Downtown Ottawa’s commercial vacancy rate is set to climb in the coming quarters as construction of a new, partially leased office tower, is completed, according to a local brokerage firm.
Cushman & Wakefield Ottawa says roughly 45 per cent of the 350,000 square feet inside Morguard’s Performance Court building at 150 Elgin St. has yet to be leased. Unless that space is snapped up in the coming weeks, it will hit the market in the first quarter and push up the vacancy rate.
Furthermore, the space being vacated by 150 Elgin’s confirmed tenants – which includes KPMG and Canada Council for the Arts – is also due to become available and will likely cause vacancy rates to rise further.
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In April 2012, Morguard officials predicted the building would be fully leased before it opens.
Overall, the report predicts that 2013 will finish on a “soft note.” The vacancy rate could climb as high as 8.4 per cent, an increase over the 7.9 per cent recorded during the third quarter of 2013.
The brokerage firm forecast that the amount of space coming available for the rest of the year will be larger than the amount tenants are willing to lease, meaning the absorption rate will stay in negative territory.
There was a 60,000-square foot absorption rate for the quarter, helping to bring the yearly total to 150,000 square feet.