Purchasing 1.55-million-square-foot office portfolio from GE Capital Real Estate
Ottawa’s real estate landscape is set for a shakeup as Quebec’s largest commercial property owner establishes a significant presence in the city.
Cominar Real Estate Investment Trust is purchasing 14 local office buildings and one vacant land parcel from GE Capital Real Estate as part of a larger $697-million national portfolio sale.
The Ottawa portion includes 1.55 million square feet of gross leasable area and a 3.4-acre development site. The office properties have a weighted average occupancy of 98.5 per cent, with a weighted average lease term of 4.1 years.
A GE spokesperson said the specific properties would not be identified until the sale closed later in the third or fourth quarter of the year.
However, records suggest GE only owns 14 office buildings in Ottawa, which would imply that the realty arm of General Electric will be left without any properties in the local office market.
Spokesperson Nancy Nyikes says GE will continue to have a presence in Ottawa and that GE Capital Real Estate will continue to offer commercial real estate financing services.
GE picked up 14 Ottawa office properties from Dundee REIT as part of a blockbuster $2.4-billion national portfolio sale in 2007, around the time the commercial real estate market was peaking.
For its part, Cominar REIT’s only Ottawa property at the moment is a nine-storey office building at 400 Cooper St., at Bank Street. It also owns several office and retail properties in Gatineau.
Its portfolio is heavily concentrated in Quebec and the REIT noted in a statement that the acquisition – which covers 68 office and industrial properties in Ottawa and Montréal totalling 4.3 million square feet – will increase its geographic diversification.
Ms. Nyikes said GE Capital Real Estate’s Ottawa-based employees will transfer to Cominar following the completion of the pending sale.
GE’s current director of leasing in Ottawa, Stan Humphreys, is well known in the local industry and worked for Dundee prior to its 2007 portfolio sale to GE.
The stability of the Ottawa market, combined with a strong appetite on the part of REITs and other institutional owners for quality real estate assets, makes commercial properties in the National Capital Region highly appealing to investors.
Kelvin Holmes, managing director of Colliers International, says the GE portfolio is a particularly attractive acquisition.
“There has been tremendous management and good stewardship of those properties,” he says. “They have been able to fill those buildings and keep them filled with quality tenants.”
Mr. Holmes adds that as a new player in town, Cominar could bring a new philosophy and perspective to the Ottawa market. Combined with the return of Dundee – the REIT has purchased more than $100 million worth of local assets since 2010 – Cominar’s entrance represents a significant ownership shift in the city’s real estate market.
“The landscape in Ottawa is changing,” says Mr. Holmes.
GE Capital Real Estate’s Ottawa office portfolio
222 Queen St. (204,339 sq. ft.)
110 O’Connor St. (189,600 sq. ft.)
171 Slater St. (148,705 sq. ft.)
1000 Innovation Dr. (146,170 sq. ft.)
25 Fitzgerald Rd. (120,000 sq. ft.)
1145 Hunt Club Rd. (89,339 sq. ft.)
770 Palladium Dr. (85,555 sq. ft.)
750 Palladium Dr. (80,550 sq. ft.)
800 Palladium Dr. (80,000 sq. ft.)
1 Antares Dr. (71,611 sq. ft.)
700 Palladium Dr. (63,052 sq. ft.)
35 Fitzgerald Rd. (63,003 sq. ft.)
2465 St. Laurent Blvd. (61,861 sq. ft.)
21 Fitzgerald Rd. (41,706 sq. ft.)
Source: BOMA Commercial Space Directory