By Erika Siegert, Senior Analyst, National Research Insights | December 3, 2020

As a result of the uncertainty surrounding COVID-19, the state of the commercial real estate market for many investors within the Ottawa market has become even more uncertain. As two full quarters have now passed since the onset of the pandemic, activity in the third quarter reflects concerns of the second wave spreading across the provinceWhile quality assets will continue to be in high demand by investors, the bidask gap has persisted as buyers are cautious to not overpay for assets at this point in time. Through the first three quarters this year, the Ottawa market registered a total of $1.1 billion, which represents a 44% decrease compared to the same period in 2019. The third quarter totals accounted for only $230 million, a 71% decrease from Q3 2019 and a 42% drop from the previous quarter

Ottawa property transactions all sectors by year Q3 2020

Despite making up over one-third of the total sales value in Q3 2020year to date totals in the apartment sector dropped 64% compared to 2019, with investment volume of only $153 millionHowever, strong apartment performance in the third quarter with sales over $85 million can be largely attributed to two transactions over $20 million. Similarly, the industrial sector saw a substantial fall-off from the record high of Q3 2019 but recorded its highest level since, though year-to-date transaction volume dropped 81% from last year. Residential land sales remained somewhat steady, contributing to over a quarter of the Ottawa market’s sales in Q3 2020 , with year to date sales down only 9% compared to 2019. Naturally, given the challenges and uncertainty, investors have become much more selective with their investments as only 56 transactions over $1 million took place in the third quarter, with only four of these being greater than $10 million. According to Altus Group’s Investment Trends Survey Q3 2020 results, Ottawa remains on the positive side of the buy/sell ratio, although has experienced decreasing momentum over the first three quarters of this year. Similar to trends seen in other markets, average cap rates in Ottawa have remained relatively stable despite notable jumps in Downtown Class “AA” Office and Tier I Regional mall assets that have both faced challenges this year.  

Ottawa overall capitalization rates - Q3 2020

Notable Ottawa investment transactions during Q3 2020:

Manor Village, Nepean – Apartment
This sixbuilding, 111-unit townhouse complex located in Nepean represented the largest sale in the third quarter. Acquired by Forum Equity Partners for $26.3 million, this asset was sold by the Minto Group who originally acquired the property in a receivership sale just over two years ago for $16 million.

190, 200, 203 & 210 Colonnade Road, Nepean – Industrial
This five-building, multi-tenanted industrial transaction is the largest of this asset class in the third quarter. Acquired by Fiera Real Estate for $22 million, this asset sits on 8.6 acres and benefits from short term leases and below market level rents, presenting an opportunity for income growth.

353 Friel Street & 301 Laurier Avenue East, Ottawa – Apartment
This 91-unit apartment complex was acquired by Saickley Enterprises Ltd. for $21.2 million, which represented Ottawa’s third largest transaction in the third quarter. The property, also known as the Sandy Hill Apartments, is conveniently located in the downtown area of Ottawaa short ten-minute walk to the University of Ottawa campus.

861 Clyde Avenue North, Ottawa – Residential Land
The largest land transaction seen in the third quarter was this 6.7acre site which was sold by Saputo Inc. for $8.5 million. The property is currently improved with an industrial building, but was advertised and sold as a re-development site, in large part due to the property’s proximity to current and future transit infrastructure. As of the end of November, the purchaser intends to propose a six-building development with residential towers up to 30-storeys in place of the existing industrial facility.

1345 Bank Street, Gloucester – Residential Land
Located just south of the Rideau River and within close proximity to Carleton University, this 0.4acre parcel was acquired by Boulet Construction for $5.5 million. This site will be utilized with 1335 Bank Street, the adjacent parcel to the north which was also acquired by Boulet Construction in May 2019. Altogether, this land assembly consists of a total of 0.7 acres and was acquired for a total of just over $9 million. Development applications have been submitted by the owners for the development for a 26-storey, 391unit mixed-use building consisting of 326 residential units and 65 hotel units. 

Ottawa property transactions by asset class Q3 2020 YTD

The current pandemic has led to further uncertainty for both buyers and sellers about the state of the general economy. Potential purchasers are much more cautious about their investments and are looking for stability in their assets. Institutional and larger investors, which typically make up a significant portion of Ottawa’s overall investments, have been more passive with their acquisitions this quarter, where the majority of activity is coming from smaller private investors. With transportation improvements being the focus at the provincial and municipal level, the Ottawa market will continue to see an increase in transit-oriented developments, resulting in continued growth in re-development site acquisitions. Despite the slowdown in activity this quarter, investors still find Ottawa an attractive market that will continue to grow. With investors now being more comfortable navigating through the current uncertainty, the fourth quarter could witness a rebound with activity and investments leading into the new year. 


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Elizabeth Lambe
Manager, Communications
Altus Group
(416) 641 – 9787

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Erika SiegertSiegertresearch

Senior Analyst, National Research Insights, Data Solutions

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