One of the main reasons people choose not to move to Ottawa is the weather. The mistaken perception is that it is too cold. Your heard it here first: there is no better place to be in February than in this great city. Today it is -10c, the sun is shining and it is the first weekend of Winterlude. This may seem cold for some of you but when you are dressed for it and active, you don't notice the cold (I promise). Winterlude is a celebration of winter that is focussed around the Rideau Canal (the longest skating rink in the world). Nothing beats a skate on the Rideau Canal with the family, hot chocolate, and of course a beavertail. For those readers who have never visited Ottawa during Winterlude, I highly recommend it. I would also suggest that any high-tech companies having a hard time convincing people to move to Ottawa invite their possible recruits to Ottawa over a Winterlude weekend. I believe their success rate would increase.

Now on to the latest real estate sales and news.

SALES

December was a very busy month with a number of sales closing before yearend.

Two INDUSTRIAL properties on Iber Road were sold by Goulbourn Development Corporation (Riocan) to two companies owned by the same purchaser. The first is located at 113 Iber Road. It is a one-storey 44,800 square foot industrial building that is 100% leased to Allied Pickford until April, 2004. The building has 26 foot clear ceiling heights with 5 dock level doors. The purchaser was 113 Iber Road Inc. The purchase price was $1,535,000 or $34/sq.ft.

The other building is located at 110 Iber Road. It is 62,500 square feet in size and is 100% leased to Lee Valley Tools until December, 2002. The purchase price was $1,965,000 or $31/sq.ft. This building has 27 foot clear ceiling heights and 10 dock level doors.

A vacant INDUSTRIAL/OFFICE that was formerly owned and occupied by Metlife at the southeast corner of Walkley and Conroy Roads in the Ottawa Business Park was purchased by Shenkman Corporation for $4,600,000 or $37/sq.ft. The two building, 123,600 sq. ft. complex has since been leased to JDS Uniphase who now lease in excess of 330,000 sq.ft. in the immediate area. On a personal note, it is great to see my former employer investing once again in the Ottawa market. This in my view, is yet another bullish indicator for Ottawa real estate.

Canada Trustco Mortgage Company sold a 20,496 square foot OFFICE building at 340-342 MacLaren Street to 888260 Ontario Inc. in trust for $1,000,000 or $48.79/sq.ft. The property consists of two older single-family houses that were converted to offices and a newer three-storey office building at the rear of the property.

A 29,454 square foot RETAIL plaza located at 1412-1444 Walkley Road and 2925 Albion Road was sold by Vivmar Investments Limited to Westdale Construction Co. Limited for $2,100,000 or $71/sq.ft.

Le Cercle Universitarie d'Ottawa was able to sell their 13,850 square foot RESTAURANT CLUB at 453 Laurier Avenue East to Eleanor's Cuisine Francaise Inc. for $1,400,000 or $102/sq.ft. The purchaser will be operating the building as a Cordon Bleu cooking school and restaurant.

Two APARTMENT transactions from November that I missed in the last newsletter are noted below.

2201 Riverside Drive (the Crossroads Apartments) was sold by 2201 Riverside Inc. to Riverbank Apartments Limited for a consideration of $17,107,000 or $52,637/unit. This is a 325 unit, 21 storey apartment building that was constructed in 1973.

Eleven identical two and half-storey 6 unit apartment buildings located on Tillbury, Edison and Melbourne Avenue were sold by M. Tanner Realty Limited to Devmax Inc. for a consideration of $2,200,000 or $33,333/unit. These buildings were reported to have been constructed in the late 1950s/early 1960's.

In December there were also two major APARTMENT transactions. The first is the Fairview Towers located at 201-219 Bell Street. The property consists of a twelve and thirteen-storey apartment building that was constructed in three phases between 1961 and 1963. It has a total of 450 units. The vendor was 936323 Ontario Inc. and the purchaser was Ottawa - 201 Bell St. Inc. The price was $17,200,000 or $38,222/unit.

The other major apartment building transaction in December was 335 Cooper Street, a 70 unit building at the corner of Cooper and O'Connor Streets. The building was sold by 131536 Canada Inc. to 335 Cooper Ltd. for $2,850,000 or $40,714/unit.

A three-storey 91 unit RETIREMENT home was sold by Brookside Manor (Kanata) Inc. to Vital Retirement Living Inc. for $10,822,794 or $118,931 per suite. This building was recently constructed.

Some of the more significant LAND sales in December are summarized below.

A 7.52 acre parcel of commercial land located at the southwest corner of Walkley and Conroy Roads was sold by the City of Ottawa to 1374441 Ontario Inc. for $1,495,400 or $4.56/sq.ft. A neighbourhood shopping centre is proposed for this site.

The former "Hollywood North" lands on the south side of Blais Road in south Gloucester were sold by 1374859 Ontario Inc. to 809224 Ontario Inc. (in trust) for $400,000 or $3,175 per acre.

A 10.74 acres site at the corner of Iber and Hazeldean Roads in Stittsville was sold for $375,000 or $34,884 per acre. The vendor was two numbered Ontario companies and the purchaser was Iber Technology Park Limited.

NEWS

The headline in the business section of Saturday's Ottawa Citizen read "Ottawa Stocks are big winners". Since November 1, Ottawa technology stocks have increased an average of 228%. The largest increase was by International Datacasting up a whooping 1,223% and the lowest was DY4 up a very respectable 33%. Only 7 of 20 stocks had increases of less than 100%. I would expect this type of growth to have a positive impact on the local real estate market over the next year.

The local unemployment rate increased in January from 5.9% to 6.0%. Although, 1,600 more people were hired in January, another 2,700 were added to the job market as job seekers. Those sectors that experienced the biggest declines were wholesale/retail trade (3,800) and recreation and entertainment (2,400). The strongest sectors included public administration with 2,300 new jobs (does anyone still believe the government is downsizing) and manufacturing and information and cultural services which gained 1,500 jobs.

For anyone investing in or mortgaging ski hills this might be of some interest. The Edelweiss ski hill in West Quebec was purchased by Mont Saint-Sauveur International for approximately $1,700,000.

The Conference Board of Canada in its most recent quarterly Metropolitan Outlook, predicted that Ottawa would be second to Edmonton in overall economic growth at 3.9% but will have the highest employment growth over the next five years.

The latest Retail Space Survey by Royal LePage shows the overall vacancy rate at 3.7% for the end of 1999 down from 5.0% last year. The vacancy rate for Regional Malls is at 2.2%, for Community Malls it is 2.8% and for Neighbourhood Malls it is 5.4%.

Royal LePage also recently released their fourth quarter Office Space Survey which indicated the overall vacancy rate (including space available for sublet) for office space in December 1999 was at 6.3%. This is a large decrease from December 1998 when the rate was at 7.8%. The vacancy rate for Class "A" space was reported at only 3.3% for the whole region. This should support continued increases in rental rates as well as some new construction.

In comparison, the BOMA survey of office space vacancy which is prepared by jj Barnicke indicated an overall vacancy rate of 6.8%. This also includes space for sublet. The Kanata market had the lowest vacancy rate at only 2.9% overall and 1.2% for Class "A" space.

According to the Ottawa-Carleton Real Estate Board, Ottawa-Carleton home sales hit a new record in 1999 with 11,329 home sales. This is an increase of 18.7% over the record set in 1998. The average price was $149,500 which was 4% higher than last year.

Lastly, the largest real estate deal in the Ottawa area for a number of years was completed in January. Details on Penreal's recent $121,000,000 purchase for part of the Glenview portfolio will be highlighted in next month's newsletter.