The federal government is stepping up its search for more space to accommodate workers who are back in the office a minimum of four days a week, brokers say. Victoria Scott, an associate vice-president at CBRE’s Ottawa office who represents tenants, says it appears the feds are gearing up to lease additional real estate after […]
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The federal government is stepping up its search for more space to accommodate workers who are back in the office a minimum of four days a week, brokers say.
Victoria Scott, an associate vice-president at CBRE’s Ottawa office who represents tenants, says it appears the feds are gearing up to lease additional real estate after issuing an expression of interest for office space earlier this year.
“I hear … from landlords and other agents in the market that they have started to tour spaces,” Scott told OBJ this week. “They’re looking at larger blocks, and we’re anticipating a tender will come to market in the near- to mid-term. They’ve got some checked boxes they need to meet, so they’re looking at the market. I think it’s creating some confidence and some positivity in the market.”
Public Services and Procurement Canada, which manages much of the federal government’s real estate portfolio, issued a call in June asking for information on contiguous office space of at least 1,000 square metres (10,700 square feet) that was available for lease in the National Capital Region.
The department said it is seeking to lease or buy space that is “fully fitted up and furnished with commercial Wi-Fi,” adding lease start dates and durations as well as amenity requirements such as parking and storage would vary depending on its needs.
PSPC said the proposed space “must be located within the cities of Ottawa and/or Gatineau” and must consist of “whole floors or whole floors and no more than one partial floor.”
Ian Woodhead, a commercial broker at Colliers’ Ottawa office, said the feds are “definitely out in force” touring buildings with “large, contiguous blocks” of vacant space as they try to find room for all the workers who were required to be back in the office at least four days a week as of July.
Woodhead said that while the feds seem more focused on renewing leases in buildings they already occupy, he expects PSPC to issue a request for proposals for new space later this year or early in 2027.
“I think that’s probably the big story of the next 12, 24 months, is just to see what they’re going to do,” he added. “If we start seeing them leasing new space, it will probably predominantly affect downtown in the class-A (buildings) there.”
With large chunks of top-tier real estate in short supply in the core, Scott said the feds are scoping out potential locations across the city.
“There's a squeeze on space — not just any space, but the right kind of space,” she said. “They have the same challenges that the private sector does in the sense that they need to create good-quality space for a positive environment for their staff and they have a number of different requirements they need to meet, whether it’s sustainability, accessibility, net-zero (carbon footprint). They’re not limited to just downtown, class-A trophy assets.”
In June, PSPC said its Expression of Interest would remain posted until June 30, 2027.
“This is not a tender process, nor a request for proposal, but only an inquiry as to the availability of space to lease,” the document added, saying PSPC “will not necessarily invite offers, or lease any space, and may not post any future ads related to this request.”
Scott said it’s tough to predict exactly when the feds will launch the tendering process.
“I think it would be likely that they want to start to home in on their options sooner rather than later,” she added.
The uptick in interest from the feds comes as demand for office space from other sectors such as defence and technology companies is rising, major brokerage firms say.
