Newmark Knight Frank Devencore

Newmark Knight Frank Devencore

November 04, 2009 07:00 ET

Greater Ottawa Corporate Office Markets Showing Stability

Vacancy Rate Jumps Throughout Canada's Other Major Cities

OTTAWA, ONTARIO--(Marketwire - Nov. 4, 2009) - In its Real Estate Market Study published today, Newmark Knight Frank Devencore reported that vacancy rates in downtown Ottawa and Gatineau remained at or near record lows through the first half of 2009, despite the economic turbulence that swept the globe. However, space availability continued to rise sharply in the Kanata/Ottawa West submarket.

Combined occupancy rates in downtown Ottawa's Class "A" and Class "B" office buildings continue to track above 98%. At present, only 271,000 square feet is available for lease or sublet. The situation is similar in the Gatineau region, where the office space vacancy rate is running at approximately 2%.

Conversely, the Kanata/Ottawa West region has been extremely hard hit by the recession and vacancy rates have nearly tripled over the past two years. At present, 900,000 square feet is vacant, representing 19.1% of the existing inventory. However, while consolidation is continuing to take place in Kanata, sublet availability is decreasing and there is a sense that the market may be slowly recovering.

"With vacancy rates at or near record lows in downtown Ottawa, any tenants seeking to locate or expand here will have their work cut out for them," said Marc Shank, Vice-President and General Manager, Devencore Real Estate Services Ltd. "On the upside, demand for large blocks of space in the downtown core is relatively modest, so there isn't a lot of upward pressure on rents. As has been the case for some time, landlords will continue working to secure long-term deals with tenants that have strong covenants. In Kanata/Ottawa West, we should begin to see the market stabilizing. As we slowly emerge from the recession the amount of available sublease space has decreased and we anticipate positive space absorption in the coming year. This is an excellent time for tenants and their advisors to examine the multitude of opportunities in the area."

In Canada's other major urban centres vacancy rates rose significantly in the first half of 2009. Some cities have been more dramatically and immediately impacted than others; the sharpest increases in office space availability occurred in Vancouver and Calgary, mirroring the precipitous weakening of demand in the resource sectors. Until the recession hit the office market in most of the country was weighted in favour of landlords, but the jump in vacancy rates should loosen up the markets in most major cities and offer more options to those tenants who have been seeking new leasing arrangements.

About Newmark Knight Frank Devencore

Devencore is the Canadian partner of Newmark Knight Frank, one of the largest independent real estate service firms in the world. Newmark Knight Frank Devencore is Canada's largest corporate real estate advisor and brokerage exclusively representing corporate, industrial and retail space users. With offices across the country, Newmark Knight Frank Devencore offers its global clientele comprehensive services that are individually designed to ensure executive real estate decisions are supported by effective strategies and professional execution.

Headquartered in New York, Newmark Knight Frank and London-based partner Knight Frank operate from over 200 offices in established and emerging property markets on six continents. Last year, transactions were valued at more than $32 billion with annual revenues of over $811 million. With a combined staff of more than 6,300, this major force in real estate is meeting local and global needs.

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Contact Information

  • Newmark Knight Frank Devencore
    Marc Shank, C.App., AACI
    Vice-President and General Manager, Broker of Record
    Devencore Real Estate Services Ltd., Brokerage
    613-235-1330, ext. 222
    Newmark Knight Frank Devencore
    Sylvie Bachand
    Director, Marketing and Communications
    Devencore Ltd., Chartered Real Estate Broker
    514-392-1330, ext. 225