INNOVATIVE LAND LEASE ARRANGEMENT

National Capital Business Park is approximately 99 acres of industrially zoned land located at Highway 417 and Hunt Club Road in Ottawa, Ontario on lands in partnership with the federal government’s National Capital Commission (NCC).

 

OPPORTUNITY AND CHALLENGES

Looking to capitalize on an underutilized surplus land holding, Avenue 31 proposed a structured land lease to the NCC, whereby both parties would participate in land rents generated from the development of a new master planned business park on the NCC lands. Under the agreement, Avenue 31 acts as the master developer responsible for obtaining municipal, provincial, and federal approvals for the project and the funding of capital costs. The 99-year land lease transaction will provide long-term rental income to the NCC, diversifying its income streams and contributing to its operational mandate of “ensuring that Canada’s Capital is a dynamic and inspiring source of pride for all Canadians, and a legacy for generations to come.”

 

SOLUTIONS AND OUTCOMES

The ground lease was executed in Q1 of 2020, and the master plan was approved by the federal government in Q4 of the same year. The innovative master plan includes forward-thinking urban design standards, sustainability initiatives, and low-impact development practices, and will offer more than 1.3 million ft2 of state-of-the-art industrial space upon its completion in the next three to five years. The prestigious industrial park is expected to attract national and international firms that want to take advantage of its high visibility and “last mile” locational attributes. Construction of the park’s infrastructure and first building commenced in Q2 2021.

“As steward of the capital, the National Capital Commission is pleased to work with Avenue 31 on the development of the National Capital Business Park. This long-term land lease allows us to optimize our land and contribute significantly to the region’s economic development.”

Bill Leonard, Executive Director of Real Estate, National Capital Commission

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