Newsletter: April 2011
There were a total of 13 sales reported in the month of February with a total value of $37,511,701. Retail building sales accounted for 6.0% of the total, industrial buildings 16.3%, office buildings 6.2%, apartment buildings 0%, special buildings 0% and vacant land 71.5%.
Sales data has been provided by RealTrack, Inc. For more information visit http://www.realtrack.com or call 1-877-962-9033
There were three transactions in the RETAIL market with a total value of $2,262,500. The most notable transaction was the purchase of 5544 Manotick Main Street. The property was acquired by FW Holdings Ltd. from 6038212 Canada Inc. for $850,000 or $190/sf. It is improved with a two-storey pub.
There was one INDUSTRIAL building sale during the month of February. 2655 Lancaster Road was sold to 2655LR Property Ltd. from Colonnade Development Incorporated for $6,100,000 or $133/sf of building area. It is improved with a one-storey office-warehouse building that was constructed in 1974 and leased to the federal government. John Seymour (formerly of CB Richard Ellis) was the broker with respect to this transaction.
There were two OFFICE building sales with a total value of $2,320,000. The most notable transaction was the sale of 394 — 404 Bank Street. The property sold to Doyle Bank St. Holdings Inc. from Private Individuals for $1,220,000 or $177/sf. It is improved with a two-storey office building with mezzanine and basement area. The building was purchased by the tenant.
There were no transactions in the APARTMENT market during the month February.
There were no transactions in the SPECIAL building market during the month of February.
There were seven vacant LAND transactions during the month of February for a total consideration of $26,829,201. Of the seven transactions, there were two commercial land sales, two residential land sales, two future growth sales and one institutional land sale. The most notable transaction was for a 93-acre parcel of future development land situated on the north side of Fernbank Road and the west side of Terry Fox Drive. The property was purchased by 2129786 Ontario Ltd. (Monarch Homes) from Pleasant Valley Dairy Farms Ltd. for $15,426,951 or $165,188/acre.
Also worth mentioning is 4725 Spratt Road, a 24-acre parcel of land in the Riverside South Community. The property was purchased by Claridge Homes (Spratt Road) Inc. from Private Individuals for $4,142,250 or $175,370/acre.
99 — 107 Parkdale Avenue was another major transaction in the vacant land segment. The property was purchased by 2274911 Ontario Inc. (Urbandale) from a Private Individual for $3,150,000 or $213/sf. It is to be redeveloped with a condominium apartment building.
The first quarter market surveys have been released from all of the brokerage houses.
DTZ Barnicke is reporting an overall vacancy rate for office space in the City of 7.7%, up 43bps from the previous quarter. The vacancy rate for the downtown core has risen for the ninth consecutive quarter to 5.6%. This is partly due to the 208,000 square feet of vacant office space at the Sun Life Financial Centre which recently came onto the market. Likewise, Kanata continues to see an increase in vacancy as companies consolidate and make more efficient use of their space. Vacancy in the Kanata market currently stands at 14.8%
Colliers also reported a vacancy rate of 5.6% for the Central Business District, citing low private sector demand and relocation of Government offices as the two main factors affecting the core market. Overall vacancy in the City has been reported at 7.0%.
Cushman & Wakefield Ottawa's first quarter office report states the City's overall vacancy is 7.9%, up from 6.6% the previous quarter. They too cite consolidations and "rightsizing" as the main factors behind the increase of vacant space. Vacancy for the Downtown Core has been reported to be 5.8%.
CB Richard Ellis reports overall vacancy for Q1 2011 to be 6.7%, up from 5.7% the previous quarter. Vacancy rates in the Central Business District have been reported to be 5.0%. Vacancy in Kanata was reported to have risen to 15.4%, representing the first increase in six consecutive quarters.
Looking ahead, attention appears to be focused on the Central Business District as the Federal Government looks to decrease its office presence in the Core by approximately 1,000,000 square feet. Attention will also be turned to Kanata as tenants of the former Nortel Campus look to relocate prior to the DND's scheduled occupancy.
Regarding the industrial market, CB Richard Ellis reports industrial availability rates in the City of Ottawa have risen to 6.6% from 5.7% in the previous quarter. CBRE reports there has been city-wide negative absorption over the past quarter, citing the release of new product into the market as the major influencing factor.
Cushman & Wakefield Ottawa's first quarter industrial report stated overall vacancy in the Ottawa market has increased 0.5% since the last quarter to 7.1%. According to C&W, this increase in vacancy can be attributed to negative absorption in the western submarket. Vacancy rates may continue to rise as an additional 206,000 square feet is set to come onto the market over the next six months.
The local unemployment rate as reported by Statistics Canada for the month of February increased slightly to 6.7% from 6.6% the previous month. The provincial rate for February decreased to 8.0% from 8.1%. The national overall unemployment rate remained unchanged at 7.8%.
According to CMHC's news release, the number of residential units under construction decreased 9.4% this year over last year to 4,586 units. Housing Starts for the month of February have shown a slight 2.3% decrease, from 304 units in 2010 to 297 units in 2011. Year-to-date housing starts have decreased 24.0%, from 675 units in the first two months of 2010 to 513 units in the first two months of the current year.