The Regional Group’s purchase of two office buildings and land in the Colonnade Business Park in Ottawa for $29.02 million, one of the largest transactions since January, was the highlight of a particularly slow second quarter.
On a positive note, Colliers Ottawa managing director Kelvin Holmes said the deal is an indication that office properties of quality and scale are still highly sought-after.
“The challenge that investors have is that there’s just not a lot of product available for sale. Once investors get an asset, they typically tend to hold it, so it’s tough for new investment groups to access this market. When a good quality asset does come on the market, it attracts top dollar.”
The property at 100-130 Colonnade Rd. was sold by British Columbia Investment Management Corporation and is located between Prince of Wales Drive, Merivale Road and Hunt Club Road.
It’s close to the Ottawa International Airport, Rideau River and shopping amenities.
Fully leased to the federal government
The extensively upgraded office campus is fully leased to the federal government as the national headquarters for the Public Health Agency of Canada. It also offers more than eight acres of land for future office development.
“The property has 151,614 square feet of gross building area, which represents a price per square foot of $191 and a going cap rate of 6.6 per cent, giving no value to the excess density lands,” said Colliers Ottawa sales representative Michael Pyman.
“The lease is fully net and runs until December 2021, with step-ups in 2017.”
Two-storey office building for lease
The Regional Group, which declined comment on the purchase, also owns a 41,000-square-foot, two-storey office building at 141 Colonnade Rd. in the same business park that’s for lease.
It comes with a 135-space parking lot, perimeter security controls, elevated loading facilities, overhead door, back-up generator, security cameras and a lighting/HVAC building automations system.
The Regional Group develops residential and commercial projects, manages properties and offers consulting, evaluation, real estate assessments and real property tax advice in the National Capital Region.