Ottawa lease rates remained high in the second quarter of 2024 as vacancy remained tight, according to a new Avison Young report.

Long-term tenants are seeing dramatic rent increases, sometimes as much as 100%, while trying to renew five- and 10-year leases.

“This is a significant hike considering rent increases have historically been in the 3% to 4% range,” said Avison Young,

But, on the whole, rental-rate increases are less drastic than in recent quarters.

Tenant inducements have become scarce. Only a few months of free rent are being offered, depending on the lease term. Meanwhile, tenant improvement allowances are “just as rare” as they hover between $2 per square foot and $5 psf.

With rents high in comparisons to sale prices, the pool of potential owner-user buyers is vibrant, and buildings up to 10,000 sf are “very popular.”

But most buildings in that size range were built between the late 1970s and early 1990s and lack modern features.

Vacancy inched up 60 basis points in the second quarter to 2.3%.

Avison Young’s reporting team was led by Michael Church, who remains a principal of the company after resigning recently as managing director of the firm’s Ottawa office.

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