Staying ahead in Ottawa’s commercial real estate market requires understand the region’s unique characteristics and attractiveness for investors, business owners and citizens
In the last five years, Ottawa has experienced a technology industry boom that has reinforced the city as a business hub, with more tech companies coming to Canada’s capital every year. Having modern IT and a strong digital infrastructure in place allows leading commercial real estate providers to easily tailor workspaces to meet tenant needs for connectivity and provides the flexibility to adapt office spaces to each tenant’s working space preferences.
As the city’s attractiveness as a technology hub continues to grow, what can landlords do to increase the profile of their properties among potential tenants and stay ahead of the curve?
Creating spaces that are move-in ready
No company wants to move offices and then must wait for their landlord to adjust their space to suit their needs. Technology companies require specific digital infrastructures to be in place before moving into a new location to allow efficient data coverage and flexibility with carriers without interrupting critical operations. At the same time, they require special office layouts and design elements that allow for down time and a comfortable and modern work environment for their employees.
Getting an office building certified by WiredScore is one of the most important steps property management teams can take to guarantee new tenants will have no issues with connectivity and communications when moving in. A Wired Certified building gives tenants the peace of mind that they will not struggle with internet and telecom providers, as well as guarantees a top tier digital infrastructure and connectivity reliability to support seamless business operations.
One example of a collaboration between a landlord and incoming tenants to guarantee a seamless moving process is the flexible office design that was developed for Shopify in 2014. In addition to being ready connectivity-wise before moving, the company expressed the need for a space that was completely unique to their work culture. Morguard worked with their team ahead of the move-in date to customize Shopify’s space, including unique design elements such as soundproofed rooms. The building in downtown Ottawa is also one of the most recently Wired Certified buildings in the city.
Working with tenants in advance of them moving into a space helps in providing a connected, efficient and dynamic workspace, demonstrating the importance of landlord-tenant collaboration to understand and meet their unique business needs.
Customizing buildings to serve a connected community, not only a business
In an accelerating business hub like Ottawa’s downtown core, co-existing with the surrounding communities and understanding their working and living dynamics has become essential for the growing number of businesses opening in the area. Adding to Ottawa’s attractiveness as a destination to start and grow a business, the city continues to attract young professionals and families looking for affordable housing. For businesspeople, desirable rent prices for in-demand commercial space (currently sitting at around $20,000 to $25,000 per month), the downtown light rail transit (LRT) line, and a vibrant lifestyle have become the perfect combination to attract and retain workforces. Many of the new employees move to the city looking for better work-life balance.
Customizing a building to serve their community rather than a business alone ultimately boils down to putting the needs of tenants and their workforces first. Employees of these downtown buildings can spend over eight hours a day at work and are increasingly spending more time co-existing with their neighbours. It is important to keep these emerging working and living dynamics in mind when considering adding services to a downtown community. For example, opening a grab ‘n go soup and sandwich shop, a grocery store or a gym in a building that houses technology businesses or public service tenants, versus a four-star restaurant in a building that houses private sector tenants with whom this would be in demand.
Consulting data and economic trends
To truly stay ahead of today’s changing business needs and trends, always consult on the economic trends and market fundamentals of the real estate market of interest. An example of this kind of report is the Economic Outlook and Market Fundamentals that Morguard releases quarterly and annually. It provides a deep analysis of the national and international trends impacting a region’s economy. Some highlights related to the Greater Ottawa Area include:
- The multi-suite residential rental asset class experienced strong growth and investor confidence throughout 2019, driven in part by an increased number of young workers leaving their family homes combined with an uptick in the number of international students and immigrants coming to the region that added upward pressure to rental prices.
- The industrial property segment was driven by the warehouse and distribution, and niche manufacturing and technology sectors in 2019. For this year, the report forecasted national and local investors to continue to compete aggressively for properties in this segment, potentially pushing values slightly higher than those registered last year.
- In the office leasing asset class, healthy demand patterns resulted in the absorption of a significant volume of vacant space in the Greater Ottawa Area. The investment market was forecasted to remain competitive, as a limited number of prime downtown and suburban properties were expected to be available for acquisition.
- The region’s retail asset class showed signs of stabilization in 2019. National and local investors continued to look for properties with stable tenant rosters and solid performance, supporting the retail property sector to continue to display resiliency.
Creating move-in ready spaces, including getting properties certified by WiredScore, customizing buildings to serve a connected community and consulting data and economic trends are examples of actions that can be taken to increase property profile among potential tenants. In Ottawa, where technology businesses continue to move in, staying on top of the trends in connectivity and communications and being flexible to meet a potential tenant’s needs are part of the differentiators that will make a building stand out.
Michael Swan is assistant vice president of Property Management Office/Industrial Leasing in Morguard’s Ottawa office. Morguard is the second-largest property owner in Ottawa, after the Government of Canada.