When it comes to the merits of turning obsolete offices into residential complexes, Jason Shinder doesn’t need to be converted – he’s already a believer. Shinder is CEO of District Realty, which pioneered the concept of transforming aging office spaces into rental housing in Ottawa more than a decade ago when it converted the top […]
Get Instant Access to This Article
Become an Ottawa Business Journal Insider and get immediate access to all of our Insider-only content and much more.
When it comes to the merits of turning obsolete offices into residential complexes, Jason Shinder doesn’t need to be converted – he’s already a believer.
Shinder is CEO of District Realty, which pioneered the concept of transforming aging office spaces into rental housing in Ottawa more than a decade ago when it converted the top five floors of a building at 169 Lisgar St. into bachelor, one- and two-bedroom apartments.
Since then, the firm has notched two more conversions on its belt: an eight-storey building at 170 Metcalfe St. that it repurposed as apartments several years ago, and its latest project, the redevelopment of an 11-storey former office building at 200 Elgin St. into more than 120 rental units that’s expected to be finished this fall.
Now, Shinder and his team are sizing up another potential conversion at 25 Nicholas St., near the corner of Rideau Street.
District acquired part of the 21-storey building in January, buying floors 10 through 21 as well as half of the ground floor from the Properties Group for $30 million. The Department of National Defence currently occupies most of that space, which totals about 150,000 square feet, on a lease that expires next January but includes an option for DND to renew.
Public Services and Public Procurement Canada, which manages the federal government’s office real estate portfolio, has until the end of May to make up its mind about the renewal. Shinder says regardless of what the feds decide to do, he’s happy with his firm’s latest purchase.
“I’m not looking at this as a two-year play or a three-year play,” he says. “In the fullness of time, whether it’s office or whether it’s apartments, I like it as both. At the end of the day, we just love the location. I define it as just being good concrete.”
In Shinder’s view, there’s a lot to like about the building, which was constructed in 1989.
For example, District has an agreement to share amenities with the DoubleTree by Hilton Hotel, which operates under separate ownership on the first nine floors. That means tenants would have access to perks like a pool, gym and an outdoor courtyard.
In addition, he says the site’s proximity to the Rideau Centre and its light-rail stop, the University of Ottawa and the ByWard Market would make it an ideal address for students and young professionals.
“It always looked like a good place to live,” he says. “It has all the characteristics to be a good home for somebody. It’s versatile as a location – it can be a hotel, it can be an office, it can be an apartment building. Any of the above, it will be a good location where the occupant will be happy.”
Still, like some other local developers who are currently eyeing potential office-to-residential conversions, Shinder is keeping a close eye on where the rental market is heading – and that trajectory will ultimately determine his plans for Nicholas Street.
Two years ago, when his firm began tearing out the guts of 200 Elgin, conversions were all the rage in the National Capital Region.
As tenants fled class-B and C office space in droves in the wake of the pandemic, turning empty suites into rental apartments became an increasingly attractive proposition for landlords and developers looking for better uses for such buildings.
Besides District, other firms such as CLV Group and Katasa Group snapped up large, sparsely occupied downtown office buildings with the goal of repurposing them.
The spate of conversions coincided with a surge in new apartment construction as a rise in immigration and a flood of post-secondary students after COVID restrictions were lifted fuelled greater demand for rental units than landlords could handle.
According to the Canada Mortgage and Housing Corp., there were a record-high 11,000 new rental apartment units under construction in Ottawa at the end of December, up from just over 4,000 two years earlier.
But all those new builds came just as the federal government began to clamp down on immigration and reduced the number of foreign students it allowed into the country – slamming the door on a significant chunk of the rental market’s biggest customer base.
Consequently, Ottawa’s rental apartment vacancy rate rose to three per cent in 2025, CMHC says, up from 2.6 per cent in 2024 and 2.1 per cent the previous year. And the vacancy rate for newer units built after 2015 was even higher at 6.7 per cent.
Dampened demand
“It’s hard to have conviction in investing in the housing market when our government’s agenda seems to be shrinking the population,” Shinder says. “There’s only one thing that drives demand for housing, and that’s people.”
Meanwhile, the feds are also in the midst of a long-term campaign to shed about 40,000 jobs from the public service, and Shinder worries that could dampen demand for apartments from another major market segment: young professionals who work for the region’s largest employer.
“It’s very challenging to start a career in Ottawa,” he says. “That scares me. The fact that no one’s looking for first-time employment at the federal government … and we don’t have any migration of young people coming to work here, that needs to end.”
To Shinder, it’s a pretty simple equation: a glut in supply means less competition for available suites, which translates to lower rents. According to CMHC, average rental rates in Ottawa rose by 3.4 per cent last year, down from five per cent the previous year.
“It all stems from what the (rental) income is,” Shinder adds. “If the income can support the (conversion) costs, then great. If the income can’t, then you’re probably not going to do it.”
At 200 Elgin, the first tenants started moving in on April 1. District has leased 10 of the 122 units so far, and Shinder, who joked, “I hope to have full occupancy yesterday,” is crossing his fingers that the building will fill up.
“The absorption will be interesting to watch,” he says. “It’s a competitive marketplace, especially downtown right now. There’s a lot of units available. There are still a lot of buildings in the absorption stage. For people looking to live in Centretown, downtown, there are a lot of options.”
Shinder isn’t the only local developer weighing the pros and cons of a potential office-to-residential conversion.
At Gatineau-based Devcore Group, CEO Jean-Pierre Poulin is also in wait-and-see mode. His firm has the green light to start ripping out the interior of satellite provider Telesat’s former headquarters in Gloucester and turn it into 225 rental suites.
Devcore purchased the four-storey, 230,000-square-foot building in 2024 for $16.1 million with the intent of doing a conversion. But Poulin says after “a couple of opportunities came along” to potentially lease the space to new office users, the company decided to test the market.
Devcore recently retained brokerage firm Avison Young to find occupants for the building, with the hope of landing an anchor tenant to occupy 50,000 to 75,000 square feet and other users to take over the rest.
“There’s some demand for high-end (office) properties like that,” Poulin explains. “If we can, we will lease it up and keep it as a commercial (property).”
The veteran developer, whose firm has built thousands of rental units, says he’s not souring on apartments – far from it. Much like Shinder’s assessment of 25 Nicholas, he thinks the former Telesat HQ, which is just a few hundred metres from the Blair LRT station, would make a great home for students and young professionals.
But he also knows transforming an office complex – even one that’s got great bones like Telesat Court – into a multi-residential development isn’t for the faint of heart. While he says the building could make for an “interesting residential play,” he notes that such projects are typically fraught with complications and challenges.
“A conversion (needs) more effort, more time, more resources,” Poulin says. “Right now, we can go either way. We’ll know in a couple of months. We’re patient.”
For his part, Shinder says he’s still bullish on conversions.
The city, he notes, has simplified the application and approval process for turning offices into apartments. It’s eliminated annoyances such as the need to obtain minor variances to setback rules at existing buildings, for example, and it no longer imposes other costly and time-consuming requirements such as installing new stormwater retention systems on properties that already have them, he explains.
In addition, the city also reduced the fees developers are required to pay in lieu of parkland at highrise building sites slated for conversion in the downtown core – another cost that irritated developers like Shinder.
“It still takes time and there are still a lot of hoops, but there is no question that the City of Ottawa wants to be a partner in adding more units and in doing conversions and finding the best use for properties, particularly in the downtown, Centretown, ByWard Market area,” he says. “You’re not fighting an uphill battle to get it done.”
The earliest District’s crews could start tearing out the offices from 25 Nicholas would be some time next year, Shinder adds. It’s not a sure thing yet, but he sounds like he’d be perfectly fine with the idea.
“I’m comfortable with the economics (of the conversion),” he says. “I don’t think it’s a deal that’s going to make anyone rich. I think it’s just going to be a good, long-term asset.”
