of Capital Interest – June 2007
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

June 2007

For those of us lucky enough to live in Ottawa and are music lovers, summer is the best time. We have the best Canada Day event, a wonderful jazz festival, a great chamber music festival and something that they call Bluesfest but is really a music festival. The last two nights, which were pre-openings, featured Van Morrison and Bob Dylan. Tonight is Gary US Bonds and George Thorogood. The balance of the festival is also great and I am really looking forward to seeing Randy Newman as well as the Steve Millar Band. I know I will also be seeing some of the many readers to the newsletter. See you there and have fun!!

There were a total of 20 sales reported in the month of April with a total value of $76,066,674. Retail building sales accounted for 24.1% of the total, industrial buildings 19.3%, office buildings 4.1%, apartment buildings 5.7%, and vacant land sales 46.8%.
Sales data has been provided by RealTrack, Inc. For more information visit http://www.realtrack.com or call 1-877-962-9033

SALES

There were two transactions in the RETAIL market with a total value of $18,350,000. The largest sale was the Van Leeuwen Centre, located at 420 Hazeldean Road, in the Kanata neighbourhood of Ottawa, which was sold by Van Leeuwen Centre Ltd. for $16,500,000 ($228/sf) to VanLee GP Ltd. The Van Leeuwen Centre is a single-storey retail plaza that is anchored by a Shoppers Drug Mart store.

There were three INDUSTRIAL building sales this month with a total value of $14,674,415. Colonnade Developments Inc. sold their new buildings located at 130 and 140 Iber Road, in the Goulbourn Industrial Park, in the west end of the City of Ottawa to 130/140 Iber Road Nominee Inc for $12,260,000 or $124/sf. This is a newly constructed two building development that is leased to two single tenants for 10 and 15 year terms. CB Richard Ellis was the brokers with respect to this transaction.

There were only two OFFICE building sales this month for a total $3,080,000. Moana Realty purchased a two storey office building located at 308 Terry Fox Drive from 969076 Ontario Ltd. in the Terry Fox Business Park, for $2,150,000 or $92/sf. Ian Shackell and Jim Shotton of CB Richard Ellis were the brokers involved in this transaction.

There were five transactions in the APARTMENT market totalling $4,319,900. The largest transaction was for two apartment buildings located at 139 and 141 Preston Street, in Little Italy. This property sold for $1,352,400 or $52,015 per unit for 26 units. The vendors were Leang and Boo Tang and the purchasers were two numbered companies.

There were nine vacant LAND transactions during the month of April for a total consideration of $35,642,359. Of the nine transactions, there were four residential, two commercial, one future growth, one rural and one institutional land sale. The most notable sale was for 200.62 acres of land located along the north side of Fernbank Road, to the west of Terry Fox Drive. The transaction involved three parcels of land, negotiated together as one transaction, that were purchased by a residential developer (Monarch Construction). The three parcels had a total area of 200.6 acres and sold for $24,000,000 or $119,628 per acre.

A smaller site across the street from this property, which is not in the urban area, was sold by Deborah and Rory Bradley to 1664531 Ontario Inc. (Walton International) for $3,197,359 or $32,618/acre.
If you have decided that you don’t want to live on Revelstoke but would prefer to move into Rockcliffe Park, it will cost you $2,600,000 for a lot on MacKay Lake. Richcraft Properties purchased the house located at 456 Landsdowne Road for this amount.

Tridan Developments Ltd. sold a 2.529 acre commercial site on Terry Fox Drive to Jenco Real Estate Ltd. for $1,800,000 or $711,744 per acre. This site is to be developed with a free standing retail store.
Lastly, Urbandale Corporation sold a 2.503 acres site on the south side of Campeau Drive to The Royalton Retirement Residences (Kanata) Inc. for $1,500,000 or $599,281/acre. This site is to be developed with a retirement home, with the first phase of construction to begin the summer of 2007 on 150 suites.


NEWS

Primaris REIT announced that it has agreed to purchase Place D’Orleans, a 733,000 square foot, two-storey shopping centre located in the Orleans suburb of Ottawa. Primaris will pay $186,000,000 for the centre and an additional $4,000,000 in transaction costs, for a total consideration of $190,000,000, to be financed by cash-on-hand and debt. The transaction is expected to close in either late June or early September, subject to the resolution of debt secured by the property. Place D’Orleans is currently owned by the Oxford Properties Group and the Sun Life Assurance Company of Canada, each with a 50% interest.

jj Barnicke has released their second quarter office market report indicating that the overall vacancy rate is now at 5.65% with absorption reported at -25 square feet for the first six months of the year. The central business core has a vacancy rate of only 3.7% with the Class “A” market at only 2.4%. The Nepean market has the highest overall rate at 10.8% with the Class “A” market at 14.1%. There are reported to be 3 buildings in the Nepean market that have over 20,000 square feet available for lease.
The local unemployment rate as reported by Statistics Canada for the month of April was 5.4% down from 5.5% in March. The slight decrease was due to an overall gain of 5,000 jobs between March and April. Overall employment has increased by 12,000 jobs since the beginning of the year.

According to CMHC’s news release, residential construction increased by 27% during April 2007, as total housing starts increased from 386 units in April 2006 to 490 units during April 2007. With the strong growth during April, year-to-date starts are even with the total over the same period in 2006.