Spring has arrived in the National Capital with the Tulip Festival, the tour de Nortel and my first sighting of ducklings in the Rideau Canal. There is nothing better to start or end your day in Ottawa than by biking, jogging, walking, or blading along the Rideau Canal. Ottawa has some of the best recreational pathways including paths along the Ottawa River, the Rideau River and the Gatineau Hills. This is a great way to see the city and release the stress of the day.

I guess that is enough of the travelogue. Now onto a summary of the sales that closed in March. The investment market continued to be quiet but there were plenty of land sales.

SALES

A 5,550 sq.ft. heritage OFFICE building at 226 MacLaren Street was sold by Les Placements Jeton Bleu (1986) Inc. to Julius Dawn for $735,000 or$132/sq.ft.

The largest INDUSTRIAL building transaction in March was the purchase by 95661 Canada Ltd. of 1485-1489 Youville Drive in Orleans (this is a community in the east end of the region for those not from the Ottawa area) from Malaway Investments Limited for $1,400,000 or $255/sq.ft. The property was purchased for owner occupancy by a car dealer.

A building supplies business at 545 Donald B. Munro Drive in Carp (west of Kanata) was sold by Douglas Anthony Kazda to 1394893 Ontario Inc. for $420,000 or $42/sq.ft. of building area. The vendor took back a mortgage for the full purchase price for five years.

The APARTMENT market was quiet again this month with only one sale of a 386 unit apartment development at 2975 and 2995 Albion Road. The property was sold by LS Inc. and Revelstoke Corporation to The Oaks Apartments Limited (Osgoode Developments). The purchase price was $19,250,000 or $49,870/unit. Ventron Realty was the agent on this transaction.

An older MIXED USE building at 1008-1024 Wellington Street that contains 9 retail stores and 11 apartments units was sold for $710,000. The vendor was Ying Kit Ha, Kam Tak Kwoon and Chunge Yuk Chow and the purchaser was 1374672 Ontario Inc.

The Hillside PLAZA located at 585 Montreal Road was sold by Riocan Holdings Inc to 1391778 Ontario Inc. for $1,550,000 or $45/sq.ft. However, this sale is of a leasehold interest as the plaza is subject to a land lease that runs until 2053. The vendor took back a mortgage for $1,200,000 for a five year term at 8.25%.

A small plaza at 2571-2575 Baseline Road near Greenbank Road was sold by Faye Kirsh to Danny Chan, Teresa Wong Chan and Stanley Hung-Kai Chan for $725,000 or $128/sq.ft of ground floor area or $65/sq.ft. including the basement area.

The banking industry continues to dispose of real estate assets and close branches. The most recent one was a Royal Bank branch on 2821 Riverside Drive in the Mooney's Bay area. The property sold from Globe Realty Holdings Ltd. to Global Mart International Technology Inc. of $300,000.

A single-storey retail building at 333-335 Cumberland Street was sold for $613,000 to Domeron Inc. The vendors were Terrence Keough, Barbara Chase, David Martin, William Couch, Richard Dare, Hendrick Van Rijswijk and Jewel Couch.

The market for VACANT LAND continues to be active with the following sales.

Alberta Treasury Branches sold a 2.34 acre site at the northwest corner of Terry Fox Drive and Palladium Drive in the City of Kanata for $550,000 or $235,042/acre. The purchaser was 987379 Ontario Limited, in trust. Rumours are that this is to be developed with a hotel. Philip Zunder of Colliers was the selling agent.

A 86,763 sq.ft. site at the southeast corner of Montreal Road and Sinclair Street in the east end of the city was sold for $545,000 or $6.28/sq.ft. The vendor was 1230522 Ontario Inc. and the purchaser was 1394734 Ontario Inc.

A 5.425 acre industrial site at the northeast corner of Hawthorne Road an Stevenage Drive was sold be Cohen & Cohen to Arnold Kimmel Limited and Hartman Management Corporation for $450,000 or $82,949/acre.

The northwest corner of Merivale and Baseline Roads (known as Creampuff Corners for the Ottawa readers) was finally purchased by the owners of Meriline Court for $480,000 or $34.33/sq.ft. The vendor was the estate of Ainsley Thomas Elliott Anderson. This purchase will allow the owners of Meriline Court to improve the overall profile of their office park. Roger Cassagrande of jj Barnicke was involved in this transaction.

The Governing Council of the Salvation Army in Canada sold their 25 acre parcel at the Terry Fox interchange with Highway 417 in Kanata to 139486 Ontario Ltd. for $5,000,000 or $200,000 per acre. This site was to have been developed with the Grace Hospital but there was never any funding available. It will be interesting to see how it will be developed now. Gord Taylor of Royal LePage was the agent for the vendor.

A 9.88 acre site on the north side of Klondike Road was sold by Remo and Rita Zuccarine to 1384646 Ontario Inc. for $750,000 or $75,911/acre. This is located in the north end of the City and is still a couple of years away from development.

Newill Corporation sold their 4.94 acre parcel of land on the east side of Sunderland Street to the south of Hunt Club Road to 1323545 Ontario Inc. for $750,000 or $151,822/acre. The vendor took back a mortgage for $550,000 at 10.00% per annum for a two year term.

Claridge Homes (Carson) Inc. purchased a 16.6 acre site from 3173763 Canada Inc. at Carson and Montreal Roads in the east end of the city for $1,450,000 or $87,349/acre. The site had formerly been owned by Assaly Corporation who had plans to develop it in the late 1980s. This is yet another sign that the decade long recession in real estate has finally ended.

NEWS

The local unemployment hit a 10-year low in April at 5.4% down from 5.9% in March. This is the lowest rate since June 1990. However, the number of employed people did not increase but rather the number of people looking for work decreased. The local economy has created 25,000 jobs over the past 12 months which is considered to be very good and all indications are that this should continue.

According to the Ottawa-Carleton Real Estate Board, there were 1,271 properties sold in April bringing the total for the first four months to 3,982 as compared with 3,304 for the first four months of 1999. The average price was $157,403 which was 5.4% higher than last year.

According to CMHC, housing starts for the Ottawa region are up 43.5% for the first four months of the year over the same period last year. If the new 312-unit residence at Ottawa U is not included starts are up a respectable 11.3%. Ottawa is doing much better than the rest of the country where housing starts have fallen 5.4%.

NORTEL Networks has announced that they will be spending $211,000,000 on expanding their real estate requirements in the Ottawa area. This will include expanding the head office on Moodie Drive by 200,000 square feet, leasing an additional 200,000 square feet in a new built-to-suit at Baseline Road and Woodroofe Avenue, and planning to occupy a further 200,000 square feet at a site to be determined. NORTEL noted that they will be hiring approximately 1,250 new employees as part of this expansion. This is the third major announcement by NORTEL since November of last year.

With all of the new and proposed development there is some concern that the region is running out of land. To help solve this problem, the City of Nepean has rezoned 400 acres along Highway 416 and Strandherd Drive in the Barrhaven community for business park uses. This land still has to be serviced which is expected within the next year. I believe this to be an excellent site for manufacturers that are shipping out of the Ottawa region by trucks.

Canril Corporation has received municipal approvals for a 260,000 sq.ft. development on Innes Road between Cyrvill and Blair Roads in the east end of the region. The development will be anchored by a 140,000 sq.ft. RONA Warehouse which will open in the fall of 2000. An additional 50,000 sq.ft has already been committed with 70,000 sq.ft. still available.

Canadian Tire is to start construction shortly on a 80,000 sq.ft. store in the northeast quadrant of Greenbank Road and Strandherd Drive in the Barrhaven community of Nepean.

Also in Barrhaven, on Greenbank Road, the OMB approved the development of a 68,000 sq.ft. retail plaza by Westeinde Developments. This plaza is to be anchored by a 35,000 sq.ft. grocery store.

BOMA Ottawa has released the first quarter vacancy statistics for office space in the Ottawa region. This survey is prepared by jj Barnicke. The overall vacancy rate is at only 3.5% which is down from 7.6% last year. It was interesting to note that the vacancy rate for Class "A" space in Kanata was at 0.0%. There is not one square foot of space available to lease and there is over 500,000 square feet under construction, the majority of which is already leased. The survey also noted that absorption for the first three months of the year in the Ottawa region was a remarkable 858,682 sq.ft.

The Royal LePage office survey indicated a higher overall vacancy rate at 4.6% not including space for sublet. The lowest vacancy rate was for Class "A" space in the suburbs west market at only 0.5%. This market includes Kanata, Nepean and Ottawa West.

Colliers also released their first quarter results which indicated an overall vacancy rate of 5.3% with the overall rate for Class "A" space in the region at only 2.0%. The Colliers survey noted that "Tenants that need space quickly have to find creative solutions including short term swing space while new construction occurs."

All three surveys were similar in the underlying theme that it is now a landlords market and tenants should not take too long in committing to a lease or the space they are considering will be leased by the time they decide. I know this is sweet music to the ears of many long suffering landlords.

Lastly, and certainly not least, there is now one more alternative for real estate owners looking for mortgage financing. For those of you who don't already know (the Ottawa real estate community is still pretty small, I'm sure everyone does), Allan Jensen has left Manulife Financial to open an Ottawa office for Strategic Mortgage Capital Company. Allan can be reached at 560-0443 or by email at ajensen@stratmor.com. We wish Allan all the best and are sure he will be successful with his new challenge.