Strong rental growth and low vacancy rates in downtown Ottawa’s commercial real estate market is proving that companies, both large and small, are coveting the city centre.
“There’s no question that the downtown market has been tightening for the last three to four years,” says Alan Doak, a partner at Proveras Commercial Realty. “Where we’ve seen tightening is in the well-managed, well-maintained and recently renovated properties.”
The current situation follows soaring vacancy rates that were directly related to the 2008 financial crisis and subsequent government cutbacks.
“It created vacancy in buildings that have never experienced vacancy before,” explains Doak. “That resulted in an opportunity to create a more modern environment that would be appealing to all sorts of businesses.”
Some property owners and managers responded with a creative approach, renovating buildings to attract innovative organizations such as leading nonprofits and industry associations.
Heading into 2020, office workers from all sectors are coming to expect modern workspaces that are comfortable, offer opportunities to collaborate with colleagues and are within walking distance to amenities, says Doak.
A recent report by PwC reinforces his observations.
“Beyond quality services and amenities, more tenants (and their employees) are looking for features like proximity to nice restaurants and less tangible elements, such as a communal vibe,” the professional services firm says.
1 Nicholas St.
It’s exactly those kinds of amenities that make downtown commercial properties such as 1 Nicholas St. – located at Rideau Street, across the street from a light-rail station and on the edge of the ByWard Market – so attractive to tenants, says Michael Morin, a commercial property manager at District Realty.
“People want the flexibility of being able to walk across the street on their lunch break and enjoy a meal at a restaurant with colleagues or get in a workout,” said Morin. “It’s all about being resourceful with your time, and a downtown location provides you with options you wouldn’t get elsewhere.”
Tenants of 1 Nicholas have cited innumerable amenities that are directly related to the building’s location. The building itself is home to a Clocktower Brew Pub, dentist, convenience store and hairdresser. And, in the immediate vicinity, tenants are close to high-end stores at the Rideau Centre, diverse meal options at nearby restaurants and Farm Boy, access to top-rated hotels and conference spaces at the Shaw Centre.
Studies continually conclude that employees who are more satisfied with their physical environment are more likely to produce better work outcomes, contributing to an overall synergy within the building, says Morin.
Transportation is also a key factor. With the arrival of light rail and the promise of increased accessibility in the core, demand for centrally located office space is expected to rise as tenants place more importance on proximity to rapid transit.
With work on the second phase of LRT underway and light-rail expansions to Orléans, Riverside South and Bayshore – among other communities – just a few years away, Doak says there’s little doubt that buildings in close proximity to rapid transit will benefit.
“That would be consistent with what we’ve seen in the history of urban development anywhere in North America or Europe,” he says.
Indeed, global real estate services firm JLL reports that “office tenants, retailers, and households are re-orienting their location decisions to take advantage of the system.”
Looking ahead, JLL predicts Ottawa’s office market will see strong rental growth and low vacancy in 2020.
For companies looking to capitalize on the desirability of a downtown Ottawa location, locking in a new lease should be a priority in 2020.
Space is currently available for lease inside 1 Nicholas St. Companies and organizations interested in office space in the heart of downtown Ottawa can explore their options at http://bit.ly/District-1-Nicholas.
