Avaya Corp., which purchased Nortel Network Corp.'s enterprise solutions business for US$915 million in 2009, has signed a 10-year lease at 425 Legget Dr. with property management and development firm Canderel.
"It will house all of our approximately 375 employees, alongside our labs and a customer demo space," wrote Roy MacLean, Avaya's Ottawa site leader, in an e-mail to employees last week.
"Significant investment will be going into this facility and, in the coming weeks, we will select a design company to help us adapt the interior to our needs."
The company said it will occupy 104,000 square feet, or virtually all of the listed space inside the 15-year-old building, around this time next year.
The property is located at the corner of Solandt Road in the Kanata North Business Park. An undated brochure showed the facility is a mix of office, warehouse and manufacturing space that could be reconfigured depending on the nature of the tenant's operations.
Canderel's website listed the asking rent as between $7 and $12 per square foot, plus $4.95 a square foot in taxes and operating costs.
Earlier this year, Ericsson Canada announced it was leasing approximately 200,000 square feet from Kanata Research Park at 349 Terry Fox Dr. The move, which will displace several startups subleasing space inside the facility, is scheduled to take place next summer.
Ericsson, which purchased several business units from Nortel in deals totalling more than US$1.5 billion, is the largest of the tenants inside the former Canadian tech giant's campus, now branded Carling Place.
A year ago, Public Works agreed to purchase the 2.35-million-square-foot complex from Nortel for $208 million to consolidate the operations of the Department of National Defence.
Ericsson and Avaya were under the most pressure to find new accommodations, with leases expiring as early as late 2012.
Genband said its 400 employees currently occupy approximately 200,000 square feet under a lease expiring in late 2014.
Ciena, which has approximately 1,200 employees in Ottawa and is believed to occupy roughly 265,000 square feet, said it is not required to leave Carling Place until March 2015 at the earliest.
Nevertheless, some in the real estate industry say time is not on Ciena's side, given its need for specialized high-end lab space and the possibility it may have to construct a new building.
Several sources said the company was exploring build-to-suit opportunities this summer for a facility of approximately 335,000 square feet. However, they said there were challenges in pricing such a property due to a lack of detailed technical specifications and concerns among landlords about their ability to fill the single-purpose lab space once Ciena's lease eventually expires.
The company is also said to have looked at existing space inside 500 Palladium Dr.
The movement of the Nortel buyers is creating a flurry of activity in the Kanata market, which had a vacancy rate of 17.2 per cent at the end of the second quarter, according to statistics from Cushman & Wakefield Ottawa. But one observer said it is a short-term phenomenon with supply expected to continue to surpass demand.
"This is a blip," said Bruce Wolfgram, vice-president of office leasing at Primecorp Commercial Realty Inc.
"The Kanata marketplace still has some challenging times ahead."