A major Toronto-based real estate investment firm has added to its growing portfolio in the National Capital Region after purchasing more than 400,000 square feet of office space in the south and east ends of the city.
Crown Realty Partners says it has acquired 23 buildings in Ottawa from CanFirst Capital Management in a deal that closed in late April. Financial terms of the agreement were not disclosed.
The company said the purchase includes 415,000 square feet of low-rise office space at seven locations: the Camelot Business Park, 14 and 20 Colonnade Rd., 106 Colonnade Rd., 169 Colonnade Rd., 36-38 Antares Dr., 1140-1150 Morrison Dr. and 2301-2327 St. Laurent Blvd.
Crown Realty partner Emily Hanna said such flex office buildings are “in short supply and costly to develop” and said their overall occupancy costs are lower than traditional office buildings.
The buildings are currently more than 90 per cent leased to nearly 70 tenants in a variety of industries, including government, engineering, finance and IT.
“The diversified income stream should assist in weathering the portfolio through any storm,” Hanna said in an email to OBJ on Monday, adding that the company may consider selling some of the buildings individually in the future.
Colliers International, which brokered the deal, will continue to act as the property manager for the buildings.
Hanna said Crown Realty will launch a “reinvigorated asset and leasing strategy” for the portfolio that will include upgrades to the buildings’ facades, replacing windows and renovating common areas and outdoor spaces. She said the company also plans to convert some offices into “model suites” – borrowing from the template popularized by co-working spaces by creating ready-made meeting rooms, kitchens and work areas aimed at smaller tenants who don’t have the resources to hire architects, designers and contractors.
Hanna added the company’s plans to upgrade the buildings will be “revisited” in the wake of the COVID-19 pandemic, “depending on when we all get back to work and the changing needs of the market.”
Many real estate observers argue the COVID-19 crisis could cause tenants and landlords to rethink the way office space is designed in an effort to accommodate physical distancing and other measures aimed at containing the spread of the novel coronavirus in the future.
Growing Ottawa portfolio
Founded in 2001, Crown Realty now manages more than $3 billion worth of property, and the deal marks its second acquisition in the Ottawa area. Last summer, the firm bought the Carling Executive Park properties at 1525, 1545 and 1565 Carling Ave. from Vancouver-based QuadReal Property Group for $56.5 million.
Hanna said Ottawa is an attractive market for investors because of the “stability offered by the federal government,” the city’s thriving tech sector and its relative affordability.
Although measures to control COVID-19 have dealt a heavy blow to Canada’s economy, Hanna said Crown Realty is “known for the success we’ve had repositioning troubled assets,” adding that expertise will serve it well at a time when many commercial properties “will be in need of hands-on, thoughtful management” to retain existing tenants and find new ones.