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

It is hard to believe that November is just a few days away and the Toronto Real Estate Forum starts in less than a month. This is a great event that provides a nice conclusion towards the end of the year and makes us think about what we might expect in the year ahead. This year it is on from November 27th to November 29th and once again there is an impressive line up of guests and topics. For more information go to www.realestateforums.com. Both Ron and I will once again be attending and look forward to meeting with many of our newsletter readers and clients.

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

SALES

I would first like to correct a misstatement in last month's newsletter. The purchaser of the World Exchange Plaza, 3170497 Canada Inc., is not Bentall, but is bcIMC, one of Canada's largest institutional investors. The acquisition was directed on behalf of 3170497 Canada Inc. by Penreal Capital Management LP and the property is now leased and managed for the owner by Bentall Real Estate Services LP. Penreal provides ongoing asset management services to the owner regarding World Exchange. Both Penreal and Bentall are Bentall Capital affiliates. Now if only one of these many entities who were/are involved could tell us what they really paid for the project, it would make our job as appraisers much easier.

The OFFICE market was much quieter this month with only two sales. The first was 43 Auriga Drive, a two-storey 15,500 square foot office building that was sold by 2002712 Ontario Inc. to 2005022 Ontario Inc. for $1,500,000 or $97/sq.ft.

The second was the sale of 150-152 Richmond Road, a two-storey heritage office building in the west end of the City. It was sold by Les Vandor to 902567 Ontario Ltd. for $700,000 or $189/sq.ft.

The RETAIL market continued to be fairly active with four local sales and one in Cornwall. Riocan was the purchaser in two of the transactions and the vendor in one.

Riocan sold the Zellers Plaza at 1585-1595 Merivale Road to Admns. Meadowlands Investments Corporation for $16,750,000 or $101/sq.ft. The plaza is anchored by a Zellers store and has Staples, Home Sense, Red Lobster, Party City and Tim Horton’s/Wendy's as tenants.

A 50% interest in a plaza located at 3310-3320 McCarthy Road was sold by Sophisticated Investments Ltd. to Riocan Holdings Inc. for $3,572,511 or $107/sq.ft. when adjusted for a 100% interest.

Rosgate Holdings Ltd. sold a 25% interest in the Westgate Shopping Center at 1265-1321 Carling Avenue to Riocan Holdings Inc. for $6,742,162 or $143/sq.ft when adjusted for a 100% interest.

An 8,552 sq.ft. automotive retail building located at 1750 Bank Street was sold by Gormark Holdings Ltd. to Capital Crescent Industries & Trading Ltd. for $768,500 or $90/sq.ft. The property was listed by Mario Staltari of jj Barnicke and John Seymour and Nick Maiorino of Colliers acted for the purchaser.

Glengarry Square located at 1313-1317 Second Street East in Cornwall was sold by Crown Life and MCAP to Iberville Developments for $4,023,000 or $65/sq.ft. Nathan Smith and Eric Schulz of the Ottawa Royal LePage office had the property listed for the vendor.

The apartment market was very active this month with a number of sales.

Scotia Mortgage Corporation sold a 25-unit APARTMENT building at 3211 St. Joseph Boulevard in the Orleans community to Bathclair Properties Inc. for $1,480,000 or $59,200/unit.

A three-storey, 18-unit apartment building at 810 Connaught Avenue was sold by Ruth Bancroft, Benjamin Taub and Ralph Blasbalg to 1470196 Ontario Inc. for $800,000 or $44,444/unit.

A 107-unit townhouse development on Woodroofe Avenue and Majestic Drive in the west end of the City was sold to Triole Investments Ltd. by 1479151 Ontario Inc. for $6,700,000 or $62,617 per unit. Randy Stevenson of District Realty was the agent for the vendor.

District Realty (Neil and Jason Shinder) also sold two apartment buildings at 1917 and 1919 St. Laurent Boulevard. The building at 1917 St. Laurent was sold by Arnon Miller, Frank Loves and J.C. Building & Investment Corporation to 1917 St. Laurent Inc. for $4,300,000 or $58,108/unit. 1919 St. Laurent was sold by Arnon Miller, Jacob Ganon and Benzion & Joseph Gottlieb to 1919 St. Laurent Inc. for $2,700,000 or $41,538/unit.

Three, six unit buildings located at 1290-1294 Thames Street were sold by Maltaf Provenzano Properties Inc. to Temprano Enterprises Inc. for $1,325,000 or $73,611/unit.

There were no INDUSTRIAL building sales in September but the market for LAND continued to be strong.

A 50-acre sand and gravel pit in Goulbourn Township was sold by the Estate of Bertrand Cathcart to Thomas Cavanagh Construction Ltd. for $1,000,000 or $20,000/acre.

Loblaw Properties Ltd. continues to purchase sites in the Ottawa area. Their most recent purchase is an 11.12 acre site on Main Street in Stittsville in the west end of the city for $4,645,406 or $415,550/acre. The vendor was T.L. Properties IV Ltd.

Elsett Realty Company Limited sold a 7.64 acre site along Highway 17 in the east end of the City in the former Township of Cumberland to Hospital Food Services-Ontario Inc. for $550,000 or $72,000/acre.

In the west end of the city, Sandhill Road Inc. sold an 18.8 acre site to Tenth Line Development Inc. for $1,504,000 or $80,000/acre. This site is located north of the Kanata North Business Park.

Nortel Networks has finally closed on the purchase of another 53 acres at the Fallowfield Road interchange with Highway 416. The purchase price was $9,402,400 or $177,404/acre and the vendor was West Barrhaven Developments Inc. I guess Nortel has found another way to lose money.

Claridge Homes has also purchased another site. This site is located on Walkley Road, Jasper Avenue and Albion Road North in the south end of the City. It was purchased from the National Capital Commission for $1,578,600.

NEWS

The unemployment rate in Ottawa for September 2001 has been reported at 7.6% as compared to the national average of 7.0%. However, this is the seventh straight month the unemployment rate has risen in the Ottawa rea. Employment gains in 2000 hit a record 24,150, representing an exceptional 4.5% growth rate over 1999. There are now 22,300 fewer people employed in Ottawa than at the same time last year.

The Office Vacancy Surveys from Royal LePage and Colliers are now available. The Royal LePage survey is quoting an overall vacant rate of 7.2% including space for sub-let but only 2.4% for direct space. The Core is reported to have a vacancy level of only 1.8% including sub-let space. The highest vacancy rates are of course in the suburbs west market where the rate is quoted at 17.8% including the sub-let space. However, the vacancy rate for direct space is at only 3.2%.

Colliers is reporting an overall vacancy level of 9.4% including sublease space. The overall rate for the suburbs west market is reported at a much higher rate of 25% including sublease space. However, Colliers is "..hopeful that the largest shifts in vacancy are behind us and .... are projecting rental rates will remain in the $12.00 and $15.00 net range for much of the sublet market until inventories decrease to the sub 10% range."

The most recent report from the Ottawa-Carleton Real Estate Board indicates that 874 properties were sold in September bringing the total for the first nine months of the year to 9,580 as compared to 10,301 for the same period last year. The average price has remained virtually the same as last month at $175,594, 10.7% higher than last year.

CMHC's most recent Housing Now report for Ottawa notes that year-to-date starts up to August were at 4,521 units which is some 26% higher than the same period last year. However, new home sales continued to lag last year's volumes, registering a two-thirds decrease over last August. Nevertheless, new home prices continued to rise with an 18.7% increase over the same period last year. With all of this conflicting data I should maybe take to reading tea leaves.