Retail landlords and property managers in the nation’s capital saw market conditions deteriorate as the COVID-19 pandemic forced many tenants to shut their doors, putting downwards pressure on rent, according to a new report.
Commercial real estate services firm Jones Lang LaSalle said the availability rate climbed 40 basis points to 3.9 per cent at the end of the second quarter – slightly more than three months after restrictions on businesses aimed at controlling the spread of the novel coronavirus were imposed. Since then, there have been “visible signs of weakening” rental rates, JLL said.
Looking ahead, the firm said Ottawa’s retail real estate market has a good chance of a “fast recovery” as the city has relatively little new retail space under construction that’s poised for an imminent delivery.
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With organizations standardizing hybrid work, Real Strategy anticipates this reduction in tenant demand to continue.
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That means that the space currently being vacated should be quickly absorbed once the overall economy rebounds, JLL forecasts.
