Newsletter: July 2011
There were a total of 24 sales reported in the month of May with a total value of $52,603,000. Retail building sales accounted for 5.8% of the total, industrial buildings 6.3%, office buildings 47.9%, apartment buildings 8.8%, special buildings 0% and vacant land 3.12%.
Sales data has been provided by RealTrack, Inc. For more information visit http://www.realtrack.com or call 1-877-962-9033
There were four transactions in the RETAIL market with a total value of $3,030,000. The most notable transaction was the purchase of the former March House restaurant located at 806 March Road. The property was purchased by 1828329 Ontario Ltd. from Riotrin Properties (March Road) Inc. for $1,000,000 or $477/sf of building area. It is improved with a one and a half-storey gable roofed heritage structure that was originally built in the 1850's. The building was reported to be fully leased to a spa at the time of sale.
There were three INDUSTRIAL building sales during the month of May with a total value of $3,290,000. 46 Colonnade Road was the largest transaction transferring from Private Individuals to 681367 Ontario Inc. for $1,900,000 or $135/sf of building area. It is improved with a single-storey industrial-retail building with a mezzanine office component. The building was vacant at the time of sale. Graeme Webster, Jason Shinder and Marc Morin of District Realty Corp were the agents involved with this transaction.
There were four OFFICE building sales with a total value of $25,201,500. The most notable transaction was the sale of 1165 Kenaston Street. The property sold to Artis REIT from Kenaston KS Inc. for $21,500,000 or $119/sf. It is improved with a one and two-storey industrial-office building that was constructed in 2002 and was purchased by the vendor in September 2009 for $15,600,000. Not a bad return for a 19 month hold. The property was fully leased to St. Joseph Communications at the time of sale. Aik Aliferis, Nick Pantieras and Sam Firestone of Primecorp Commercial Realty were the agents involved with this transaction.
There were four transactions in the APARTMENT market during the month May with a total value of $4,646,500. 1290 – 1294 Thames Street represented the largest transaction selling to Thames Ottawa 2011 Inc. from Thames Court Apts. Ltd. for $2,400,000 or $133,333/unit. It is improved with three, two and one-half-storey walk-up apartment buildings that were constructed in the late 1950â€™s.
There were no transactions in the SPECIAL building market.
There were nine vacant LAND transactions during the month of May for a total consideration of $16,435,000. Of the nine transactions, there were four residential land sales, two future growth land sales, one commercial land sale, one industrial land sale and one rural land sale.
The most notable transaction was the assembly of two sites on Lisgar Street by Richcraft Homes. The purchase price (after adjusting for a 100%) was $6,955,000 or $267/sf of site area.
Another interesting transaction was for a 49-acre parcel of un-serviced future development land located on the north side of Old Montreal Road, just outside the urban boundary. The property was acquired by Tamarack (Cardinal Creek) Corporation from Word of Life Church (Ottawa/Hull) for $2,580,000 or $52,722/acre. It is reported the purchaser intends to subdivide the property and develop it with detached single family homes once zoning permits.
The second quarter market surveys have been released from all of the brokerage houses.
DTZ Barnicke is reporting an overall vacancy rate of 7.7% for office space in the City, which is down 11bps from the previous quarter. The vacancy rate for the downtown core saw its first decrease in nine consecutive quarters, falling 38bps to 5.2%. Vacancy is expected to rise later in the year however due to space coming onto the market as a result of the completion of the EDC building. The Kanata submarket is looking brighter as it experienced positive net absorption for the first time in three quarters. Ericsson Canada has announced they will be relocating from the former Notel Campus to 349 Terry Fox Drive in Q3 2012. Colliers' second quarter office survey reports overall vacancy for the City to be 6.7%, down from 7.0% the previous quarter. Vacancy in the downtown core was reported to be 5.4% while the Kanata market sits at 11.8%. Colliers reports the Kanata office vacancy rate to be misleading as the majority of the vacant space was designed for larger tenants (15,000-20,000 square feet). The availability rate for the typical Ottawa office user's size requirement (3,000-6,000 square feet), according to Colliers, is at 1.53%.
Cushman & Wakefield Ottawa reported overall vacancy for office space in the City decreased half a percentage point to 7.4%. The rebound comes as result of leasing activity from the federal government and private sector. The second quarter vacancy rate was reported to be 5.1% in the downtown core and 17.2% in Kanata. Over the next quarter, vacancy is predicted to remain flat however could rise in Q4 2011.
CB Richard Ellis reports overall vacancy for office space in the City decreased to 6.6% from 6.7% the previous quarter. Vacancy in the core is reported to have decreased to 4.4% from 5.0% the previous quarter. Vacancy in Kanata was reported to be up 40bps quarter-over-quarter to 15.8%. This increase is being attributed to the private sector's continual contraction of space.
In terms of the Industrial Market, CB Richard Ellis reports the availability rate in the City has decreased 110bps quarter-over-quarter to 5.4%. Strong leasing activity in the East and Deep West submarkets had been cited as the cause of the overall positive absorption.
Cushman & Wakefield Ottawa reports industrial vacancy has fallen 0.8% to 6.3% in Q2 2011, which marked the most significant quarter-over-quarter change in nearly two years. The western submarket was cited as the biggest contributor to the overall positive absorption. Looking to the second half of the year, vacancy is expected to remain relatively stable with 80,000 square feet set to enter the market.
The local unemployment rate as reported by Statistics Canada for the month of May decreased to 5.9% from 6.3% in April. The provincial rate for May however remained unchanged from the previous month. The national overall unemployment rate fell to 7.4% from 7.6% a month prior.
According to CMHC's news release, the number of residential units under construction decreased 12.6% this year over last year to 4,723 units. Further, Housing Starts for the month of May have shown a significant 62.5% decrease year-over-year, from 709 units in 2010 to 266 units in 2011. Year-to-date housing starts have decreased 19.9%, from 2,257 units in the first five months of 2010 to 1,808 units in the first five months of the current year.