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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
Our newsletter is now approaching its third anniversary with subscriptions of
almost 500 individuals. The amount of time needed to assemble the
newsletter has grown due to the increased number of sales occurring in Ottawa
that are over $500,000 in value. Given the time required to research all
of these sales, there have been delays in producing the newsletter in a timely
fashion (I know this might be news to many of you but it is true).
Nevertheless, we wish to continue to produce the newsletter and provide
insights into the Ottawa real estate market as it is a useful tool for our
clients and we do enjoy producing it (time permitting). Starting,
with this newsletter, we are going to limit our reporting to all sales over
$2,000,000 or at least one sale per asset class even if there are none over the
$2,000,000 value. We will also attempt to provide more analytical
comments on the sales volumes and the types of sales that have occurred.
Now onto a summary of some of the sales that occurred from June 26th
to August 1st. During this period there were some 35 sales
with a total value of more than $200,000,000. Retail sales
accounted for 5% of the total, office 77%, apartment buildings 9%, industrial
buildings 2%, vacant land 6% and one school which represented less than 1% of
the total value.
Sales data provided by RealTrack, Inc. For more information visit http://www.realtrack.com or call
1-877-962-9033
SALES
The retail market picked up in the month of July in comparison to the
previous few months, with five transactions totaling $10,695,000.
However, four of the five transactions were between $700,000 and $1,485,000
with the fifth sale at $6,400,000. The six sales ranged from $43 to $172
per square foot of building area. The only sale over $2,000,000 in value
involved the Terry Fox Plaza located at 500 Hazeldean Road in Kanata. The
site is improved with a single-storey retail plaza and a freestanding McDonald
s restaurant. Foxdean Properties Ltd. purchased the property from 500
Hazeldean Road Limited for $6,400,000 or $172 per square foot of building area.
There were seven office building sales totaling an amazing
$158,430,000. Three of the sales (all in the downtown core) accounted for
97% of the total dollar volume. The sales ranged from $64 to $236 per
square foot.
A six-storey building located at 434 Queen Street on the fringe of the Central
Business District sold in June for a total consideration of $3,950,000 or $64
per square foot building area. The property is improved with a six-storey
office building above four levels of parking. Sun Life Assurance Company
of Canada sold the property to 434 Queen Street Holdings Inc. The agent
for the vendor was Mario Staltari of jj Barnicke.
A 50% interest was sold in the Clarica Centre which is located at 99 Bank
Street & 50 O Connor Street for a consideration of $113,500,000 (50%
interest) or $236 per square foot. Clarica Life Insurance Company sold
the property to 1331430 Ontario Inc.
JER Ottawa, ULC sold the office building located at 340 Laurier Avenue West in
Ottawa s downtown core. The property is improved with a 13-storey
building that is almost fully leased to the Federal Government of Canada.
Ottawa - 340 Laurier West Inc. purchased the property for $36,600,000 or $123
per square foot building area. This property was marketed by CB Richard
Ellis and sold above list price.
These three sales clearly show that there is considerable interest by investors
in office product in Ottawa s CBD.
The apartment market continues to be very strong with a total of
fourteen sales registered from the latter part of June to the beginning of
August. The sales volume totaled $17,753,750. The sale price per
unit ranged from $45,000 to $146,250 for a small four unit in Centretown.
Some of the larger sales included a fifty-unit apartment complex located at
250-254 Cooper Street which sold for a total consideration of $3,252,000 or
$65,040 per unit. The vendor was 1332450 Ontario Inc. and the purchaser
was 2012625 Ontario Inc.
Another apartment complex located at 45 & 47-49 Somerset Street West sold
for $2,425,000 or $69,285 per unit. Evendrew Developments Ltd. purchased
the property from 1292480 Ontario Limited.
A 48-unit townhouse complex located at 1991-1995 St. Laurent Boulevard in
Ottawa s Hawthorne Meadows area was sold for $2,412,000 or $50,250 per unit by
Rao and Sudha Dukkipati to HK Properties Inc.
Urbandale Corporation sold a townhouse and apartment complex located on
Heatherington Road and Fairlea Crescent in the Heron Gate neighbourhood in the
City of Ottawa. Ottawa Fairlea Village Inc. purchased the 245-unit
property for $22,820,912 or $93,146 per unit. The units are reported to
have been constructed in the early 1970 s. The unit mix is broken down
into 42 two-bedroom, 152 three-bedroom and 51 four-bedroom units.
Slater Financial Inc. sold the 43-unit apartment complex at 131 Parkdale Avenue
to 1437158 Ontario Inc. The six-storey building sold for a total
consideration of $2,445,000 or $56,860 per unit.
The industrial market continues to be quiet with only two reported
transactions totaling $4,467,440. Both of the transactions were part of
larger portfolios. The price per square foot ranged form $59 to $65 per
square foot. One of the properties was located at 180-200 Terrence
Matthews Crescent in the Kanata South Business Park. Sreit (Quest Kanata)
Ltd. purchased the industrial building from 1255037 Ontario Inc. for a total
consideration of $2,767,440 or $65 per square foot.
The Ottawa-Carleton District School Board sold the Overbrook elementary school
located at 149 King George Street to 1270449 Ontario Inc. for $840,000.
Campanale Homes is to redevelop the site with 21 loft apartment units in the
building and 7 new townhouse units around the perimeter.
There were six vacant land transactions during the month of July
totaling some $12,606,400. Over half of this total sales volume was
the sale of the Canadian Tire at 178 Kent Street which was sold by Canadian
Tire Corporation Limited to Minto (Kent St.) Inc., the adjoining property
owner. The total consideration was $6,500,000 or $162 per square foot of
site area. This property adjoins the Minto Place complex and was
purchased for the eventual expansion of the development.
A 6.2 acre industrial site located on the northwest corner of Blackwell Street
and Leeds Avenue in the east end of the City was sold by Cenlon Sales Limited
for $769,925 or $124,181 per acre. The purchaser was 1275 Leeds Avenue
Property Inc./Propriete 1275 Avenue Leeds Inc. also known as Canderel. A
new 109,000 square foot industrial building is now under construction on the
site which will be ready for occupancy by December.
NEWS
CB Richard Ellis has just released their third quarter office and industrial
market surveys. The overall vacancy rate for all office space in the
Ottawa market is reported at 7.8% including space for sublet. The survey
also notes that the vacancy rate including sub-let in the west is at 21.3% and
only 2.6% in the downtown core.
The industrial survey notes that the availability rate increased 10 basis
points to 5.1% over the previous quarter. Net rental rates are quoted in
the range of $6.00 to $6.50 per square foot with new construction closer to
$8.50 per square foot.
Ottawa's unemployment rate edged down slightly in August to 6.7%.
Ottawa-Gatineau continued to gain jobs in August, with some 5,800 new job
seekers entering the market thereby nearly offsetting the impact of those who
found work. According to Statistics Canada, job creation has almost
exclusively government driven as the federal public service continues to
expand. There has been increase of approximately 20,000 jobs in the
public sector in the past year. Most of the job losses have been in the
high-tech sector with the overall workforce dropping from 49,000 to 47,000, and
no real signs of any turnaround in this sector. Despite the high-tech
meltdown over the past approximately 20 months, as of July 2002, there were
reported to be 575,000 people working full or part-time in the region, just
2,200 fewer than a year earlier.
The most recent report from the Ottawa-Carleton Real Estate Board indicates
that August had 1,059 transactions, which was some 5.7% less than the activity
in August 2001. For the first eight months of the year there have been a
total of 9,561 transactions, which is 9.8% more than for the same period last
year. The average price of a resale home was $200,491 which is up some
14.2% from the same period last year.
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