A blossoming Ottawa-based property management firm has chosen one of Canada’s fastest-growing cities for its first acquisition outside the National Capital Region.
Jennings Real Estate – which made headlines last summer when it bought the 12-storey Gillin Building at 141 Laurier Ave. W. – closed the purchase of a 12,000-square-foot industrial complex in the Halifax suburb of Dartmouth last month.
Jennings principal Ken Jennings wouldn’t divulge how much his company paid for the two-acre site, calling the deal a “mid-sized” acquisition for the firm.
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He said he and his brother Christian, who own the four-year-old company, have been scouting the Halifax region for properties “for a few years,” attracted by the Nova Scotia capital’s healthy growth trajectory as well as its strong government sector that acts as a “stabilizing influence” on the local economy.
“This particular property became available, and it just kind of checked all the boxes,” Jennings said, adding the deal gives his firm a foothold in Atlantic Canada’s largest city and provides a “springboard to look for other opportunities in the area.”
According to the most recent census, Halifax was home to Canada’s fastest-growing downtown between 2016 and 2021, when the population of the city’s core surged more than 26 per cent. The population of the Halifax metropolitan area, which includes Dartmouth, rose by 9.1 per cent in the same period, a rate eclipsed only by Kelowna, B.C., and Jennings’ home base of Ottawa.
“We like the city. There are a lot of similarities to Ottawa.”
Meanwhile, the availability rate of industrial properties in the Halifax region dipped to a record low of 1.9 per cent in the first quarter of 2022, according to CBRE. Average asking net rents rose 3.5 per cent year-over-year, a rate not seen since before the pandemic, as demand for industrial space in the region continued to outpace supply.
“It’s a really growing city, (with) lots of development downtown and in the periphery as well,” Jennings said. “We like the city. There are a lot of similarities to Ottawa.”
The firm has also secured a long-term tenant, industrial products manufacturer IPEX Group, to occupy the entire building.
Jennings said signing IPEX, which will also handle some of the property management duties, provides the firm with a stable flow of rental income as it looks to make its mark in the Halifax region.
“We’re really excited about the property and the tenant,” he added.
The firm is also adding to its holdings in its hometown. Jennings closed a deal this week to purchase an industrial property at 2396 St. Joseph Blvd. in Orléans that’s currently home to a Giant Tiger store.
As for the company’s marquee downtown property, Jennings said renovations at the Gillin Building are proceeding smoothly. He said the makeover of the class-A office tower’s lobby is on pace to be finished by the end of the month and modernizations of common areas on other floors are continuing.
“The work’s gone according to plan even with all the fits and starts with the protests downtown and COVID supply chain issues,” Jennings said. “We’ve been pretty on track and we couldn’t be happier with the reno.”
Factoring in the Dartmouth and Orléans acquisitions, the firm now has 13 buildings totalling more than 450,000 square feet in its management and ownership portfolio, including several industrial properties in Nepean and Kanata and office buildings on Hunt Club and Walkley roads.
Jennings said more acquisitions of Ottawa properties are in the works, with another deal or two expected to close later this quarter. He said the firm is “bullish” on the capital’s office and industrial sectors, noting vacancy rates have recently been trending downward in both segments.
“Things are getting back to some sense of normality,” he said. “We’re generally optimistic about the Ottawa market. If we think we can add value to the building … we’re definitely open to looking at all sectors of the market.”
Still, with the Bank of Canada raising its benchmark interest rate by half a percentage point to one per cent last month in a bid to rein in rising inflation and signalling that it could hike the rate by a similar amount in June, Jennings said he needs to be a “little bit cautious” when it comes to predicting where the market will go.
“It’s tougher to make projections,” he said. “Once (rates) stabilize one way or the other, I think it will be a benefit to everyone.”