UPDATED WITH QUOTES: Colonnade Bridgeport and Fiera Real Estate have acquired a five-acre redevelopment site just east of downtown Ottawa with up to 2.3 million square feet of development capacity. The partners are now planning a major, mixed-use project for the property.
Fiera Real Estate made its share of the purchase on behalf of the Fiera Real Estate Core Fund LP. Financial details were not disclosed.
The transaction, announced Monday morning, brings to a close a two-year search by Colonnade Bridgeport for a development property in the area.
“We have been looking in the node,” said Connor Shea, Colonnade Bridgeport’s director of asset and investment management, in an interview with RENX. “We’ve actually had our eyes on the property for several years. ”
Currently home to Dustbane Products Ltd., a manufacturer of sustainable cleaning products, the site contains 155,376 square feet of industrial buildings.
“We don’t really (see) this as an Ottawa east node, it’s more of a central node that’s been under development,” Shea explained. “You are starting to see a gentrification of the area.
“We saw a great opportunity here to get in at the forefront.”
The redevelopment site
Located just over three kilometres from Parliament Hill, the property is beside a transportation hub including the Ottawa VIA Rail train station (part of the Toronto-Ottawa-Montreal corridor), the city’s new LRT line, Highway 417 and links to Ottawa’s extensive recreational pathways.
In recent years, the area has seen major office, retail and other developments as it transforms from a mainly industrial district.
The huge 110-acre Trainyards retail complex is a block away and Ottawa’s RCGT Stadium baseball park, a hotel and convention centre complex are just across Hwy. 417 (linked by a footbridge).
The redevelopment, which Colonnade and Fiera would like to start within a few years, would add significant multiresidential to the mix, along with other mixed-use components.
“We’ve used the term urban village to some extent because you want to have the ability to bring in some different uses that are going to leverage each other,” Stephen Martin, Colonnade’s director of development, told RENX.
“There’s also great opportunity for purpose-built rental there just by virtue of the fact there is already an established rental base.”
In addition to the office and retail in the area, there are three major hospitals nearby in addition to the University of Ottawa.
“It’s actually a strong and compelling argument that there’s a requirement for some new purpose-built rental in a community which will have services and retail components,” Martin said.
It’s expected buildout would take about a decade.
“Generous envelope” for density
The fact the land is pre-zoned for significant new density and a wide variety of possible uses made the site even more attractive.
“We know we have a very generous envelope to work within from a zoning perspective which is also another compelling factor for being able to get this site,” Martin said.
“There are some real opportunities to do quite a bit of density, 30- and 20-storey towers. The 2.3 (million square feet) is notional, that’s the capacity that the zoning would support right now.
“We’re working to determine what the best mix is of density, in terms of number of units, and some of the other uses.”
Completing the deal during the COVID-19 pandemic wasn’t without “a few bumps in the road” Shea said, but several factors combined to make it happen.
Colonnade Bridgeport, Fiera RE already partners
First, Colonnade BridgePort and Fiera Real Estate are partners on several Ottawa developments, including Westboro Connection, a transit-oriented mixed-use development in Westboro, and Hintonburg Connection, a purpose-built high-rise rental TOD near Tunney’s Pasture LRT station.
Colonnade Bridgeport also manages several Fiera assets both in Ottawa and in Toronto.
“This transaction fell squarely in the COVID 19 shutdown,” Shea said.
“Working with them was really great because they understand risk, they understand how to navigate risk very well and that’s why we enjoy them as a partner.”
They also completed a sale leaseback with Dustbane, providing holding income while the pre-development process takes place.
“The leaseback provides us with an attractive income return from a quality tenant and allows us the time to master-plan the project, and Dustbane the time to find an alternative location,” said Hugh Gorman, CEO of Colonnade BridgePort, in a release announcing the sale.
Dustbane is a longstanding business in Ottawa, with a history stretching back 112 years. It will now begin the search for a new site for its operations, which could be a challenge considering Ottawa’s low industrial vacancy rate of just over two per cent.
However, Shea noted there is ample time to make those preparations, and Colonnade Bridgeport will be part of the process to “make sure they find an appropriate home.”
About Colonnade and Fiera
Colonnade BridgePort is a 35-year-old firm which offers a fully integrated, real estate services platform throughout the real estate lifecycle. It is headquartered in Ottawa, with offices in Mississauga and downtown Toronto.
Colonnade BridgePort’s residential focus is to develop and manage modern apartment buildings, located in desirable neighbourhoods along Ottawa’s transit corridors.
Fiera Real Estate is a global real estate investment management platform serving investors in Canada and the United Kingdom. Fiera Real Estate globally manages over $6.4 billion of commercial real estate through its investment funds and accounts as of March 31.
Fiera Real Estate has assembled a highly diverse portfolio, both geographically and across multiple asset classes.