Local commercial real estate sales fell by nearly a third in the first quarter of the year as uncertainty over the city’s office market continued to weigh on the minds of investors, according to a new report from Colliers International.
Nearly $180 million worth of real estate changed hands between January and March, down from almost $261 million a year earlier. The number of sales also declined, dropping from 35 transactions to 26.
This was primarily due to a softening in the office market. There were five office transactions totalling $86.76 million in the first quarter, down from 10 sales worth $168.22 million in the same period in 2013.
OBJ360 (Sponsored)
Vegan? Halal? Gluten-free? This Ottawa restaurant has you covered
For food lovers who have dietary restrictions, it can often be a challenge to find a restaurant that checks all the boxes.
Wonder and amazement is what you’ll discover at these Ottawa museums
This summer, embark on a journey where curiosity knows no bounds by stepping into the world of innovation and wonder at these Ottawa Museums.
“Prospective buyers remain concerned about the potential for increased vacancy in the short term, which is reducing demand for any non-central office buildings in the city,” wrote Oliver Tighe, director of Colliers International Valuation & Advisory Services Ottawa, in the report.
The real estate services firm added that while investors’ interest in Ottawa may have waned, the city’s stability and relatively low cost means it remains an attractive market to potential purchasers.
This has contributed to Ottawa’s capitalization rates – one measurement of return that’s calculated by dividing a property’s net operating income by its purchase price – remaining at historically low levels, according to Colliers.
“Cap rates will continue to remain low for good quality core assets, though dated buildings with less central locations will likely see cap rate escalation given the strong potential for vacancy,” Mr. Tighe stated.
Top Q1 transactions:
234 Laurier Ave. W.
Purchaser: Outcore Equities
Asset class: Office
Square footage: 452,000
Price: $75.75 million (50% interest)
175 Bronson Ave.
Vendor: The Regional Group
Purchaser: Paramount Properties
Asset class: Multi-family residential
Units: 129
Price: $17.5 million
50 Selkirk St. / 350 Mayfield Ave.
Vendor: Starlight Apartments
Purchaser: Killam Investments
Asset class: Multi-family residential
Units: 136
Price: $12.5 million
464 Bank St. / 383 McLeod St.
Vendor: Tommy & Lefebvre
Purchaser: 2401662 Ontario Inc.
Asset class: Retail
Square footage: 20,707
Price: $8.1 million
700-702 Bank St.
Vendor: PCL Holdings
Purchaser: Goldmanco
Asset class: Retail
Square footage: 11,000
Price: $7.5 million
225 Wilbrod St.
Vendor: Imac Realties
Purchaser: Manor Park Estates
Asset class: Multi-family residential
Units: 60
Price: $7.5 million
