of Capital Interest
Produced by Juteau Johnson Comba Inc.
Real Estate Advisors and Appraisers
2255 St. Laurent Boulevard, Suite 340
Ottawa, Ontario
K1G 4K3

Phone 613-738-2426 ex 104
Fax 613-738-0429

Editor John Comba
Christmas is behind us and the year is almost complete. We wish to thank all of our clients for their support this past year and wish them all the best for 2002.

This has been a very eventful year in the Ottawa real estate industry with the decline of the telecommunication industry and the resurgence of the federal government as the main story. Last December I noted that:

The past year for real estate in Ottawa has been an extraordinary one. Vacancy rates in all sectors are at lows last seen more than ten years ago and rental rates have increased at a very rapid pace. Developers have been unable to keep up with the demand (as have some appraisers). Ottawa is well positioned to enjoy good growth for the next few years.

Well that growth came to an abrupt halt in the spring of this year with the meltdown in the telecommunication industry. However, the federal government has taken advantage of this downturn and we expect the high tech industries to start growing in the second half of next year. There will probably be some names we don't recognize as well as some we do (JDS and NORTEL). It will be interesting to see how the year unfolds and we will try to keep you informed as events unfold.

John Seymour of Colliers International has produced a summary of the recent federal government leasing activity. To obtain a copy of the summary email John at John.Seymour@colliers.com.

Now onto a summary of the sales that occurred in November.

SALES

In last month's newsletter I noted that Bytown Lumber Inc. sold their store in Bells Corners at 175 Robertson Road to Robertson Road Inc. for $2,000,000. The registered document was only a caution and the property has not yet sold. In fact a second caution has since been registered on this property. This one was by Sanjoy Developments Ltd. with a stated consideration of $1,950,000. It would appear that there is still strong demand for well located real estate.

There was only one OFFICE building sale this past month. A four-storey medical office building at 2211 Riverside Drive was sold by 2211 Riverside Drive Ltd. to 1496133 Ontario Ltd. for $1,125,000 or $67 per square foot above grade. Bernard St. Onge of Royal LePage was the listing agent.

The RETAIL market was also fairly quiet in November. A one and two-storey retail/office building at 266 Beechwood Avenue was sold by Georgette and Marcello D' Alonzo to R.L. DeCelles and Associates Inc. for $590,000 or $121/sq.ft.

The other retail sale was of a one and two-storey retail building with a freestanding Burger King located at 5929 Jeanne D'Arc Boulevard in the Orleans community which was sold by Metropolitan Marine Way Investments Inc. to Jeanne D'Arc Ventures Inc. for $3,100,000 or $82/sq.ft.

The APARTMENT market was much busier this month with five sales. Clarica Trust Company sold under power of sale a 190 unit apartment building including an office unit to Bayswater Capital Corporation for $10,250,000 or $53,948/unit. The building is located at 52 Bayswater Avenue in the west end of Ottawa. The broker for the vendor was District Realty who also have their offices in this building.

A 31-unit building at 223 Somerset Street West was sold by H. Blackburn Compagnie Limitee to The Blackburn Building Inc. for $2,400,000 or $77,419 per unit.

Urbano and Domenica Donatucci sold an 8-unit apartment building at 1173 Rockingham Crescent to Pasquale and Louise Valente for $667,500 or $83,438/unit.

A 16-unit apartment building at 311-315 Blake Boulevard was sold by 1168792 Ontario Inc. to Raymond Frendo-Azopardi for $525,000 or $32,813/unit.

Ottawa Salus Corporation purchased an 11-unit building at 709 Churchill Avenue North from Birnic Enterprises Inc. for $535,000 or $48,636/unit.

The INDUSTRIAL market was also more active this month with three buildings having been sold. The first was a 12,000 square foot structure at 18 Bentley Avenue in the Merivale Industrial Area for $810,000 or $67/sq.ft. The vendor was Pierre Vachon and 827299 Ontario Inc. and the purchaser was 2006756 Ontario Inc. The property had been listed by Rob Quinn of Metro-Suburban.

The two other properties were sold as a package by Pensionfund Realty Ltd. to 1239366 Ontario Inc. They total 55,361 square feet and the total purchase price was $1,740,000 or $31/sq.ft. They are located at 1580-1590 Liverpool Court and 1315-1317 Michael Street in the east end of the city. The listing agent was Mario Staltari of jj Barnicke.

The market for vacant LAND was quiet with only one sale. It is a 5.44 acre site located in the north end of the City of Kanata on March Road and McKinley Drive. The vendor was the City of Ottawa and the purchaser was The Board of Governors of the Algonquin College of Applied Arts and Technology. The purchase price was $1,481,000 or $272,242/acre.

NEWS

The unemployment rate in Ottawa for November 2001 declined for the second time to 7.2% as compared to the average for the country at 7.5%. According to Statscan, Ottawa's high-tech workforce peaked in March at 82,000 and is now at 62,000. This is in contrast to the public administration sector which has increased from 103,000 in March to 109,000 in November.

With all the negative news surrounding the high-tech industry, it was interesting to read an article in the Ottawa Business Journal which indicated the total funding by venture capital firms in Ottawa based companies is expected to top $1 billion for 2001. This is just slightly less than the record set in 2000 and is partly due to spill over from the end of last year.

Homestead Land Holdings of Kingston and one of Ottawa's largest residential landlords, has started construction on an 120-unit residential apartment building in the former City of Kanata's City Center. This is the first of three identical towers and it is expected to be completed by next fall.

CMHC notes that construction of new homes in Ottawa slowed in November with only 352 new starts which is some 33.6% lower than the 530 that were started last November. For the first 11 months of the year Ottawa has seen 5,933 housing starts, which is 11% more than the 5,329 starts recorded in the first 11 months of last year.

The most recent report from the Ottawa-Carleton Real Estate Board indicates that 957 properties were sold in November, which is 12.2% higher than last November when 853 properties changed hands. The total number of sales year-to-date is 11,490 as compared to 12,146 for the same period last year. The average price for the year has remained virtually the same as last month at $175,726, 10.4% higher than last year.