With Kanata office vacancy rates approaching a 10-year low, one of the west end’s largest landlords says it’s getting close to kicking off construction of a new 150,000-square-foot building.
“There’s a lot of interest and demand out there” among tenants, KRP Properties leasing director Linda Sprung said on the Ottawa Real Estate Show. “We’re hoping we can break ground sooner than later.”
KRP Properties currently has some 3.2 million square feet of space across more than 35 buildings on either side of March Road in Kanata as well on Capella Court in the city’s south end.
Its next building would likely be on Terry Fox Drive, where the firm owns development land adjacent to the Stealth Building, home to Huawei, March Networks and other tenants.
Shawn Hamilton, managing director of CBRE, a real estate services firm and show sponsor, said he expects to see construction of a new Kanata office property start within the next 18 months and be followed by other developers launching additional projects.
“We’ve got the largest group of 20,000-square-foot-and-up tenants (in Kanata),” he said. “It doesn’t take many of them to kick off a building.”
The Kanata office market has undergone a significant shift in a relatively short time.
Less than five years ago, landlords were grappling with a vacancy rate of 16 per cent. Today, buoyed by a resurgent tech sector, it’s in single digits for the first time since before the 2008 financial crisis.
Sprung, who is marking her 20th year at KRP Properties, said the market is underpinned by much stronger fundamentals than in other boom periods.
She recalled sitting across a table from a venture capital group in the 1990s that was interested in leasing an entire building. When asked for some form of security, they cut a $1 million cheque on the spot, but ultimately never occupied a third of the space.
Today’s tenants, she said, are much more conscious of their budgets.
“That’s why you sometimes have high-tech companies that refuse to lock in for longer than a three-year period, because it’s just too volatile,” she said.