Ottawa commercial real estate investment is feeling the effects of a sharp downswing, a new Altus report shows.

Total investment fell 44% year-over-year in the second quarter, with total dollar volume decreasing to $616 million.

But, despite its setbacks, Ottawa is the most preferred investment market across all asset classes after surpassing Toronto in the second quarter, said the Toronto-based analytics company.

“Buyers and sellers continued to navigate through a price-discovery phase as aggressive interest-rate hikes persisted to rein in inflation,” said Altus in the report.

The office sector was the only asset class that achieved investment growth, mainly due to H&R Reit completing its $277-million sale of 160 Elgin Street to Groupe Mach.

The office availability rate increased to 14.4% from 11.2% in the second quarter of 2022. Sublease space continues to climb, with one million square feet now in the market.

Industrial investment declined 25% to $56 million. But the decrease was minimal compared to other sectors due to short supply.

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