Carling Executive Park is comprised of three buildings erected between 1982 and 1985 that encompass 288,763 square feet. The 4.16-acre site is on the border of the Carlingwood and Westboro Village neighbourhoods in West Ottawa.
Crown investments partner Emily Hanna said the integrated commercial real estate investment and management firm was interested in 1525, 1545 and 1565 Carling Ave. due to:
* its on-site and nearby amenities, including shops, restaurants, Westboro Beach and National Capital Commission recreational pathways and trails;
* a location adjacent to Highway 417, which offers easy local and regional access, as well as visibility for the complex. It’s also fully serviced by OC Transpo;
* its position along the second phase of Ottawa’s light rail transit system. The expansion has funding commitments from all three levels of government and should be completed early in the next decade;
* 14,000-square-foot floorplates, which are suitable for single or multiple tenancies, and a central elevator core.
Carling Executive Park improvements
Carling Executive Park is 74 per cent occupied.
Crown will act as asset manager and Glenview Management Ltd., the original developer of the site, will oversee the property management. Crown and Glenview will kick off large-scale capital improvements this fall.
“I can’t speak to costs at this point, but the plan is to introduce and improve amenities to the site, including fitness, meeting and conference facilities,” Hanna told RENX.
“We will also be rolling out our Crown model suites program, where we build out tenant spaces to make the process easier for businesses looking to locate in the complex.”
Hanna said Crown would be happy to add more Ottawa properties to its portfolio if “the investment parameters are aligned.”
The acquisition comes amid a period of declining office vacancy rates and increased investment in the National Capital Region.
City-wide office vacancy declined to seven per cent in the second quarter, according to CBRE’s most recent report. The downtown and West End/Kanata sectors, which the Carling Executive Park straddles, have experienced similar declines.
Kanata, for example, had the largest vacancy decline during the past quarter, dipping from 8.1 to 6.9 per cent.
The city is also experiencing a new wave of office construction. Major buildings have been announced, or are under construction in the downtown (by Dream Unlimited and Theia Partners at the massive Zibi site), as well as in Kanata, where both Cominar REIT and Taggart are constructing new office buildings.
Combined, they’ll add about a half-million square feet of space.
All are either fully pre-leased or at least have a major anchor tenant in place.
Crown Realty IV Limited Partnership
The Carling Executive Park acquisition was made on behalf of Crown’s fourth value-add fund, Crown Realty IV Limited Partnership (CR IV LP), which was established in 2017. The fund has raised more than $234 million of capital and is actively seeking Canadian commercial real estate investment opportunities that fit its value-add investment mandate.
“We are looking for a couple of additional transactions of a similar size and scale to Carling Executive Park to close off Fund IV,” said Hanna. “We will then have our next one (Fund V) up and running to continue the same investment program.”
The CR IV LP and Plaza Partners jointly acquired a 113,435-square-foot office building and 51,296 square feet of retail on a 6.4-acre site at 30 Eglinton Ave. W., at the intersection of Hurontario Street, in Mississauga, Ont. in July.
The same fund also acquired a three-asset portfolio in Oakville, Ont. on an off-market basis in June. It includes a 2.6-acre plot of land and two flex office assets at 1045, 1075 and 1155 North Service Rd. W. which total 185,324 square feet.
Future Crown acquisitions and dispositions
“We are always looking for transit-oriented sites that we believe we can reposition to attract today’s tenants,” said Hanna.
Since Crown invests on behalf of closed-end funds, it’s continually recycling properties. Hanna expects to sell at least one Greater Toronto Area asset later this year.
Crown was established in 2001 and has more than $3 billion of real assets under management.
“We pride ourselves on our ability to be nimble, hands-on and thoughtful in our approach,” said Hanna.