- What The federal government acquired a Class-A office complex in downtown Ottawa
- Why The government expects to save $67m by owning the property rather than leasing
- What next One of the buildings is being renovated into “swing” office space
The Canadian federal government acquired a Class-A office complex in downtown Ottawa for $51m, Green Street News can reveal.
Public Services and Procurement Canada closed on 40 and 46 Elgin Street, collectively known as the Chambers Complex, on Dec. 18. PSPC has leased space in one of the buildings for over 25 years and expects to save taxpayers approximately $67m by owning the property, rather than continuing to lease it long term.
The seller was Allied Properties REIT. Allied acquired the buildings in 2011, along with two office properties in Calgary.
The acquisition consists of a six-storey heritage building, built in the late 1800s, and a 14-storey office tower, built in 1994. Both buildings are fully leased and situated in the Ottawa Central Business District, less than 1 km to Parliament Hill and the National Arts Centre.
46 Elgin Street, known as the Central Chambers Building, spans approximately 30,000 sq ft, with 1,800 sq ft dedicated to retail and the rest to office. 40 Elgin Street, called the Chambers Building, has just over 201,000 sq ft of space, with 5,500 sq ft for retail and the rest for office.
Since 1998, Public Services and Procurement Canada has leased space in the Chambers Building as long-term administrative office space for the Senate of Canada. The building is now being renovated to be used as “swing” office space and long-term office space for members of the Senate.
Ottawa’s Central Business District submarket continues to see an elevated level of vacancy.
A recent CBRE report said the district’s office vacancy rate increased by 80 bps quarter over quarter in Q4 2024, from 13.1% to 13.9%, which corresponds to a negative net absorption of 121,000 sq ft in the quarter.
The vacancy rate for Class-A buildings increased by 90 bps, from 11.6% to 12.5%. The report said a negative net absorption of 97,000 sq ft was recorded.
