A rising Ottawa commercial real estate firm that’s poised to branch out into multi-residential development has purchased a prominent downtown office building as it continues to build its portfolio in the capital.
Jennings Real Estate said this week it acquired a 12-storey office tower at 141 Laurier Ave. W. – better known as the Gillin Building – from family-owned local firm Gillin Engineering and Construction. The company would not reveal financial terms of the transaction, which closed on June 30.
Located just west of Elgin Street a stone’s throw from City Hall, the 110,500-square-foot class-A highrise was built by Gillin and opened in 1964.
Its tenants include the City of Ottawa, the Canadian Home Builders’ Association and well-known local accounting firm McCay-Duff.
“We really think the building has held up well from a looks perspective,” said Jennings Real Estate co-owner Ken Jennings, who founded the firm with his brother Christian in 2018.
Calling the building a “marquee” property, Jennings praised its distinctive art deco-style architecture and “great roster of tenants.” He also said the 10,000-square-foot floorplates are ideally suited to being subdivided into smaller chunks suitable for clients in sectors such as professional services and tech.
“That … really hits the mark for a lot of different-sized tenants,” explained Jennings, a 2021 Forty Under 40 award recipient.
The building’s last significant renovation was about 20 years ago. Jennings said his firm will work with local designers and contractors to modernize the lobbies, hallways and common areas – “just kind of putting our own touch on it but trying to keep the classic look.”
The building is currently about 90 per cent occupied. Lindsay Hockey and Oliver Kershaw, principals at Avison Young’s Ottawa office, have been brought on board to help fill the remaining vacancies, and Jennings says the veteran brokers will also be valuable sounding boards when it comes to upgrading the building’s interior.
“They know what tenants are looking for,” he said. “We’re leaning heavily on them and are really looking forward to working on this one with them.”
Jennings now has 11 buildings totalling more than 450,000 square feet in its management and ownership portfolio, including several industrial properties in Nepean and Kanata and office buildings on Hunt Club and Walkley roads.
The Gillin transaction is the young company’s largest to date. It marks another step in the Jennings brothers’ long-term strategy to grow the firm into a major player in the Ottawa real estate scene, a road map that also includes plans to branch out into property development.
Bullish on office market
Jennings said the nine-employee firm hopes to break ground next year on a pair of mid-rise multi-residential projects that will also include commercial space, one at a downtown site and the other just outside the core.
While it’s dipping its toes into the residential side of things, the company sees a bright future for the office sector in the capital.
According to CBRE, Ottawa’s downtown vacancy rate dipped slightly in the second quarter, from 10.7 to 10.6 per cent, while the class-A rate dropped 20 basis points to 7.7 per cent. Jennings said he thinks the local market will continue to tighten up as time goes on, making buys like the Gillin deal a savvy investment over the long haul.
“If we’re looking at a long-term horizon, it’s a good time to be growing our portfolio,” said Jennings, a lawyer and engineer who spent nearly eight years practising law before joining Ottawa’s Inside Edge Properties – where his brother was a principal and vice-president – as vice-president of acquisitions in 2017.
“Ottawa is a growing city from a population (and) a business perspective,” he added, arguing that musings common in the early days of the pandemic that organizations would move to fully remote operations have grown quieter in recent months.
“I think it’s pretty clear that the office is not going away ... We’re cautiously optimistic in the short term and definitely optimistic in the medium and long term.”