As a commercial real estate executive in Ottawa for nearly three decades, Brian Roberts has seen his share of ebbs and flows in the industry.
He vividly remembers the halcyon days of Silicon North in the late 1990s, when, anchored by Nortel, Mitel and other tech titans, Kanata had an office vacancy rate of practically zero. When the dot-com bubble burst, the federal government was there to pick up the slack and give the office sector a boost.
“It’s always been busy, just in different ways and different types of buildings,” Roberts says of Ottawa’s commercial real estate scene. “We’ve been lucky in that respect. It’s not as boom and bust as some of the other markets in Canada.”
And now, fuelled by an e-commerce wave that started gaining momentum a decade ago and has shifted into overdrive during the pandemic, the city’s often-overshadowed industrial sector is finally having its moment in the sun.
"It’s one of the best markets in Canada for warehouse space right now."
“There’s not a lot of available space out there,” says Roberts, a vice-president and managing partner at Epic Investment Services, a Toronto-based firm that manages more than 30 million square feet of office, retail, industrial and multi-residential real estate in Canada and the U.S.
“It’s one of the best markets in Canada for warehouse space right now.”
Indeed, with Ottawa’s overall industrial availability rate sitting at a historic low of less than two per cent and rents hitting new highs, investors from across the country and beyond are taking notice – and Epic is no exception.
This week, the firm announced it is part of one of the city’s biggest industrial acquisitions in years – the $155-million purchase of 18 small-bay properties totalling nearly 700,000 square feet.
Epic is a minority partner in the deal, which was led by Colorado-based Woodbourne Capital Management. The Toronto-based company will handle all the leasing and day-to-day management of the properties, which are located in well-established industrial strongholds such as Canotek Road, Colonnade Road and Industrial Avenue and occupied by businesses ranging from construction companies to law firms.
'Nice spectrum of tenants'
“It’s a nice spectrum of tenants, from nationals to regionals to locals,” says Roberts, a University of Ottawa commerce grad who spent nearly a decade as head of the Regional Group’s commercial division before joining Epic to set up its Ottawa practice in 2007.
The 18-building collection, which was previously owned by Guelph-based Skyline Commercial REIT, includes mostly facilities of 2,500 to 3,000 square feet that were constructed between 25 and 30 years ago – well before the likes of Amazon began driving demand for mammoth single-tenant facilities with ceilings that soar five stories high.
Roberts notes that while several large fulfilment centres have either recently opened or are now in the works, they serve very different markets from the small-bay properties that Epic acquired with Woodbourne.
Few, if any, smaller industrial projects are on the drawing board in Ottawa right now, he notes, making any available space in existing facilities highly sought-after.
Given Ottawa’s limited supply of available industrial land and the regulatory and logistical hoops developers must jump through to get new projects off the ground, Roberts says he doesn’t see the market loosening up any time soon.
“It’s not a tent that somebody’s throwing up to store materials,” he says. “It’s hard to build that quickly.”
In the meantime, Roberts says Epic will continue to seek other opportunities to expand its local footprint, which also includes a 74,000-square-foot industrial and flex-office space in Kanata and a 29,000-square-foot office building on Ogilvie Road that’s home to food retailer Farm Boy’s headquarters.
“Location in real estate is always the No. 1 variable,” Roberts explains. “If the building is well-situated and it makes sense, and we’ve got a client that wants to acquire, then we’re definitely in the market.”