InterRent REIT says occupancy at the Slayte, the 11-storey rental complex at 473 Albert St. it is developing in conjunction with sister company CLV Group, is “quickly approaching” the 50 per cent mark “despite lease-up having mainly occurred during the weaker winter rental months.”
Get Instant Access to This Article
Become an Ottawa Business Journal Insider and get immediate access to all of our Insider-only content and much more.
InterRent REIT says it’s seeing robust demand for rental suites in one of the capital’s most prominent office-to-residential conversion projects, with nearly half of the former government office building’s 158 units now occupied.
Ottawa’s largest real estate investment trust says occupancy at the Slayte, the 11-storey rental complex at 473 Albert St. it is developing in conjunction with sister company CLV Group, is “quickly approaching” the 50 per cent mark “despite lease-up having mainly occurred during the weaker winter rental months.”
InterRent is managing the property, which it acquired in 2019 for $21.3 million. With help from local partners such as Linebox Studio and Bassi Construction, InterRent and CLV have spent more than two years converting the half-century-old building into a high-end rental complex with a rooftop terrace and other amenities such as a fitness centre, theatre and games room.
In a news release Tuesday announcing its first-quarter financial results, InterRent said leasing activity at the soon-to-be-completed project is showing “strong momentum,” adding demand for suites at the Slayte “is anticipated to continue and strengthen during the summer months.”
Turning antiquated commercial space into residential units is a hot topic in Ottawa as the city’s office vacancy rate hits record highs amid a widespread shift to remote work during the pandemic.
Several prominent real estate companies, including InterRent and District Realty, have launched conversion projects in the past several years.
Meanwhile, other firms are seriously considering gutting outdated office buildings in their portfolios and reimagining them as multi-residential developments – including Montreal-based Groupe Mach, which says such a process is “an appealing option” for a vacant, 14-storey former government office complex at 110 O’Connor St. it purchased from Cominar REIT in 2021 for $40 million.
Costly endeavour
InterRent and CLV wouldn’t reveal exactly how much they spent on transforming the old office cubicles at 473 Albert into apartments, but CLV president Oz Drewniak told OBJ a few months ago that conversions are “not easy” and often end up being nearly as costly as constructing a new development from scratch.
“The amount of due diligence that’s required to do a building like this is tremendous,” he said in an interview. “If someone is thinking that they can take one of these office conversions and build new residential (units) and save 25 per cent, they’re dreaming.”
Still, Drewniak said brisk demand for units at the Slayte already has InterRent and CLV “actively looking” for other Ottawa office buildings that could be repurposed as multi-residential developments.
“We hope to do more of these,” he said. “It has been a very difficult process, but we’ve learned a ton and want to utilize what we’ve learned and do it better next time.”
With the federal government expected to put millions of square feet of aging downtown real estate on the market in the next few years, Drewniak expects the growing “wave” of conversions to continue for the foreseeable future.
“It is a real problem that we’ve got to deal with,” he said of the increasing amount of empty office space in the capital’s downtown core. “If we all band together to do something about this, then we can fix it.”
