Huntington Properties purchased the three-storey building at 135 Rideau St. from LaSalle Investment Management last week for $8.5 million.
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An Ottawa real estate firm that just acquired a prominent commercial building across from the Rideau Centre says it is exploring “alternative uses” for some of the space that could include “activity-based” businesses similar to escape rooms.
Huntington Properties purchased the three-storey building at 135 Rideau St. from LaSalle Investment Management last week for $8.5 million.
Tenants in the 52,267-square-foot property, which opened in 2011, include clothing retailer Urban Outfitters as well as a spa, hair salon, vape shop and Chinese restaurant. Executive search firm Keynote Search rents most of the third-floor office space.
While the building was previously fully occupied, several tenants have left over the past 18 months, and the property currently has a vacancy rate of about 25 per cent. About 6,300 square feet of retail space is now available on the first floor, while the third floor has about 8,500 square feet of vacant office space.
It’s the first major acquisition in several years for Huntington, which purchased its first building in 1996 in Kanata and now owns and manages more than 30 properties totalling 1.3 million square feet across the National Capital Region.
Partner Craig Whitten said he sees the Rideau Street deal as a “great opportunity” to plant his firm’s flag on the edge of the ByWard Market.
The neighbourhood has fallen on hard times recently as businesses complain of rising crime and homelessness issues. But Whitten said there are a “lot of concerted efforts” to breathe new life into the area and re-establish the Market as a go-to destination for shoppers and tourists.
“I think there’s a recognition by the community at large that it’s an important aspect of our city, and I would suggest that tourism is certainly attracted to the ByWard Market,” he added. “It will rebound from where it is today.”
While the building’s vacancy rate has ticked up in recent months, Whitten said the firm is eager to revamp the property with offerings that extend beyond traditional retail uses.
Options could include “experiential” businesses along the lines of Escape Manor, an Ottawa-based company that operates an escape room in one of Huntington’s other properties on Elgin Street, he explained.
“We certainly feel like we can make a dent in that (vacancy rate),” Whitten said. “We think we can add value to the leasing process and fill up the building in the next little while.”
The acquisition is the latest in a series of deals business leaders hope will revitalize a downtown core that was hit hard by the pandemic.
Earlier this year, Live Nation Canada announced it has signed a lease with the National Capital Commission to operate a live music and entertainment venue at the former Chapters building on the corner of Rideau Street and Sussex Drive.
Just down the street, an Asian restaurant is slated to take over the former McDonald’s at 99 Rideau St. after the new operators signed a 10-year agreement to lease the property in January.
Graeme Webster, a principal at Avison Young’s capital markets group, said the new acquisition is “a great opportunity for (Huntington) to really shine” as a landlord, adding he believes the building could become a “memorable property” with the right mix of tenants.
“I think this is the right location for a unique user,” said Webster, who helped broker the deal on behalf of the buyer.
He said that while deals are taking longer to close than in the past due to general uncertainty about the economy, new listings are picking up and there is “a lot of optimism” about the future of the Ottawa real estate industry.
“All the ingredients are here for the (office) market to show some strength in 2025, and I think we’re seeing the early signs of that,” Webster said.
