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
Fax 613-738-0429

A Word from the Editor John Comba

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.

We would like to thank all of our clients for their support and confidence in our abilities over the past year. We also wish them all the best for the upcoming year and hope that they can get a well deserved rest over the Christmas holidays with their families and loved ones.

One of our main objectives in the new year is to hire someone to train in the appraisal business. In the past decade there have been very few individuals entering our industry from university. We all know that the average age of a brick layer is probably over 60 but most people do not know that the average age of an appraiser is around 50 (our office is below this average with only one notable exception). We need to attract bright young people to our profession. Therefore, if any of our readers are interested in becoming an appraiser or know of someone who has good math skills, is able to write a report and can perform good research please forward them this newsletter and encourage them to send us their resume. All applications will of course be in confidence.

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

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SALES

A two and half storey heritage OFFICE building at 200 First Avenue in the Glebe was sold by 665064 Ontario Ltd. to Clico Investment Bank Ltd. for $1,375,000 or $105/sq.ft.

Southam Inc. sold the Ottawa Citizen building at 1101 Baxter Road to Ottawa Citizen Group ULC for $14,980,612. This was part of the sale of a number of newspaper operations across the country.

A 12 unit APARTMENT building at 324 Chapel Street in Sandy Hill was sold by Munir & Yasmin Sheikh, Samy Hahmoud and Maha Jabi to Beland Cohen & Leff Capital Assets Corp. for $925,000 or $77,083/unit.

Two INDUSTRIAL buildings at 2280-2300 Stevenage Drive were sold by Leroux Steel Inc. to 1436704 Ontario Inc. for $705,000 or $18/sq.ft. It appears that there are still opportunities available. The buildings sold vacant and are being completed renovated. They are being marketed at an asking rent of $6.95/sq.ft. The agent on this transaction was Geoff Godding of CB Richard Ellis.

An industrial/office building at 6 Corvus Court in Nepean was sold by Laniel Radiators (1998) Inc. to Langevin Learning Services Inc. for $1,210,000 or $39/sq.ft. The agent on this transaction was Facilities Commercial.

Sears Canada Inc. sold their RETAIL store at Carlingwood Mall to OPB Realty (Carlingwood) Inc for $3,000,000 or $13/sq.ft. of building area.

A GAS BAR with a donut shop located at 570 Terry Fox Drive in Kanata was sold by Lucky Investments Inc. to 3758541 Canada Inc. for $645,000. The market for vacant LAND continues to be very active.

Signature Center Ltd. purchased an 11.8 acre site in the Kanata Centrum neighbourhood from Devon Estates for $975,000 or $82,627/acre.

Sid Bradley Realty Ltd. and Bob Holdco Inc purchased a 0.6 acre site from 377888 Ontario Ltd. for $648,121 or $24.74/sq.ft. of site area. The site is located on the northwest corner of Hazeldean Road and Hartin Street in Stittsville.

The Ottawa Jewish Home for the Aged sold their property at 125 Wurtemburg Street to Claridge Homes Inc. for $1,300,000. Claridge is proposing a 48 unit condominium building on the site which is located on the Rideau River. J.A.

Tubman Funeral Services Inc. purchased a 80,054 square foot site at 3600 Riverside Drive from Fernlea Flowers Ltd. for $790,000 or $9.86/sq.ft. The property is located north of Hunt Club Road on the west side of Riverside Drive.

One of the last remaining old style movie houses has closed at 384-388 Somerset Street West and has been sold. It was purchased by the owner of the adjoining property who also owns the grocery store at the corner of Bank and Somerset Streets. The purchase price was $755,000 or $76/sq.ft. of site area.

A 1.03 acre site located at 125 Hickory Street in the west end of Ottawa was sold by Tire Stars Group Inc to 125 Hickory Street Ltd. for $1,000,000 or $22.29/sq.ft. This site last sold in 1998 for $400,000.

A 27.1 acre residential site on Perth Street in the Village of Richmond was sold by Adelchi Bortolussi and Renzo Fracasso to Roden Holdings Inc., in trust for $780,000 or $28,782/acre.

A 7.03 acre school site in the Longfields neighbourhood of south Nepean was sold by Richcraft Homes Inc. to The Ottawa-Carleton District School Board for $1,269,000 or $180,512/acre.

Land Ark Homes Vance Farm Inc. purchased a 40.1 acre site on Marchhurst Road in north Kanata from Bennie Vance and George Fleischmann for $1,326,875 or $33,054/acre.

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NEWS

Canderel's Northtech Campus continues to grow. Cisco's first phase, announced in February 2000, is currently nearing completion. Phase II, comprised of 105,000 square feet, is to be ready for a July 2001 occupancy with the larger 157,000 square feet Phase III slated to open December 2001.

Morguard announced that it has entered into an agreement with Sears Canada to purchase the remaining 50% interest in the St. Laurent Center, in the east end of Ottawa, for approximately $109 million. The transaction is scheduled to close in December 2000. In addition, Morguard will also purchase Sears' remaining 50% interest in the eight-acre land parcel adjacent to St. Laurent in early 2001.

Morguard is also constructing a 260,000 square foot industrial warehouse building on Bantree Road in the east end of Ottawa. Approximately 200,000 square feet has been pre-leased to the Boyd Group of Companies. Mario Staltari of jj Barnicke was the agent in this transaction.

According to CMHC there have been 4,799 residential construction starts in the first ten months of 2000. That is 32% above the entire amount of starts last year. Not surprising, Kanata is leading with 1,176 starts, the City of Ottawa is second with 1,048.

Oxford and Perimis Properties are planning on constructing two new industrial buildings. One is to be located on Maple Grove Road in the Terry Fox Business Park of Kanata. It will be a 100,000 sq. ft. industrial flex building geared toward technology tenants. This building is being marketed by Colliers.

The other will represent a 96,480 square foot expansion of a 230,000 square foot industrial building in Ottawa's east end at 2370 Walkley Road. The expansion is being marketed by CB Richard Ellis with a summer 2001 occupancy.

The local unemployment rate is down to 5.4% after a net gain of 4,800 new jobs in November. There has been an increase of some 20,000 new jobs in the past year in the Ottawa area. The major job gains in November were in retail and wholesale, educational services, manufacturing and health care. The positive employment numbers has resulted in the lowest vacancy rate for rental housing in the country.

CMHC's latest survey of the apartment market notes that the vacancy rate for Ottawa was at only 0.2%, the lowest in the country for the second consecutive year. This has resulted in the average rent for a two-bedroom apartment increasing by 12.6% over last year - the highest increase of any city in Canada.

The NCC announced that seven groups are in the running to develop the Daly Site at the corner of Sussex and Rideau Streets in downtown Ottawa. The groups include Canadian Gateway Development Corporation, Sarah Jennings and Ian John, Nesco Canada Inc. which is headed by Jose Perez, Claridge Homes, Groupe Lepine, Industrielle Alliance and International Concept Management.

The most recent venture capital funding was a $115 million investment in Innovance Networks, a six-month old optical startup. This investment pushes the total investment by venture capital firms in the Ottawa area to over $1 billion. No wonder there are so many nicer cars on the roads these days. With all of this venture capital flowing into Ottawa companies require space to lease and most of that has to be constructed and the developers are very busy.

For the first time in a decade the total value of building permits is over $1 billion. This is 41% higher than one year ago. Industry experts are projecting that this year will surpass the 1989 record of $1.163 billion. However, a number of permits have been issued early for projects that won't start until next year.

According to the Ottawa-Carleton Real Estate Board, there were 853 residential units sold in November bringing the total for the first eleven months of the year to 12,146 as compared to 11,329 for the same period last year. The average price so far this year is $169,606 which is 12% higher than last year.

CMHC is predicting that housing prices will rise 6% a year for the next three years.

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