Ottawa’s skyline will undergo a radical change during the coming decade. Leading the transformation will be Colonnade BridgePort, a home-grown firm which is already one of the city’s most prominent developers.
Colonnade BridgePort has a $2-billion multiresidential and mixed-use development pipeline of 14 towers at five properties across the city. Under their current configurations, the towers would range from 12 to 40 storeys, provide over 3,400 housing units and comprise 3.3 million square feet of gross floor area.
Company CEO Hugh Gorman has a long history in the Ottawa real estate and development industry. He offered a succinct reply when asked if there were 14 towers in Ottawa’s entire development pipeline – all projects, by all developers – a decade ago.
“No is the short answer,” Gorman told RENX.
But times have changed. Canada’s population is rising rapidly and despite recent economic uncertainty, there is a major push to build housing. Lots of housing. Fast.
Colonnade BridgePort’s infill strategy
Gorman and Colonnade BridgePort will be front and centre in Ottawa, pushing an infill high-rise strategy which focuses on areas with good transit, amenities and infrastructure.
It’s a strategy the firm knows well from previous rental developments in the Hintonburg and Westboro neighbourhoods, two rapidly gentrifying, traditionally single-family districts west of the downtown.
“Our view was that we wanted to find infill . . . inside the greenbelt, transit-oriented sites that were in amenity-rich communities that had infrastructure in place,” Gorman explained.
“You think about all the things you can walk to, shops and services, employment in those nodes, and really amenity-rich communities, good schools and all that sort of stuff.”
The earliest iterations of that strategy led to multifamily rental projects along Scott and Carruthers streets in those western neighbourhoods. Both have been successes, crystallizing the strategy for Colonnade BridgePort.
“We felt there was really a gap along transit in those urban infill locations, so that is really where we started, and we started acquiring sites. So we completed the project at 1960 Scott, we completed the project at 175 Carruthers and we started acquiring lands.”
As mainly transit-oriented development properties, the land acquisitions are in nodes which have easy access to downtown Ottawa, but are not in the core.
Colonnade BridgePort is not alone
Its two largest planned developments (up to five towers apiece) are along City Park Drive and at Pickering Place, both along the Highway 417 corridor just east of the downtown.
City Park is adjacent to a large shopping centre while Pickering Place is beside the city’s VIA Rail station.
Both have easy access to Ottawa’s LRT.
“There is such a supply-demand imbalance in the Ottawa market generally that one of the benefits of being outside the core, particularly at locations like City Park and Pickering, is that there is the opportunity for scale,” Colonnade BridgePort managing partner Andrew Blair said.
“When the estimated shortfall in Ottawa for units is about 2,500 per year for the next decade or so, there are real benefits to being able to develop at scale and respond to the demand in the market.”
Colonnade BridgePort is far from alone with developments in Ottawa.
Gorman cited residential projects underway or planned west of the core by several major owners and developers including Choice Properties REIT, RioCan REIT, GWL Realty Advisors, Brigil and others, “all within our little node.
“We are still seeing 10 to 12 per cent rental increases per year with thousands of new units being added just in a two-year span. It’s incredible just how the significant the demand is.”
Kicking off projects in 2024
While Colonnade BridgePort isn’t “pushing dirt” at the moment, that’s about to change. It hopes to begin constructing at least two sites in 2024, including a 12-storey rental tower at 100 Argyle Ave., and Phase 1 of the five-tower, mixed-use project at 25 Pickering Pl.
The Pickering Place site is the company’s largest in the city in terms of floor area comprising 1.2 million square feet.
Gorman is also pressing hard to start a third project, a 22-storey rental tower at 1950 Scott St. which is to contain 220 apartments, by the end of 2024.
“We’re pushing on a project on Scott Street which we are hopeful we can make by the end of 2024, but it is a tight timeline to get into the ground on that one,” he said. “The other projects we have we haven’t advanced as far down the path on those projects.
“So they will probably not be coming out of the ground until 2025.”
Those projects are a two-tower purpose-built rental at 2026 Scott St., and the multi-phased 2000 City Park Dr., which is to contain five towers of up to 30 storeys. The City Park site would comprise a million square feet of gross floor area and approximately 1,200 housing units.
The two Scott Street sites are separate properties, but Colonnade BridgePort will develop them as one project.
“It is two different parcels of land but we consider it one. It’s the same ownership group,” Gorman said.
“2026, the east tower, is what we are targeting to get out of the ground first but we are running 1950 (Scott) in parallel to see if we can get that one either going simultaneously or, alternatively, depending on the capital stack and how our partnership is put together, that one might end up going first.
“So they are very late 2024.”
Financing the development pipeline
To accomplish all this, Colonnade BridgePort has built a network of partnerships with firms such as Fiera (a long-standing partner now involved at Pickering Place) and has created a private equity fund which acquired the City Park development site.
Blair said financial markets remain a challenge, but capital is available for companies with good reputations and solid development plans.
“The financial markets are the challenge, in at least two or three ways,” he explained. “People are of course nervous about interest rates, which can affect a whole variety of factors including construction costs and the cost of debt. The availability of equity capital is being affected.
“I don’t think either Hugh or I would tell you it’s an entirely straightforward process to have investors come in on a large project right now. That is more challenging than it has been in the past.
“Having said that, there is a lot of capital, there is capital that continues to build up. Even though people have been on pause and people are being very cautious, that is going to have to come to an end in the foreseeable future.”
Colonnade BridgePort’s strategy is to be at the front of that curve, and Gorman is convinced Ottawa multiresidential remains a good investment.
“The fundamentals in the market here for investment of capital are extremely strong. I want to keep getting that message out because it’s critically important,” Gorman said.
“I do feel like we are always having to sell the market a bit to capital. I still think it’s a bit of a diamond in the rough in a sense that people know about it, but they don’t really know about it. Once you dig into it, the fundamentals in the market are very strong.
“We don’t think the supply is going to outstrip demand at all. On the contrary.”