Regional Group has acquired Corel’s former headquarters on Carling Avenue, adding one of the city’s most recognizable office complexes to its growing portfolio of suburban commercial properties.
The Ottawa-based real estate firm purchased the 183,000-square-foot, class-A office building known for its distinctive gold tint from Manulife Investment Management. Terms of the deal, which closed on Thursday, were not disclosed.
“For us, it’s very much in stream with the office assets we buy,” Regional Group’s senior director of acquisitions, Sachin Anand, told OBJ on Friday afternoon. “We are believers in office (space) long-term; we are believers in high-quality space and anything along transit nodes. The visibility of that building, the iconic nature of it, is a sweetener, I think.”
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Officially known as the Churchill Office Park, the eight-storey building just north of the Queensway at 1600 Carling Ave. is best known for being the home of Corel during the graphics software pioneer’s heyday in the 1990s.
Corel has long since vacated the complex, which is now 81 per cent occupied and is home to a variety of tenants that include professional services firms such as BMO Nesbitt Burns and MNP.
Anand said Regional Group wasn’t deterred by the building’s 19 per cent vacancy rate, touting its proximity to public transit and the city’s main east-west highway as well as amenities such as an electric vehicle charging station and car wash.
Its 35,000 square feet of empty space “is actually not a negative for us,” he explained, noting the building formerly managed by JLL managed to attract tenants during the pandemic even as many other Ottawa office towers hollowed out.
“We really like the resiliency of that asset, how it proved itself during COVID,” Anand said. “It’s diversified in terms of its (roster) of high-quality tenants.”
Anand said the 40-year-old building is in “good shape” overall. He said Regional Group, which has taken over management of the complex, doesn’t have any immediate plans to make any significant upgrades to the property.
Besides the office complex itself, Regional Group also acquired surrounding property that is zoned for residential use.
Conversion potential?
When the 4.3-acre site was put on the market last fall, broker Nico Zentil told OBJ it “has some optionality instead of just being an office building in perpetuity,” including the potential for multi-residential development.
“That theme is resonating out there with investors,” Zentil, a vice-president at CBRE, said. “It’s like, ‘If I buy this building, is there an opportunity to take it from its current form into something else if I had to and if I wanted to in the future?’”
On Friday, Anand said the building “will continue to operate as an office asset” for the foreseeable future.
“Way down the line, if that’s something we can consider, it has that optionality for (residential) conversion,” he added. “That’s not the main part of our (investment) thesis, but it’s nice to have something like that as a backup plan.”
It’s Regional Group’s second acquisition of a major Ottawa office complex in the last 18 months.
In November 2022, the company purchased Qualicum Centre, a three-building, 224,000-square-foot, class-A office campus on Baseline Road that was also previously owned by Manulife Investment Management.
Regional Group now owns and manages more than three million square feet of commercial space in the National Capital Region. In addition to its two most recent acquisitions, its holdings include Kanata’s Hazeldean Mall as well as office buildings at 1550 Carling Ave., 130 Colonnade Rd. and 495 Richmond Rd.
While Ottawa’s office vacancy rate remains near a record high, Anand said the firm is “bullish” on the long-term future of the local office market and is “still looking to acquire across major asset classes,” including office, industrial and retail space.
“In this current market, the cap rates that you can acquire office (space) are opportunistic, given it’s fallen a little bit out of fashion with traditional investors.”
