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Editor John Comba

Summer has arrived right on schedule with a heat wave that will make up for the cool beginning to the month. The Ottawa real estate market continues to perform well with considerable investor interest in assets that are leased for a long term to tenants with good covenants. There is also a trend for owner/occupants to purchase properties due to the positive leverage that is available and the fact that there is nowhere else to invest the equity they have been able to accumulate over the past three or four years (provided they didn't’t invest in NORTEL and JDS). It is also interesting that a number of buildings that had been owned or leased by NORTEL and JDS have been purchased by various levels of government over the past year. These deals have been “win win” for all involved. The public sector clients (school boards, PWGSC and the City of Ottawa) have been able to purchase buildings at less than replacement cost, NORTEL and JDS have been able to get out of long term lease commitments and the owners have been able to sell assets that had limited liquidity due to the leases that had been in place. It is good to see that there are still public servants (and I would suggest most fall within this category) who are concerned with how our money is invested and don’t take long lunches at our expense.

Now onto a summary of the sales that occurred from April 1st to April 30th. There were only 16 sales reported in this time period with a total value of almost $59,000,000. Retail sales accounted for 18.6% of the total, office 6.0%, apartment buildings 66.3%, industrial buildings 3.6% and vacant land 5.5%.

Sales data has been provided by RealTrack, Inc. For more information visit http://www.realtrack.com or call 1-877-962-9033

SALES

There was only one transaction in the RETAIL market this past month. The Towngate Shopping Centre located at 2446 Bank Street was sold by The Canada Trust Company to Toth Equity Limited for $11,000,000 or $109 per square foot of building area. The Towngate Shopping Centre is a mixed-use office and retail centre and is anchored by Produce Depot, financial institutions and health services tenants. Leonard Abramsky and David Peltz of TD Cornerstone had the property listed for sale

There were two transactions in the OFFICE market this month. The total consideration for these properties was $3,542,450. The sales ranged from $100 to $163 per square foot. 1427326 Ontario Limited sold a three-storey multi-tenant office building located at 1 Raymond Street to 1550869 Ontario Limited for $1,650,000 or $100 per square foot of leasable area. Rob Quinn of Metro Suburban acted for the purchaser.

The INDUSTRIAL market had a relatively slow month with only two transactions. Total considerations amounted to $2,128,721 and the price per square foot of building area ranged from $72 to $100. 841151 Ontario Inc. sold a one-storey multi-tenant industrial showroom/warehouse building located at 207 Colonnade Road in the Merivale Industrial Area to John Russo Holdings Inc. for $1,128,720 or $72 per square foot of building area.

There were three sales in the APARTMENT market this past month totaling $39,100,000 and ranging from $54,167 to $66,667 per unit. The largest transaction involved the buildings located at 1240 & 1244 Donald Street. Bogey Construction Limited sold 1240 Donald Street to Sunrise Suites Holdings Inc. and 1522950 Ontario Limited for $18,576,500. Deland Investments Limited sold 1244 Donald Street to Sunrise Suites (1244 Donald Street) Holdings Inc. and 1455587 Ontario Limited for $16,473,500. 1240 Donald Street is improved with an 18-storey apartment building with 283 units. 1244 Donald Street is improved with a 16-storey apartment building with 251 units. The average price per unit for the whole transaction was $65,637. CB Richard Ellis had this property listed for sale.

A seven-storey apartment building located at 1278 – 1282 Wellington Street was sold by 888223 Ontario Inc. to 1437128 Ontario Inc. for $3,400,000 or $66,667 per unit.

There were four vacant LAND transactions this month. There was one commercial land sale and three residential sales. Assaly Construction Limited sold a 6.871 acre parcel of land at the intersection of Tyrrell Place and Seyton Drive in the Bells Corners neighbourhood to Ashcroft Homes – Manhattan Square Inc. for $1,700,000 or $247,417 per acre. Ashcroft is proposing to develop 112 townhomes and 78 urban townhomes on the site.

Moremax Group Inc. purchased a 77,157 sq.ft. site on the east side of Uplands Drive and the north side of Downpatrick Road in the south end of the City for $732,500 or $9.49/sq.ft. The vendor was 1332215 Ontario Ltd.

NEWS

The most recent report from the Ottawa-Carleton Real Estate Board indicates that for the first five months of the year, the number of units that have been sold through the Real Estate Board is down some 11% from last year, but the average price is up 9.1% to $198,958.

The 2002 Ottawa Tourism Year in Review from the Ottawa Tourism & Convention Authority indicates that hotel occupancy was at 65.1% for 2002 as compared to 67.9% for 2001. The average daily room rate also declined but only marginally to $123.14 from $123.43. This resulted in a 4.5% decline in REVPAR to $80.11 from $83.85. The report also notes that supply increased by 249 rooms in 2002 and a further increase of 276 rooms is expected in 2003 with the opening of the Brookstreet Hotel in Kanata (which occurred on June 1).

Ottawa-Gatineau continues to create new jobs with another 7,900 new jobs created in May. In the past three months, a total of 21,000 new jobs have been created which is half of the 42,000 job gains in the past 12 months. There have been gains throughout many sectors including public service, retailing, construction, health care and education. The large number of new jobs resulted in an overall unemployment rate of 6.6% for May 2003, which was down 0.1% from the previous month. This is better than the national rate which was increased to 7.8% from 7.5% in April.