The new Ottawa trend of full-service, “live, work, play” neighbourhoods will continue to change the city’s landscape and with it, the commercial real estate market, according to CBRE.
In its 2015 outlook released Monday, the company said projects such as Lansdowne Park and Windmill Development Group’s plan for a mixed-use community at the old Domtar Lands are changing the old model of residents living in the suburbs and commuting to work downtown.
With the Department of National Defence consolidating at the old Nortel Campus and the Communications Security Establishment moving to the east end in the coming year, CBRE said the downtown core will continue seeing higher vacancy rates in 2015.
CBRE Ottawa vice-president Shawn Hamilton said the government’s changing real estate strategy is “impacting everything.”
“With the federal government downsizing and very little private sector demand downtown, the market is really quite flat,” Mr. Hamilton said in the outlook.
CBRE is also suggesting many businesses and government agencies are “pressing the pause button” until the 2015 federal election to see whether that will bring a change in the federal government’s strategy.
In the meantime, the report also forecasts other trends that will continue include tenants moving from older Class A to newer Class A buildings, and Class C tenants moving to Class B space.
“We’re coming to a crucial point for Ottawa’s aging buildings,” said Mr. Hamilton. “Owners will increasingly need to consider refurbishing or demolishing office properties.”
To the west, Mr. Hamilton said he expects growth and recovery to continue in Kanata, where the technology sector appears to be on an upswing.
CBRE said the industrial market, which is also closely tied to government activity, isn’t expected to change much in 2015.
Mr. Hamilton said infrastructure projects such as the LRT and an expanded Hwy. 417 will also have an affect on the city.
“In moving from a small city to a larger city, we’re leaving the old Ottawa behind. It will be exciting to see what happens next,” he said.