The National Capital Region’s real estate investment market is seeing “a lot of activity” even as securing capital still remains “challenging” for some buyers, a leading Ottawa broker said this week.
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The National Capital Region’s real estate investment market is seeing “a lot of activity” even as securing capital still remains “challenging” for some buyers, a leading Ottawa broker said this week.
“It’s busier than I would have expected it to be,” Graeme Webster, principal at Avison Young’s capital markets group in Ottawa, told OBJ in an interview on Thursday. “There are buyers for virtually every asset class right now.”
Avison Young is shopping a number of major office properties in the region, including the Carling Executive Centre at 1525, 1545 and 1565 Carling Ave.
Crown Realty Partners now owns the three-building, 291,000-square-foot office complex in the city’s west end, which has been on the market since October 2023.
Asked for an update Thursday, Webster said the property has been “conditionally sold” to a local group that is “not an institutional buyer.” He would not provide any further details because the transaction is still in the due-diligence stage.
“There’s still a lot of (hoops) to jump through, but it’s moving in the right direction,” he said.
“Any deal of this magnitude takes time to move through the market, to really establish pricing, despite even other office buildings being sold that are somewhat comparable,” Webster added.
“Every deal, pricing is almost redefined. I would say there’s not true equilibrium in the market for deals of this magnitude. A lot of deals are working themselves through the market and establishing new benchmarks.”
Echoing a theme expressed by executives from Colliers earlier this month, Webster said many would-be buyers scoping out commercial real estate in Ottawa are local groups looking to fill the void left by institutional investors that are reassessing their portfolios.
The total volume of commercial deals in Ottawa was down slightly last year compared with 2023, according to Colliers. Office sales accounted for just two of the city’s top 10 transactions in 2024 as institutions such as big pension funds and real estate investment trusts – traditionally two of the major drivers of investment activity – continue to shy away from a sector that’s still in flux as tenants sort out working arrangements in a post-pandemic world.
“Typically in a market shift, we see (institutional investors) to be the last ones entering and the first ones exiting when things change,” Webster explained.
“So with a lot of institutions still on the sidelines, it’s provided space for private, local groups to become active again. I think we’re seeing that trend across the board with virtually every asset class we’re selling right now. It’s been predominantly private buyers that have been active.”
While interest rates have been falling since last year, Webster said it’s “still challenging” for buyers to raise capital as lenders have tightened their purse strings.
“It’s easier than it was to get debt about a year ago,” he said. “Rates have dipped, and deals are starting to make sense again. But I wouldn’t say it’s simple.”
Meanwhile, Webster said the trade war between Canada and the United States has had little effect on deal velocity in most asset classes so far.
“Things happen every year, and we always wait to see how the market is going to shift,” he said. “The reality is, a lot of the local buyers still believe in the fundamentals (of commercial real estate). If the lenders are still there and they’re still providing liquidity and the buyers see Ottawa as a safe place to invest, transactions are still going to happen.”
