{"id":555,"date":"2019-04-03T20:35:18","date_gmt":"2019-04-03T20:35:18","guid":{"rendered":"https:\/\/proveras.com\/?post_type=reports&p=555"},"modified":"2020-04-25T14:44:40","modified_gmt":"2020-04-25T14:44:40","slug":"ottawa-insight-spring-2019","status":"publish","type":"reports","link":"https:\/\/proveras.com\/website_ddcbdfbd\/reports\/ottawa-insight-spring-2019\/","title":{"rendered":"Ottawa Insight – Spring 2019"},"content":{"rendered":"

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Ottawa is Hot<\/h3>\n

Ottawa\u2019s office market is blazingly active. With few exceptions, office tenant demand in 2019 across all building classes (especially Class A and B) and across all geographical submarkets continues to rise, with corresponding increases in rental rates. Locally, downtown Ottawa and Kanata are leading the pack in office space demand. Kanata, in particular, has little existing space remaining for lease. Ford Canada\u2019s 40,000 square foot commitment has helped kick off the construction of a new building near the Canadian Tire Centre. Several other Kanata firms are following similar paths elsewhere in the west end to secure space within the next 2 years.<\/p>\n

In 2018, Ottawa experienced its highest space absorption rate in 12 years. Leasing, principally by the Federal Government and the technology sectors, has resulted in the absorption of over 700,000 square feet from Jan-Dec 2018.<\/p>\n

Because no new office supply was added during 2018 (i.e.., no buildings were constructed), companies who need more space and aren\u2019t able to wait for a new building to be built — which can take 2+ years — have had to relocate to existing Class B buildings. As a result, the vacancy rate for Class B inventory has fallen too.<\/p>\n

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Zibi is Coming<\/h3>\n

By late 2019, the first commercial buildings at the \u201cZibi\u201d development (located on both the Chaudi\u00e8re and Albert Islands between downtown Ottawa and Gatineau) will come onstream. Zibi is expected to be a huge office \/ residential \/ retail sustainable environment. Although several concerns remain, including transportation access, excitement is building in many quarters over the potential of this development.<\/p>\n

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2019 Predictions<\/h3>\n

We expect demand for office space by the public sector to dampen temporarily for the next 6 months as Ottawa gears up for the next federal election this October. However, professional service and technology firms remain active with over 400,000 square feet of tenants currently searching for space.<\/p>\n

Although Kanata remains the traditional epicenter of high technology firms over 10,000 square feet, we are now witnessing a surge in the number of technology companies central and central-east who, even once they become large, do not wish to leave the areas in which they are established but rather find larger options in the immediate vicinity. Examples of this trend include Assent Compliance, Klipfolio, Fullscript and Shopify.<\/p>\n

We expect to see tightening conditions continue through 2019 as little new construction is underway that isn\u2019t already pre-leased. However, the following may contribute to a stabilization of the market in the short-term, if not a window of opportunity for tenants:<\/p>\n