Ottawa remains ‘core’ office market for Crown Realty Partners, T.O.-based firm’s executives say

Crown Realty Partners says Ottawa remains one of its “core markets” even as the company is poised to sell two of its largest office properties in the region.

In an email exchange with OBJ this week, Crown Realty managing partner of investments Emily Hanna said a big part of the National Capital Region’s appeal to investors is its stable economy underpinned by the federal government. 

But Ottawa’s attractiveness as a real estate market “goes beyond” its reputation as a safe harbour in times of economic uncertainty, she added.

“The city has a highly educated workforce, a growing population of skilled newcomers, and a strong base of tenants in the tech, professional services, and FIRE (finance, insurance and real estate) sectors,” Hanna explained.

“Ottawa continues to be one of our core markets, together with the (Greater Toronto Area),” she said, adding the firm’s team of 52 local employees is focused “on managing and repositioning well-located, high-quality office properties to a high standard to ensure they outperform in any phase of the market cycle.”

Founded in 2001, Crown Realty built a significant portfolio in the GTA before expanding into the National Capital Region with its $56.5-million acquisition of the Carling Executive Centre in 2019.

The company went on to buy a number of other high-profile office complexes in Ottawa, grabbing headlines with deals such as its 2021 purchase of a 50 per cent stake in Place de Ville for $175 million – one of the biggest real estate transactions in the city’s history. 

Crown Realty now owns or manages 3.4 million square feet of commercial real estate in Ottawa, including other marquee assets such as the four-building Park of Commerce in Gloucester and a two-tower complex on Riverside Drive formerly owned by IBM.

Like the Carling Executive Centre, those buildings are located in the suburbs, where office occupancy has been quicker to bounce back after the pandemic. Real estate experts say tenants have been gravitating toward properties outside the core because those properties are more likely to have perks such as free parking and are generally located closer to where employees live.

Hanna said Ottawa’s suburban submarkets have “historically delivered strong performance, something we’ve seen firsthand through consistent leasing activity across our portfolio. 

“We continue to believe there’s a compelling thesis for well-located, high-quality assets that support the needs of businesses hiring top-tier knowledge workers,” she added.

Selling suburban assets

At the same time, however, the company is now preparing to downsize its suburban office portfolio.

Crown put the Carling Executive Centre up for sale in late 2023 after overhauling the property management team and pouring more than $2 million into upgrading the three-building complex with amenities such as a fitness facility and a restaurant. 

The property’s vacancy rate subsequently fell from about 25 per cent to seven per cent. Hannah said the makeover allowed Crown “to lease up vacancies and secure cash flow and increase income,” making the asset more attractive to potential buyers.

Graeme Webster, principal at Avison Young’s capital markets group in Ottawa, told OBJ in March the buildings on Carling Avenue have been “conditionally sold” to a local investor group. Asked for an update, Hanna said this week the deal is still not finalized, adding she is “not at liberty to disclose any details of the transaction.”

Hanna said selling the property was always the company’s long-term goal. The Carling Executive Centre was acquired on behalf of Crown’s fourth value-add fund, which was established in 2017 and raised more than $234 million in capital with the aim of acquiring assets, upgrading them and eventually reselling them at a premium.

“The purpose of that fund is to create returns for our investors by repositioning properties,” Hanna explained. “Once the property is stabilised, our objective has been achieved and we recycle capital.”

Earlier this spring, Crown put a second asset – the two-tower property on Riverside Drive it purchased from IBM for $49 million in late 2021 – on the market. Hanna said the company remains focused “on creating value for our investors” by divesting assets it believes will fetch a strong return.

“This is our process, regardless of the phase in the cycle,” she said.

Still keen on capital region

Scott Watson, Crown’s managing partner of leasing and acquisitions, agreed the firm remains bullish on the National Capital Region as a commercial real estate market.

“We believe in the future of well-located, high-quality offices, especially in core Canadian markets like Ottawa and the GTA,” Watson said in an email. “We believe that those that are managed to a high standard will perform better in any phase of the market cycle.”

Crown Realty is not the only high-profile real estate organization that’s sensing a resurgence in investors’ appetite for office properties in suburban Ottawa as 2025 rolls on.

In its mid-year outlook report released Wednesday, Avison Young noted that office transaction volumes in the city’s suburbs have been “higher than expected” so far this year following a sluggish 2024 in which office sales accounted for just two of the city’s top 10 deals.

“Investors are drawn to the city’s stable fundamentals, manageable risk profile and long-term growth potential,” Joe Almeida, the firm’s managing director for Ontario, wrote in the report, adding the uptick in activity during a time of “broader economic uncertainty” suggests “growing confidence in Ottawa’s resilience” as an investment hub.

“With a stable government-driven economy, manageable supply levels, and a supportive policy outlook, Ottawa is well-positioned to maintain its steady performance through the second half of 2025.”