With its second downtown office conversion project in the works, Ottawa’s InterRent Real Estate Investment Trust says its first office tower-turned-apartment complex is moving closer to full occupancy.
InterRent said Wednesday 84 per cent of the suites in its 158-unit Slayte rental project on Albert Street were leased as of the end of October. That’s up from less than 50 per cent at the beginning of May, when interior construction of the building was still being completed.
The company now says the project is virtually finished, with amenities such as its rooftop lounge area accessible to residents. InterRent says leasing activity at The Slayte has been “robust despite ongoing construction in the vicinity of the building.”
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The 11-storey rental complex at 473 Albert St., which was built by InterRent’s sister company CLV Group, was a trial run of sorts for the Ottawa firms.
InterRent is managing the property, which it acquired in 2019 for $21.3 million. InterRent and CLV see The Slayte as a potential bellwether for a future wave of conversions amid rising downtown office vacancy rates and an ongoing apartment crunch that’s driven rental rates to record highs in Ottawa.
The companies are now launching their second conversion project in the core just a few blocks south of The Slayte in the recently vacated Narono Building at 360 Laurier Ave. W.
CLV Group and two partners purchased the 11-storey, 107,000-square-foot property earlier this year from True North Commercial REIT for $17.5 million. The company plans to convert it into a 139-unit rental apartment complex that will be managed by InterRent.
On Wednesday, InterRent said the Laurier Avenue project, which will also include about 1,700 square feet of retail space, is currently moving through the site plan control process at city hall.
“Drawing on valuable experience from the Slayte, the REIT, along with its trusted partners, are well-positioned to drive significant progress with this new development project,” the company said in a news release announcing its third-quarter financial results.
InterRent, which owns nearly 13,000 rental suites, said its funds from operations rose 4.9 per cent year-over-year to $21.3 million in the quarter ending Sept. 30.
The firm posted a net loss of $54.6 million compared with net income of $32.7 million in the same quarter a year earlier. InterRent attributed the loss to an $82.9-million difference in fair value adjustments of its investment properties, saying the adjustments reflect the continued expansion of capitalization rates during the quarter.
The average rent per suite rose nearly eight per cent to $1,576 compared with the previous year. The REIT’s overall occupancy rate fell to 95.2 per cent in the third quarter, down from 95.6 per cent a year earlier.
