Two of Canada’s leading real estate firms have boosted their local office portfolios with a pair of acquisitions worth a combined $87 million – prompting an Ottawa brokerage to predict that the new year will pick up right where a frothy 2021 left off.
In the latest in a string of transactions in the National Capital Region over the past few months, Montreal-based BTB Real Estate Investment Trust announced Monday it has purchased the office component of two properties at Lansdowne Park from the Minto Group for $38.1 million.
The class-A buildings facing Bank Street were constructed in 2015 as part of a redevelopment project that saw the construction of hundreds of thousands of square feet of new office and retail space at Lansdowne Park as well as the makeover of the 40-acre site’s stadium and arena.
Covering a total of about 116,000 leasable square feet, the space is spread across six storeys at 979 Bank St. and a smaller building to the south at 1031 Bank St. The retail portions of the properties were not part of the deal.
The space is 95 per cent leased with an average weighted term of more than five years, according to CBRE, which brokered the deal. Tenants include BMO Nesbitt Burns, executive search firm Boyden, the Canadian Internet Registration Authority and cybersecurity software company Field Effect.
Retailers a ‘big draw’
Nico Zentil, CBRE Ottawa’s vice-president of capital markets, said the properties’ proximity to retailers such as Whole Foods and the LCBO as well as a variety of bars, restaurants and amenities like GoodLife gym make the space a “big draw” for office tenants.
In addition, he noted, there’s the cache of having a CFL park right in your own backyard.
“You can watch a football game or a concert from your office, which is pretty cool,” Zentil said.
The Lansdowne properties are the latest addition to BTB’s growing Ottawa office and industrial holdings.
The REIT, which trades on the TSX and controls more than $1 billion worth of assets across the country, now owns half a dozen office buildings across the region as well as an industrial site on Hunt Club Road.
BTB’s acquisition comes on the heels of a local office buy from another Canadian real estate player.
Toronto-based Crown Realty Partners closed a deal last month to purchase two office towers at 3755 Riverside Dr. from IBM for $49 million.
The buildings – which have served as Big Blue’s local headquarters since the tech giant acquired Cognos in 2005 – cover a total of about 268,000 square feet. The deal calls for IBM to lease the 10-storey, 183,000-square-foot tower for 10 years and the adjacent six-storey, 85,500-square-foot building for two years.
With the acquisition of yet another prominent class-A office property, Crown is further staking its claim as a dominant force in Ottawa’s property management scene.
‘Here in a big way’
The firm made its biggest splash in late November when it partnered with Crestpoint Real Estate Investments to buy the Place de Ville office complex for $350 million – the second-largest commercial real estate deal in the city’s history.
Factoring in the Riverside Drive acquisition, Crown now manages nearly three million square feet of property in the Ottawa region. That puts it alongside heavyweights Colonnade BridgePort, Morguard, KRP Properties, the Regional Group and Apollo Property Management in the ranks of the capital’s leading landlords.
“They’re here in a big way,” said Zentil, whose firm brokered Crown’s deal with IBM as well as its purchase of Place de Ville.
Those transactions helped make 2021 a record year for CBRE’s Ottawa operations. Zentil said his office plans to start shopping several more office towers shortly and is working with a client to finalize what’s expected to be among the city’s largest-ever industrial acquisitions, a deal he expects will be sealed in the next few weeks.
“I think that overall, people feel pretty solid about the office sector,” he said. “What’s exciting is that 2022 is appearing to carry a lot of that momentum from 2021 without skipping a beat. I think we’re going to have a couple of nice deals in January that are going to set the tone for the year, which I think is encouraging.”