Tenants trading up to smaller, more modern and well-equipped spaces are fuelling a widening gulf between the haves and have-nots in the National Capital Region’s office market, the new managing director of CBRE’s Ottawa office says.
Already a Subscriber? Log in
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.
Tenants trading up to smaller, more modern and well-equipped spaces are fuelling a widening gulf between the haves and have-nots in the National Capital Region’s office market, the new managing director of CBRE’s Ottawa office says.
Maxime Foucaud said Ottawa’s situation mirrors a growing national trend that’s seeing companies “right-size” into amenity-rich real estate in an effort to entice employees back to the office.
“Users are fairly similar market to market, and it’s not that different in Ottawa,” said Foucaud, who grew up in the nation’s capital and returned to his hometown last fall to head up CBRE’s local operations after spending nearly 15 years as a commercial broker in Montreal.
“We’ve noticed in the last few years coming out of the pandemic that the assets that were well-positioned, welcoming assets – class-A, fairly well-amenitized – were attracting more tenants as tenants were shifting their mindset of what they want in this post-pandemic era.”
Foucaud’s comments came a day after CBRE released its 2025 real estate market outlook. The report said office tenants are becoming “more refined” in choosing new space as leases that were signed before the pandemic are now expiring – a trend it dubs “a flight to experience.”
“A shift to hospitality-inspired amenities and experiences have led occupiers to seek amenitized buildings that either offer or augment what they can provide within their own footprint,” CBRE said, adding both “the building and surrounding neighborhood play a crucial role in creating an exceptional employee experience that remote work cannot replicate.”
Foucaud said more and more tenants are looking to reduce their current office footprints and relocate to more compact space with more efficient layouts, “beautiful furniture” and amenities such as gyms, daycare centres and coffee shops.
That’s created a “bifurcation” between older, less desirable buildings and newly renovated “trophy assets” such as Constitution Square, the Sun Life Centre and the World Exchange Plaza that have upped their games to attract new occupants, he explained.
“Sometimes it’s the ‘build it and they will come’ sort of thought,” he said.
Foucaud suggested that owners of lower-tier properties need to spruce up their assets and find ways to stand apart from the pack.
“Is the gap going to continue widening? It’s possible,” he said. “You need to continuously invest in your assets and make sure you’re keeping in mind what the user is going to want and need at the end of the day.
“If you wait for that to occur, you may be waiting too long. Different assets are competing for the time of some of these tenants when they’re viewing these properties. So if you’re positioning yourself well to capture (a tenant’s) mindset, what they’re looking for, you’ll be successful in the future.”
