenue, Ottawa, Ontario
This 5,815 sf, two-storey freestanding building has highly visible showroom and retail space with executive offices, and is well served by public transit, 2 blocks from the O-Train and contains ample parking with 20 spaces.
Emerald Plaza: 1547 Merivale Rd. Ottawa, Ontario
The Emerald Plaza consists of a 151,897 sf mixed-use complex with a 56,823 sf, five-storey office component and a 95,074 sf retail strip mall. The plaza is well anchored by strong and longstanding tenants including: TD Canada Trust, Yang Ming Buffet, Pet Smart, and Alexanian Flooring Limited.
Ottawa Commercial Property Currently Listed with Primecorp
If you’re looking to invest in commercial real estate in the Ottawa area, here is a sampling of some of our current listings:
Somerset Retail Plaza: 691 Somerset St. W. Ottawa, Ontario
This 2-storey retail plaza street front property, located at the entrance to Ottawa’s Chinatown neighbourhood has ±13,770 sf of GLA. Tenants include: Ben Ben Restaurant, Nancy Hair Studio, Tim Tech, and Oriental Chu Shing Restaurant.
5.8 Acres of Commercial Land: Johnston Rd. Ottawa, Ontario
Here is a rare opportunity to acquire industrial zoned land within the Greenbelt in Ottawa South. This land is currently zoned (IL) Light Industrial allowing for a large variety of uses. Neighbouring businesses include: two car dealerships and a medical/retail plaza. South Keys Shopping Centre is a 1,000,000+ sf retail centre and transit hub located directly west of the subject property.
McGarry/Longfields Mixed-Use Development: 1034 McGarry Terrace & 1117 Longfields Drive Ottawa, Ontario
This land is zoned for a mixed-use development consisting of five high-rise towers, possessing a total of 372 condominium apartments (approx. 227,200 sq. ft.) with approximately 24,000 sq. ft. of ground floor commercial/retail space and 9,710 sq. ft. of commercial/office condominiums.
Primecorp Would Love to Hear from You
If you are an owner of commercial real estate, looking to sell, or a potential investor looking for some assistance, Primecorp Commercial Realty Inc. would be pleased to assist you. Simply contact us to get the process started… we’d love to hear from you!