Ottawa Office First Quarter 2012

CBRE Limited

Global Research and Consulting Ottawa Office www.cbre.ca/research First Quarter 2012

The vacancy rate in the Ottawa office After three consecutive quarters of market decreased by 20 basis points decreasing vacancy, the West market’s (bps) in the first quarter of 2012 to vacancy rate increased by 40 bps to 6.7%. Ottawa’s vacancy rate continues 5.5% in the first quarter. The most to be lower than the national average significantly impacted node in the West Quick Stats for office product. market was the Woodward and Carling corridor, which logged nearly 28,939 SF The vacancy rate in the Central Business of negative absorption. Change from last District (CBD) rose 20 bps to 5.6% Current Yr. Qtr. compared to the fourth quarter of 2011. The fourth quarter of 2011 saw the Export Development Canada’s (EDC) vacancy rate decline in the South Vacancy 6.7 % move remains the hot topic in the market, however, the vacancy rate Lease Rates $16.54 psf downtown as one of its buildings at 234 increased once again in the first quarter Net Absorption 83,381 SF Laurier Avenue is slated for a full retrofit. by 120 bps to 9.1%. This can be Construction 602,750 SF Upon completion, 234 Laurier Avenue attributed to newly marketed and

*The arrows are trend indicators over the will offer nearly 340,000 SF of renovated space at 1145 Hunt Club specified time period and do not represent a positive or negative value. (e.g., absorption competitive office space to the Road, one of GE Real Estate’s Ottawa could be negative, but still represent a positive trend over a specified period.) downtown core. In addition to the assets. retrofit, Morguard’s new build at 150 The historically tight East market had Elgin Street is underway, which will nearly 42,000 SF of office space come Hot Topics intensify competition amongst downtown to the market last quarter and since landlords when it is completed. • EDC’s move is still expected to cause then, leasing activity has been slow. some changes in the office market Ottawa’s suburban market recorded a There was only 1,472 SF of positive net landscape. 50 bps decrease in the vacancy rate and absorption this quarter. The vacancy currently sits at 7.7%. This is the fourth rate dropped by 10 bps to 3.9%, but • Kanata recorded a consistent first consecutive quarter of decreasing could drop modestly next quarter as the quarter of activity. vacancy rates in the suburban office market absorbs the newly available market. space. • New leasing opportunities came to Kanata played home to most of the On the investment front, the sale of 150 the market in the south end. suburban office transactions, which Slater Street, EDC’s new headquarters, helped to further the stabilization of this closed between Broccolini and Manulife market. Some of the leasing activity in Financial. The 18-storey Class A asset this submarket included Computer sold for $165.5 million. It will be home Sciences Corp’s 26,700 SF lease and to EDC on a long-term lease, which will Check Point Software’s 15,000 SF lease expire in 2031. In other investment at 555 Legget Drive. In the Gateway news, the Chambers Office Complex Business Park at 320 March Road, EION underwent a $96.0 million leasehold renewed 7,120 SF of office space. interest transaction between The Former Nortel tenants Ciena and Chambers Equities and Allied Properties Genband continue their search for new REIT. locations.

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1Q12 994 151 351 218 393 994 1,145 1,956 3,100 Ottawa Ontario Canada SF (000s) SF Total Vacant Total OttawaRate Vacancy Avg. Rental RateRentalAvg. (psf)

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MarketView Ottawa Office

Top Lease Transactions Average Asking Lease Rate Size (SF) Tenant Address Rate determined by multiplying the asking net lease rate for each building by its available 30,000 Electric Warfare Associates Canada Ltd. 1223 Michael Street space, summing the products, then dividing by the sum of the available space with net leases 26,700 Computer Sciences Corporation* 555 Legget Drive for all buildings in the summary. Net Leases 15,102 Check Point Software Technologies Ltd.* 555 Legget Drive Includes all lease types whereby the tenant pays an agreed rent plus most, or all, of the 7,119 EION Inc.* 320 March Road operating expenses and taxes for the property, including utilities, insurance and/or *Renewal maintenance expenses.

Market Coverage Includes all competitive office buildings 20,000 square feet and greater in size. Net Absorption The change in occupied square feet from one period to the next. Net Rentable Area The gross building square footage minus the Submarket Map elevator core, flues, pipe shafts, vertical ducts, balconies, and stairwell areas. Occupied Square Feet Building area not considered vacant. Under Construction Buildings which have begun construction as evidenced by site excavation or foundation work. Available Square Feet Available Building Area which is either physically vacant or occupied. Availability Rate Available Square Feet divided by the Net Rentable Area. Vacant Square Feet Existing Building Area which is physically vacant or immediately available. Vacancy Rate Vacant Building Feet divided by the Net Rentable Area. Normalization Due to a reclassification of the market, the base, number and square footage of buildings of previous quarters have been adjusted to match the current base. Availability and Vacancy figures for those buildings have been adjusted in previous quarters.

For more information regarding this MarketView, please contact: Brandon Yuck, Sales Trainee CBRE Limited 333 Preston Street, 7th Floor

This disclaimer shall apply to CBRE Limited, Real Estate Brokerage, and to all other divisions of the Corporation (“CBRE”). The information set out herein (the “Information”) Preston Square Tower 1 has not been verified by CBRE, and CBRE does not represent, warrant or guarantee the accuracy, correctness and completeness of the Information. CBRE does not accept or Ottawa, ON, K1S5N4 assume any responsibility or liability, direct or consequential, for the Information or the recipient’s reliance upon the Information. The recipient of the Information should take such steps as the recipient may deem necessary to verify the Information prior to placing any reliance upon the Information. The Information may change and any T. 613 782 2266 F. 613 782 2296 property described in the Information may be withdrawn from the market at any time without notice or obligation to the recipient from CBRE. [email protected]