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Editor John Comba

We continue to report to you from the home of the # 1 hockey team in the NHL and the last remaining Canadian team in the playoffs. We not only have a better quality of life than Toronto but also a better hockey team.

GO SENS GO!!!!!!

In the last newsletter, we incorrectly stated that a 7.1 acre site in the Cardinal Creek Business Park in Orleans was sold by 790546 Ontario Ltd. to Trim and Queen Inc. for $1,252,800 or $176,451 per acre. The site was actually 10.44 acres in size which works out to $120,000 per acre.

This newsletter is covering all sales in the month of February. Sales volume and values have both increased from the previous month. There were 25 reported sales with a total value of $46,374,797. Retail buildings accounted for 13% of the total sales, office buildings 11.3%, apartment buildings 11.3%, industrial buildings 5.4% and vacant land 59%.

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 five RETAIL building sales this month totaling $6,033,868. Gormark Holdings Limited sold The Mayfair Plaza located at 1370 Clyde Avenue to Ferano Holdings Limited for $3,150,000 or $133/sq.ft. It comprises a one and two-storey shopping plaza with ground floor retail and second floor office space.

There were two OFFICE building sales this month totaling over $5,233,000. One interesting transaction involved 161 & 163 Bank Street and 170 Slater Street. Arnon Corporation and Zeev Vered sold their 33.3% interest to The Great – West Life Assurance Company for $3,333,333. 161 & 163 Bank Street comprises an office building with ground floor retail and 170 Slater Street comprises a parking garage. The two parcels were purchased along with a 47,585 square foot vacant land parcel located at 190 Slater Street. The City of Ottawa sold the vacant land for $8,394,300 or $176 per square foot of site area. Great – West Life Assurance Company purchased the adjoining parcel for the proposed development of a 338,000 square foot office building that has been pre-leased to the federal government for a 15-year term.

There were two INDUSTRIAL building sales during the month of February totaling $2,511,500 in value. 5510 Canotek Road Inc. sold the industrial building located at 5510 Canotek Road to Bascorp Inc. for $1,666,500 or $45/sq.ft.. The building is located in the Queensway (Canotek) Industrial Campus and is improved with a fully leased, multi-tenant industrial/office building.

Six APARTMENT building sales were reported during the month of February totaling $5,262,000 in value. The price per unit ranged from $28,158 (for a rooming house) to $156,750 or an average of $69,374 per unit. 1550483 Ontario Inc. purchased a three-storey walk-up apartment building located at 253-259 York Street. 802727 Ontario Ltd. and Gordon White sold the property for $1,600,000. The same purchaser and vendor were involved in the sale of 327 Cambridge Street which occurred on the same date at a price of $46,429/unit. District Realy acted for the vendor in these transactions.

Ten vacant LAND transactions occurred during the month of February. This represented a total of $27,334,278 and 59% of the monthly total. Of the ten transactions, there were three commercial, four residential, one rural and two residential lot transactions.

Brental Development Corporation sold approximately five acres located at 486 Hazeldean Road to Hazeldean Properties Inc. for $2,035,000 or $407,000 per acre. At the time of sale, the property was improved with a two-storey house converted to office. The purchaser is to redevelop the site with an open retail mall, two free-standing buildings and one gas bar facility. Brent Taylor of Brentcom Realty was the listing agent on this transaction.

There were several significant residential land transactions this month. 404 Gilmour Mortgage Ltd. sold the 44,878 square foot site located at 125 Hickory Street. Quinnterra Investment Corporation purchased the property for $2,316,000 or $51.61 per square foot. This is the location of the new 190-unit, eleven-storey condominium building called The Acquerello at Dow’s Lake. The purchase price per unit is $12,189.

Claridge Homes (Church St.) Inc. purchased almost 33 acres of development land off Walkley Road in the Ellwood neighbourhood. The National Capital Commission sold the property for $3,700,000 or $112,383 per acre.

Claridge Homes (520 Driveway) Inc. purchased the vacant 1.166 acre parcel located at 520 Queen Elizabeth Drive. Claudia Theresa Chowaniec sold the property for $2,200,000 or $1,903,945 per acre. Claridge proposes to build 15 three-storey luxury townhouses. Sale prices are reported to start at $700,000!

NEWS

BOMA Ottawa released their first quarter office survey which indicates the overall vacancy rate has increased to 9.2%, up from 8.1% as reported in their fourth quarter survey. Office leasing activity remained slow throughout the city, with the softest demand for space continuing in the western suburbs. To view the survey, go to http://www.bomaottawa.org/trends/survey.shtml

CB Richard Ellis has released their first quarter industrial market overview. Ottawa returned to overall negative absorption for the first quarter, giving back almost 120,000 square feet. The overall availability rate rose to 5.9%, one of the lowest rates in the country.

CB Richard Ellis also released their first quarter office market report that indicated an overall vacancy rate of 9.0%. The report states that the “only sub-market in Ottawa to show positive absorption in the first quarter was Kanata with over 75,000 square feet of positive absorption with the majority of the space being sub-let.”

The first quarter office report from jj Barnicke indicates an overall vacancy rate of 9.1%, with the Kanata market at 28.9% and the downtown core at 2.8%. The report does note that the Federal Government purchased the Skyline Campus (750,000 square feet) at Merivale and Baseline Roads for $91,200,000 or $122/sq.ft. The report also notes that 79% of the vacant space is located in the suburban west market and 53% of all vacant space is on the sublet market.

Speaking of the sub-let market, GWL Realty Advisors Inc. released a very good report entitled “Sublet Vacancy in Canada’s Office Markets: Forecasting a return to Balance”. This report provides some insights into the difficulties of sub-leasing space for both the landlord and tenants. The report covers Montreal, Ottawa, Toronto, Calgary and Vancouver. It also concludes that there is a three year oversupply of sublet space before Ottawa returns to balance. It also notes that Ottawa is the only market where the downtown is expected to recover more quickly than the suburbs. I think one could conclude that Ottawa’s downtown has already recovered with a vacancy rate of only 3.3%.

Colliers first quarter office market report is entitled “Office Market Malaise”. It notes that office vacancy rates have continued to increase despite decreased unemployment and increased activity. However, they do project that the West/Kanata and South/Airport areas will see increased leasing activity and declining vacancy over the next 12 months due to competitive pricing and good quality options. The overall vacancy rate is reported at 10.1% with the suburbs west at 20.3% and the downtown core at 3.0%.

Ottawa-Gatineau added 6,200 jobs in March, the biggest monthly gain since August 1997 when 6,600 jobs were added, largely due to the rapid expansion in the then-hot technology sector. The increase was almost entirely in full-time jobs, driven by a large increase in construction workers and a 3,300 person hiring binge in public administration, about equally split between Ottawa and Gatineau. The large number of new jobs resulted in an overall unemployment rate 7.1% which was down 0.4% from the previous month. This is better than the national rate which was at 7.3%. Of the additional 24,400 additional jobs in the past 12 months, nearly 80 percent came from public administration and construction, which provided about 9,500 jobs each. The gains have come without much help from the technology sector. Technology has remained in a holding pattern with approximately 57,000 people employed in the sector, unchanged from February and about 700 fewer than March 2001.

The most recent report from the Ottawa-Carleton Real Estate Board indicates that for the first four months of the year there have been 4,674 transactions, which was some 14.5% less than the activity in the first four months of 2002. However, the average price of a resale home in the first four months of the year was $215,069, which is up some 8.9% from last year.