Extended Stay hotel, Rideau Street LCBO land sales lead first-half Ottawa investments

LCBO
Westdale Properties purchased the property at the corner of Rideau Street and King Edward Avenue, leased to the LCBO, for $24 million earlier this year. (Google Street View image)

Despite a soft second quarter, commercial real estate experts say they’re expecting 2017 to be “one of the most significant years on record” for investment sales in Ottawa.

The local office of real estate services firm CBRE said in a report last week that the investment market lost some steam in the second quarter, with transactions totalling $304.6 million. That’s a 9.5 per cent decrease quarter-over-quarter and represents the lowest second-quarter volume since 2011, CBRE stated.

However, the brokerage firm said several “large-scale” office and retail transactions are expected to close before the end of the year and give a significant boost to the city’s 2017 totals.

While CBRE did not name those properties, one of the high-profile office buildings currently on the market is the Constitution Square complex downtown. It’s expected to be purchased by a consortium led by Montreal developer Canderel in a deal that would be one of the biggest local real estate transactions in recent history.

Notable transactions

According to CBRE, the largest transactions by value in the first half of 2017 include:

  • The Extended Stay Canada hotel at 131-141 Cooper St., which was purchased by a numbered Canadian company for $36.3 million, or $174,519 a room;

  • 61 Bill Leathem Dr. in Barrhaven, which was purchased by True North Commercial REIT for $31.5 million. The building is occupied by VIAVI Solutions (formerly JDSU) and was previously owned by Minto;

  • Mattamy Homes’ purchase of 14 acres of development land in the former CFB Rockcliffe for $27.55 million, or $1,974,910 an acre; and

  • Westdale Properties’ $24-million purchase of the land at the corner of Rideau Street and King Edward Avenue that’s currently leased to the LCBO.

The land purchase represents a re-entry into downtown Ottawa for Toronto-based Westdale Properties, which currently owns a shopping plaza on Walkley Road and a retail property leased to Fabricland on St. Joseph Boulevard in Orléans as well as dozens of multi-residential, commercial and industrial properties across Ontario. The company also has holdings in Halifax, Regina and Dallas.

“We’ve always liked Ottawa. It’s a great real estate market,” Mitchell Cohen, Westdale Properties’ chief operating officer, told OBJ in an interview.

He says the company has no plans to alter or expand the building.

“We’re happy to be a landlord of the LCBO,” he said. “It’s a signature corner with a great long-term tenant.”