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According to a recent report, downtown Ottawa is currently experiencing the highest office building vacancy rates ever recorded. CBRE, a commercial real estate company, has been tracking real estate usage in Canada since 1996. In their latest report, CBRE noted that the vacancy rate in downtown Ottawa increased from 13.2 percent in the previous financial quarter to 15.1 percent, marking a historic high for the city. Louis Karam, the managing director of CBRE Ottawa, pointed out that while this record is significant, it may not necessarily be a cause for concern.
Karam mentioned that businesses in Ottawa still have higher occupancy rates compared to many other major Canadian cities. The report also indicated that Ottawa's vacancy rate is lower than the national average of 18.9 percent and is trailing behind Toronto with a rate of 15.8 percent and Calgary with a rate of 31.5 percent.
Nationally, the report attributed the downsizing of downtown offices and commercial spaces by businesses to a combination of recent economic shifts. In the case of Ottawa, there are unique challenges impacting its downtown commercial real estate market. Public Services and Procurement Canada (PSPC), responsible for managing real estate for the federal government and its agencies, stands as the largest commercial tenant in the city.
The government has unveiled a 10-year plan, prompted by the rise of hybrid work models, aiming to achieve a 50 percent reduction in office space through the Federal public works department. This effort is designed to lower rental costs and generate income by selling existing properties. However, these reductions are expected to occur gradually, and the plan anticipates a recovery in the technology sector during this time frame.
Public Services and Procurement Canada (PSPC) is a federal government department in Canada responsible for a wide range of services and functions related to public administration, government operations, and procurement. PSPC's key responsibilities include managing government real estate, providing procurement and purchasing services, overseeing government telecommunications and IT infrastructure, and managing various administrative and financial services for federal government departments and agencies. Essentially, PSPC plays a crucial role in supporting the effective functioning of the Canadian government by handling essential logistical and administrative functions.
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