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Real estate revival? Even as hybrid work takes hold, some firms look to expand office footprints

December 8, 2023
3:47 PM
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While holiday parties are in full swing, a couple of local tech firms hosted celebrations last week for a different reason – to show off their new offices. Cybersecurity provider Forescout and e-commerce optimization software company Trellis welcomed visitors to their freshly leased spaces in Kanata – both of which, coincidentally, are located in the same building at 515 Legget Dr., next to the Brookstreet Hotel. According to one prominent broker, they are among a growing number of Ottawa organizations that are looking to modestly expand their real estate footprints as more workers return to the office on a regular basis. Giorgio DiNardo, a vice-president of Avison Young’s office leasing team in the capital, toured Trellis’s founders through a range of office spaces from Westboro to Kanata. He says Trellis, which employs about 20 people in the Ottawa region, is a prime example of the type of tenants that are jumping back into the real estate market after spending the past few years renting offices or co-working cubicles with room for just a few employees, but now feel they need to spread their wings. “They were in a small space in Kanata for a while and they just started to outgrow it and had more of a need for meeting room space,” DiNardo told OBJ. Trellis, which helps merchants around the world generate more income from major e-commerce providers like Amazon and Walmart, was born in 2019. Since then, the startup has been in hyper-growth mode, with 2023 revenues expected to rise 120 per cent compared with last year. While the fledgling firm was previously content to rent space in a Kanata co-working facility, co-founder and CEO Fahim Sheikh said he and his team felt they needed a bigger office of their own where employees could congregate, swap ideas and learn from each other. “We’ve always believed in the office,” he said. “We’re a young startup, and it’s very hard to instil culture remotely. We are hybrid to a certain extent, but our guys want to come into the office.” Trellis is now subleasing about 5,000 square feet of space on the ninth floor at 515 Legget from Canada Life, which completely remodelled the office before COVID hit but ultimately decided not to occupy it. For the next three years, Trellis has full run of the place, which is fitted out with a kitchen, glass-partitioned meeting rooms and all-new furniture. “This place, it was just spectacular,” Sheikh said. “We just couldn’t say no.” DiNardo said Trellis is like many budget-minded tenants that are gravitating toward finished spaces that don’t require major upgrades. “It was move-in-ready for them and they didn’t want to go through a large buildout,” he explained. “Turnkey space with good natural light is at a premium. There’s no hiding it. We’re in a high-interest-rate environment and capital is at a premium.” Seven floors below Trellis, Forescout held the grand-opening ceremony for its new 7,000-square-foot R&D hub in Kanata last week. The California-based firm established a foothold in the Ottawa market last year when it acquired Cysiv, a cybersecurity company that was spun out of Trend Micro in 2018. Forescout now employs about 50 people in the National Capital Region. That number is expected to hit 60 over the next few months as customers clamour to shore up their defences against ever-more resourceful hackers, said Forescout’s Ottawa-based chief technology officer, Justin Foster. “The sophistication and creativity of the bad guys is just exploding every year,” he said. “It’s a cat-and-mouse game.” Until recently, the firm’s growing workforce was based at a nearby co-working facility. But Foster said the time had come to find a bigger office with more amenities and space for face-to-face interactions. Earlier this year, Forescout signed a long-term lease on the second floor at 515 Legget and renovated the space to make it suitable for collaborative sessions such as hackathons that are designed to bring employees together. And in keeping with the company’s habit of naming its meeting areas after recording artists, rooms in the Kanata office pay tribute to a trio of Canadian music icons: the Tragically Hip, Rush and Alanis Morissette. “(The co-working site) was a great facility, but there’s something to be said for having your own meeting rooms, your own space, your logo up on the wall, that kind of stuff,” Foster said. “We’re not going to force anybody back in. But our goal is to create a space where people want to go back in. It’s kind of nice to sit across from someone and not book a Zoom meeting just to ask a two-minute question to somebody.” DiNardo is currently showing vacant offices to another software company that now operates out of a co-working facility on Elgin Street. He anticipates it won’t be the last client looking to make a similar move. “They’re at a critical mass now,” he said of the software client. “They need their own space; they want to access meeting rooms more regularly. “They want it nicely built out and they want to move quickly on it. I think we’re going to continue to see that in 2024.”