Michael Pyman, Colliers’ Ottawa-based vice-president of national investment services, says there could be a significant uptick in local commercial transactions in 2025, especially if the Bank of Canada continues to reduce interest rates and it becomes cheaper for investors to borrow capital.
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.
Leading commercial real estate executives say the National Capital Region’s investment market is showing signs of a revival as interest rates fall.
Michael Pyman, Colliers’ Ottawa-based vice-president of national investment services, says there could be a significant uptick in local commercial transactions in 2025, especially if the Bank of Canada continues to reduce interest rates and it becomes cheaper for investors to borrow capital.
“We’re seeing the market come alive again, which is great,” Pyman told OBJ last week. “I think that these interest rate drops really reawakened the market on multiple levels. We’re seeing it now on the income side of it, but also on the development side, which has kind of been at a standstill waiting for interest rates to come down.”Â
Pyman’s remarks came two weeks after Canada’s central bank dropped its benchmark rate by 50 basis points to 3.75 per cent.Â
Economists expect further rate cuts in the coming months, which could fuel a new wave of interest in all types of commercial properties, Pyman said.
“I think that’s going to make its way into the market, and we’re going to definitely see a lot more trading volume next year,” he added. “I think that there are still some institutional vendors out there that have been waiting for the opportune time to go to market.”
Developers are also looking to capitalize on a market where cap rates for some assets are still “well off peak-market pricing,” Pyman explained.
Colliers, for example, just helped broker the sale of an office building on Argyle Avenue in Centretown that is currently occupied by defence and security firm ADGA Group.
Ottawa’s Gagnon family, which founded ADGA in 1967, sold the company to Commissionaires Ottawa Group three years ago. However, it held on to the firm’s 17,700-square-foot head office at 110 Argyle Ave., which it acquired in 2013 for $3.85 million.
The family put the 58-year-old building, which ADGA Group is vacating next month, on the market four months ago for $5.7 million. Ottawa-based Colonnade BridgePort, which is redeveloping the site next door at 100 Argyle Ave. into a multi-residential complex, ultimately acquired the building along with a triplex at nearby 455 Metcalfe St. that was also owned by the Gagnon family for $6.9 million.
“At the end of the day, (the owners) had multiple offers kind of come in at the same time,” Pyman said. “I think everybody that was looking at it was looking at it as a redevelopment property as opposed to maintaining the existing office building. The overwhelming interest was from the development community.” Â
