High interest rates in the Ottawa National Capital Region, are causing a headwind in real estate investment activity

After a nearly 40% drop in investment volume from 2019 to 2020, Ottawa's commercial real estate market has since rebounded to reach record levels in 2021 and 2022. Development site sales even had their best ever performance during 2022.

  • While economic uncertainty during the pandemic has pushed investors to redirect their capital to more COVID resilient options, namely multifamily and industrial properties, office sales are making a comeback. As we approach the end of Q4 2023, year-to-date sales volumes for the office market ($324.3 M) have exceeded that of industrial properties ($219.6 M) but remain below multifamily assets ($444.4M).
  • Total investment year-to-date stands at $1.2 Billion, representing only 49% of the volume achieved in 2022. High interest rates have caused significant headwinds in the real estate investment market in 2023.
  • Debt has become more difficult to source, forcing buyer and sellers to open the creativity toolbox in order to complete transactions for certain asset classes.  Activity is however expected to rebound next year, when Bank of Canada decides to start easing interest rates.

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