Summer has arrived in the City of Ottawa with the music festivals in full swing. I just spent most of the past weekend at the Ottawa BluesFest (the second largest Blues Festival in North America) and did not notice too many from the Ottawa real estate community in the audience. Not surprising as there is no reason for anyone in Ottawa real estate to be singing the blues given the recent run up in rental rates and market values. However, I did see Alexi Yashin at the festival with his super model girlfriend. Now there is someone who has been singing the blues for no reason for the past year.

Now on to a summary of the sales that closed in May.

SALES

As noted in our last newsletter, O & Y Properties Inc. sold a PORTFOLIO of properties in the Ottawa area to Sakto Corporation, an international real estate firm with local connections. The portfolio consisted of 2735 Iris Street, a 42,415 sq.ft. retail building 100% leased to Aldo Shoes and Chapters Inc.; 2745 Iris Street, an 82,053 sq.ft. six-storey Class "A" office building 100% leased to NORTEL; 2625 Queensview Drive a 46,613 sq.ft. two-storey office building fully leased to EDS Sysemhouse Inc and a three building complex on Brewer Hunt Way and Richardson Side Road in Kanata that has a leasable area of some 112,656 sq.ft.. The three buildings in Kanata are fully leased to NORTEL and are all connected. The total size of the portfolio was 283,737 sq.ft. and the purchase price was $31,150,000 or $110/sq.ft. The listing agents were Trevor Blakely, Chris Bell and Nathan Smith of Royal LePage.

A 9,900 sq.ft. OFFICE condo at 2283 St. Laurent Blvd. was sold by Proslide Technology Inc. to the Medical Council of Canada for $950,000 or $96/sq.ft.

An older three-storey off ice building at 203 Catherine Street was sold for $1,025,500 or $60.50/sq.ft. by Slater Financial Inc to 895596 Ontario Inc.

A 45% interest in a 25,364 square foot office building at 350 PalladiumDrive in Kanata was sold by Sukang Inc. to 856581 Alberta Ltd. for $1,134,900. This works out to $100/sq.ft. for a 100% interest. The purchaser already owned the other 55% interest in the property which is mainly occupied by WebPlan.

A three-storey 3,124 sq.ft. COMMERCIAL building at 240 Argyle Avenue was sold by 622291 Ontario Ltd. to 3450511 Canada Inc. for $465,000 or $149/sq.ft. of leasable area. The listing agents were Cheryl Kardish-Levitan and Phil Berman of Ventron Realty Corp.

A 4,107 sq.ft. single-storey RESTAURANT at 2422 St. Joseph Blvd. in Orleans was sold for $475,000 or $116/sq.ft. The vendor was 974185 Ontario Inc. and the purchaser was David Morphy and Pierre Cleroux each as to a 50% interest.

Shenkman Corporation continues to be a purchaser in the Ottawa area. Their most recent purchase was of a 122,000 sq.ft. RETAIL PLAZA at 1162 Cyrville Road along Highway 417. The vendor was SREIT (Cyrville) Ltd. and the purchase price was $5,750,000 or $47/sq.ft. The property has a site area of 13.8 acres and approximately 100,000 sq.ft. of the building (formerly a Zellers store) was vacant at the time of sale. However, Shenkman leased the Zellers store to JDS Uniphase for five years. This is the third building that Shenkman has leased to JDS. Facilities Commercial was the listing agent.

A vacant 26,000 sq.ft. INDUSTRIAL building located at 5359 Canotek Road in Gloucester was sold by 462517 Ontario Limited to 1292172 Ontario Limited for $850,000 or $33/sq.ft.

Although the local economy is performing very well there are still some power of sales. A recent one was of a 13,000 sq.ft. building at 2626-2628 Edinburgh Place in the east end of Ottawa by Royal Trust Corporation of Canada for $510,000 or $39/sq.ft. the purchaser was 1120952 Ontario Inc.

The APARTMENT market was a little bit busier in May with a 55 unit building at 218 MacLaren Street selling from $2,215,000 or $40,723/unit. The vendors were Kareem Saikaley, Chales Saikaley and Jacqueline Kajjouni and the purchaser was 1172223 Ontario Limited.

The Monfort Manor, a 171 unit apartment building located at 550 Lang's Road in the east end of Ottawa, was sold by Monfort Manor Inc. to D. Shafran Investments Ltd. for $10,043,000 or $58,713/unit.

A 19-unit apartment building at 55 Sweetland Avenue was sold by Birnic Enterprises Inc, in trust to 1414455 Ontario Inc. for $1,125,000 or $59,211/unit.

A 2.02 acre parcel of VACANT LAND on Main Street in Stittsville was sold by Base Developments to T.L. Properties IV Ltd for $550,000 or $6.25/sq.ft. of site area. This parcel is located between Carp Road and Hazeldean Road.

A 3.934 acre site in the Fisher Heights neighbourhood of Nepean was sold by the Ukrainian Catholic Episcopal Corporation of Eastern Canada to Longwood Building Corporation who are developing it with 37 bungalow townhouses. The purchase price for the land was $786,000 or $199,797/acre or $21,243/unit.

Northtech Land Development Inc. have added to their NorthTech Campus in the Kanata North Business Park by purchasing a 30.7 acre parcel alon Terry Fox Drive from Otnim Properties Limited (Minto) for $2,720,552 or $88,617 per acre. This land is along the northern boundary of the NorthTech Campus which is being developed by Canderel. Confirmed tenants in the park include Cisco Systems, Entrust and Marconi.

NEWS

As it is summer time I will keep this section short.

The Ottawa economy continues to outperform the national economy with a local unemployment rate in June at 5.3% as compared to the Canadian average of 6.6% and the average for the province of Ontario at 5.5%.

According to the Ottawa-Carleton Real Estate Board, there were 1,327 properties sold in June bringing the total for the first half of the year to 6,820 as compared to 6,154 for the same period last year. The average price so far this year was $158,579 which is 5.5% higher than last year.

Lastly, Royal LePage has released their latest survey on the Ottawa Industrial market that indicates the overall vacancy rate is at only 3.3%. This is a significant improvement over last year when it was at 7.9%. It should be noted that two of the sub-markets (Morrison/Queensview and Woodward/Carling) reported a 0% vacancy rate. The survey notes "With a continuing demand for office space in the Ottawa market greater amounts of traditional industrial space is being converted for primarily office use." We have noticed this trend as well and expect it to continue for some time yet.