3199 Palladium Dr., in Ottawa, a five-storey office complex and adjacent land, has been acquired by Morguard. (Courtesy Cushman & Wakefield)

Morguard (MRC-T) has purchased one of Ottawa’s newest office properties for $64.5 million from Taggart Group of Companies.

The five-storey, 170,000-square foot building at 3199 Palladium Dr. in Kanata, which is fully leased by Ottawa-based supply chain logistics company Kinaxis, was occupied in the first quarter of this year after being design-built by Taggart Group.

“It’s brand-new construction in the Kanata market, which has been one of our best performing sub-markets and continues to be strong,” said Cushman & Wakefield Ottawa associate vice-president Scott Brooker, who brokered the deal along with senior VP Nathan Smith.

“When you look at the Ottawa market in general, in times of disruption with the economy nationally or internationally, Ottawa has proven to be a stable port in the storm. It’s a stable, strong market that weathers volatility well.

“Investors and institutional investors are attracted to this market at all points in the cycle, but I think more attention is put on Ottawa when there’s some sort of disruption or gyration in the market.”

That has been reflected again in recent weeks, with two other Ottawa offices also transacting. True North Commercial REIT is acquiring the 11-storey, 174,000-square-foot office building at 400 Cumberland St. The sale of that building, fully tenanted by a government agency, is to close on Aug. 15.

Vancouver-based Lanyard Group also acquired a low-rise, 46,500-square-foot office building at 2625 Queensview Dr. for $9.35 million earlier this month.

Property details and future development potential

The Palladium Drive building, located in the Kanata West Business Park, includes a 5,500-square-foot rooftop patio. It’s also accompanied by 540 surface parking spaces.

The site was originally acquired by Taggart Realty Management, which led the design and approvals process in cooperation with Kinaxis for the interior fit-up.

Doran Contractors was the construction manager, the building shell and exterior was designed by McRobie Architects + Interior Designers, and the interior fit-up was designed by CSV Architects.

The deal also included adjacent land large enough to add another office building. Taggart had suggested a five-storey, 100,000-square-foot structure, but Morguard has made no announcement on what its future plans for the land might be.

“The strength of the Ottawa market and the nature of the building being brand-new and backed by a credit tenant attracted all walks of investors,” Brooker told RENX.

The Kanata West Business Park location also offers easy access to Highway 417, nearby restaurants and retail, and Canadian Tire Centre, the home of the Ottawa Senators National Hockey League team.

Brooker expects the Ottawa commercial real estate market to continue to perform well and he anticipates seeing continued transaction activity throughout the rest of the year.

The buyer and seller

Morguard is a fully integrated real estate company based in Mississauga that owns, manages and invests in assets across North America.

It employs about 1,300 and had $15.3 billion in real estate assets under management as of June 30 through three publicly traded entities: Morguard Corporation; Morguard REIT; and Morguard North American Residential REIT.

Morguard oversees 14.7 million square feet of retail space, 12.2 million square feet of office space, 7.1 million square feet of industrial space, 18,300 residential units and 4,201 hotel rooms in Ontario, British Columbia, Alberta, Quebec, Manitoba, Saskatchewan and the United States.

Taggart Construction was founded in Ottawa by Harold Taggart in 1948 and has grown over the years so that the Taggart Group now also includes Doran Contractors, Tamarack Homes, Tartan Homes, Taggart Construction and Taggart Realty Management.

It employs more than 700 and offers a full range of real estate and infrastructure development services.

Other Taggart Group projects include:

• Tamarack Wellington, a six-storey, 60,000-square-foot residential condominium with 7,000 square feet of ground-level retail and two levels of underground parking at 10 Rosemount Ave. in Ottawa;
• Signature Centre, a 117,000-square-foot retail site on Terry Fox Drive in Kanata;
• and Frontier, a 23-storey, purpose-built rental apartment at 2280 City Park Dr. in Ottawa.