While many developers are acquiring land and readying properties in already-popular neighbourhoods, the actual construction of high rise projects depends on an increase in office space demand and continuing strength of the local condo market.
“Business spurs development. Rail lines, on their own, don’t spur development,” says Kelvin Holmes, managing director of Colliers International’s Ottawa office.
What LRT is prompting, he adds, is land acquisitions, property assemblies and speculation.
“When demand does come, (developers) are going to want to be around transit stations.”
Light rail may draw developments a few blocks closer to transit stations, but it is the availability of land and the popularity of neighbourhoods such as those around Tunney’s Pasture that is attracting developers in the first place.
The following are some of the properties to watch around the planned light-rail line:
While the federal government says it will eventually redevelop its massive office complex that lends its name to the current Transitway station, most of the opportunities around the western terminus of the light-rail line are residential projects.
Several condo buildings within walking distance of Tunney’s Pasture are currently under construction or were recently completed, including Mastercraft Starwood’s 15-storey SoHo Parkway on Parkdale Avenue and Domicile’s eight-storey One3One at the corner of Holland Avenue and Wellington Street West.
In April 2011, Urbandale purchased slightly less than 15,000 square feet of land near the north end of Parkdale Avenue, close to the Ottawa River Parkway, for $3.15 million, or $212.59 a square foot. The company is expected to build a 28-storey condominium tower on the site after the city’s planning committee endorsed the homebuilder’s rezoning request earlier this month.
Barely a block south, Richcraft paid $208 a square foot for 159-163-167 Parkdale Ave., according to Tom Brethour, a vice-president at DTZ Barnicke.
He says previous prices for land in the area averaged $75 to $100 per square foot.
Property sale records show that a few blocks south, at Scott Street, Richcraft acquired roughly 12,500 square feet of land at the southwest corner for $2.9 million, or roughly $234 a square foot.
However, the biggest redevelopment opportunity is the 49-hectare government complex, which contains a handful of aged office buildings surrounded by sprawling parking lots and green space. Public Works says it is preparing a master plan for the campus to make “more effective and efficient use of the site land.” That report is expected to be completed next year.
Developer DCR Phoenix owns a 5.3-acre vacant plot of land directly across from the existing Transitway station. The developer has submitted several plans for the site since 2004, frequently running into opposition at city hall because critical underground water and sewer lines criss-cross the property.
The developer is currently proposing three office towers of seven, 31 and 34 storeys, containing a total of more than 1.7 million square feet of space. If constructed, it would be the city's tallest office tower. However, some question how DCR Phoenix would fill those buildings, with the federal government downsizing and private-sector demand for office space relatively flat.
Across the street, the old 16-acre Bayview snow dump will be used as an LRT construction staging area, says Gord MacNair, the director of the city's real estate partnership and development office. In the long term, the land has "significant development potential," he adds.
The National Capital Commission intends to continue to develop its lands around the existing Transitway station, and says the property will eventually contain 4,000 to 5,000 residential units, 215,000 square feet of retail space and more than 860,000 square feet of office space.
The lowrise nature of the residential neighbourhoods to the south suggest any developments would likely be small-scale infill projects, Colliers officials say.
The station itself will be located beneath Queen Street, between Kent and Lyon streets. Brookfield Properties owns the Place de Ville office towers on either side of Queen Street, which are connected by an underground walkway. Two years ago, Brookfield filed plans with the city to turn the four-storey “podium” building on the north side into a 19-storey building.
To the southeast, Brookfield also owns the surface parking lot fronting Kent Street, between Queen and Albert streets. Brookfield has marketed the site as an office building with more than a half-million square feet for several years.
To the southwest, condo builder Claridge owns the 41,354-square-foot development site fronting Lyon Street, between Queen and Albert streets. One block south, Alterna Savings is undertaking a “strategic review” of its real estate holdings, which include the three-storey downtown office on Albert Street, between Lyon and Bay streets. It sits on slightly less than 53,000 square feet of land and was once touted as a future home for the city’s central library. The property is said to have been conditionally sold to a condo builder.
Apart from Metcalfe Realty’s surface parking lot at the corner of Metcalfe and Slater streets, there are few intensification opportunities in the northeast corner of the central business district, Colliers staff say.
The station itself will be below Queen Street, between Bank and Metcalfe streets. Most of the surrounding area is built up, with the exception of the federal “Canlands A” site between Sparks and Queen streets, west of Metcalfe Street. The National Capital Commission awarded Ashcroft the right to develop condominiums and hotel rooms on the site several years ago.
Metcalfe Realty’s portfolio between Albert, Slater, Metcalfe and O’Connor streets consists of several relatively small and old office buildings. Some say the company will face challenges keeping its buildings full as the federal government lessens its downtown presence and landlords lower their rental rates. However, observers predict Metcalfe Realty will likely renovate its buildings to attract tenants and that redevelopments are unlikely in the short term.
The Rideau Centre owns two development sites – one fronting Rideau Street, the other along Nicholas Street. A new high-end hotel and an expansion of the mall have long been discussed for the properties.
The northeast corner of Sussex Drive and Rideau Street is “due for an upgrade,” Colliers officials say, predicting the federal government is unlikely to stay in the eight-storey office building on the corner. Meanwhile, changing industry trends may prompt a rethink of the low-density large-format Chapters bookstore behind it.
The University of Ottawa is the major landowner in the area and is expected to continue purchasing properties in Sandy Hill as they come onto the market.
The surrounding residential neighbourhoods may see some small-scale intensification, especially if the University of Ottawa’s off-campus housing needs continue to increase.
Despite sitting next to a large expanse of vacant land, there is minimal opportunity to develop the lands between Riverside Drive and the Rideau River. The NCC owns more than 103 acres, some of which it describes as “development.” However, Colliers senior vice-president Jeff Brown says builders are likely to pass on Hurdman, given the more lucrative opportunities immediately to the east.
The proximity of this station to the Queensway and existing amenities make it an attractive area for developers. The Ottawa Train Yards retail power centre continues to expand, and the ample surface parking lots can be redeveloped as market conditions evolve.
One federal office building is currently under construction on Terminal Avenue, and Ottawa Train Yards Inc. and Via Rail both own development sites slated for office buildings south of the railway tracks.
The light industrial and lowrise office buildings located immediately east of the Via Rail station on Tremblay Road are also candidates for redevelopment. The larger buildings are occupied by Dustbane Products Ltd. and the Professional Institute of the Public Service of Canada.
Landlord Morguard has already obtained the rezoning it needs to expand the St. Laurent Shopping Centre and add more than 200,000 square feet of additional retail space. Office buildings are also ultimately envisioned.
On the other side of the Queensway, the federal government purchased its 30-acre development site from the province in 2009 for $25 million. A media report said it is to become the new headquarters of the Canada Border Services Agency, housing 4,300 federal employees.
In the long term, development is likely on the southeast side of the St. Laurent / Highway 417 interchange, but Colliers staff say assembling the land will be complicated. Furthermore, they add, demand is currently insufficient to warrant its redevelopment.
Large surface parking lots surround the three buildings between the Queensway, Cyrville Road and Labelle Street. The Queensway Corporate Campus portfolio was purchased as an investment by a personnel support branch of the Department of National Defence in 2010 for $56.8 million. The three buildings total approximately 285,000 square feet. The 14.5-acre site has the capacity for two additional 100,000-square-foot multi-storey buildings.
On the office front, Bentall Kennedy is marketing design-build opportunities for more than 117,000 square feet of space in the second phase of its City Park Place development.
However, the short-term redevelopment potential is in the Gloucester Centre and SilverCity lands to the north of the transit station. New stand-alone retail buildings are taking over pockets of parking areas and the shopping centre itself could one day be redeveloped when the format no longer works, says Colliers’ Mr. Brown.
“One day, Gloucester Centre will come down … but it won’t be initiated by light rail. It is not going to automatically change things.”