West-end office building sold to Vancouver firm for $9.35M

2625 Queensview Dr.
Vancouver's Lanyard Group of Companies has bought this building at 2625 Queensview Dr. Photo courtesy Koble Commercial Real Estate and Brokerage

A Western Canadian firm has acquired a west-end Ottawa office building as the capital’s commercial real estate market continues to see a string of deals even as rising interest rates threaten to stall its momentum. 

Koble Commercial Real Estate and Brokerage announced last week it brokered the sale of a two-storey office building at 2625 Queensview Dr. to the Vancouver-based Lanyard Group of Companies. The building, which is located on 2.7 acres of land near the future Queensview LRT station, sold for $9.35 million with a cap rate of 6.34 per cent.

The 46,500-square-foot building, located a block north of the Queensway and just east of Pinecrest Road, now has a vacancy rate of about 30 per cent after the City of Ottawa recently left the space. Remaining tenants include SCM Insurance Services, the Queensway-Carleton Hospital and PIP Animation Services.

Graeme Webster, a partner at Koble, said the property’s close proximity to light rail and the Queensway as well as its ample parking lot with 171 spots were among the attributes that attracted Lanyard’s interest. 

He said a number of potential tenants have already toured the building’s available space, adding Lanyard views the vacancy as a “short-term issue that they can solve.” 

“Retaining employees, you’ve got to have a great place to work,” he said. “The buyer … really saw this asset as checking all those boxes for the future of the workplace.” 

News of the sale follows a second quarter that saw Ottawa’s office vacancy rate tick up to 9.7 per cent while net asking rents fell slightly. 

“There’s been a slowdown,” Webster conceded. “There are some cautious buyers out there. They can’t get the returns they could get six or seven months ago, so they’re waiting on the sidelines.”

But the veteran broker said Koble is still enjoying its best year since it was founded in 2014, adding the Ottawa market remains a sought-after play for savvy investors. The firm also recently announced it brokered the sale of a three-storey, 12,000-square-foot office building at 376 Churchill Ave. N. in Westboro.

“The reality is, well-located office (space) with strong amenities should be in demand for (a long) time to come,” Webster said.