Ottawa's Bay building sold for $65 a foot. Rent is $53.

The number that should stop you

In June the former Hudson's Bay flagship at 59 to 95 Rideau Street sold. Five storeys, 332,000 square feet, physically attached to CF Rideau Centre by a skywalk, sitting on what is arguably the most walked-past corner in the National Capital Region.

Price: $21.5 million. That is $65 per square foot.

Hold that against another number from the same report. Cushman & Wakefield puts the weighted average gross asking rent for retail in Ottawa's downtown core at $53.22 per square foot per year.

The entire building traded for roughly fifteen months of what a tenant would pay to rent that same square footage downtown.

What $65 a foot is actually telling you

The buyer is a numbered company, 2808771 Ontario Ltd, tied to Claridge Homes. Claridge builds condos. No redevelopment plan has been announced and I will not pretend to know what they will do with it.

I do know what $65 a foot means. It means nobody in that process underwrote the building as retail. At $65 a foot you are buying land, air rights and a corner. You are not buying an income stream. If a single buyer had believed there was a tenant out there willing to pay downtown rents for a 332,000 square foot box, the price would have started with a two or a three.

The seller was the Ontario Superior Court of Justice. This was a receivership sale, run by CBRE for court-appointed FTI Consulting after the RioCan and HBC joint venture went under. Court-supervised sales are not panic sales, but they price to the bid that exists rather than the bid you wish existed. The bid that existed was a condo builder.

Meanwhile, Ottawa retail is basically full

Read only the headline vacancy number and you would conclude the opposite of everything above.

Ottawa's overall retail vacancy rate in the first half of 2026 was 4.5 per cent, down 40 basis points from 4.9 per cent in the second half of 2025. It improved. Tracked inventory is 26.1 million square feet across 284 buildings and net absorption was positive 96,522 square feet.

Break it out by submarket and it gets extreme:

• Orleans: 0.1 per cent vacancy
• Ottawa South: 0.1 per cent
• Kanata and Stittsville: 0.5 per cent
• Ottawa West and Westboro: 0.6 per cent
• Bell's Corners: 1.3 per cent
• Nepean and Barrhaven: 1.4 per cent

Those are not soft markets. Those are the numbers you get when there is nothing to lease. Anyone hunting 2,000 square feet on a decent suburban strip already knows it.

Small space leases. Big boxes sit.

The only vacancy figures in the whole report that look bad are regional malls at 9.5 per cent and Gloucester at 11.1 per cent. Downtown core is 5.1 per cent. Everything else is under 2 per cent.

Regional malls and larger power centres hold 9.8 million square feet across 15 buildings, averaging roughly 654,000 square feet each. Neighbourhood malls hold 7.6 million square feet across 212 buildings, about 35,600 square feet each, and sit at 1.4 per cent vacancy, unmoved in six months.

The bigger the box, the harder it is to fill. That is the story, and it has been the story since Target left.

The former Nordstrom space across the street is a useful control. Roughly 157,000 square feet, empty since mid-2023. In the first half of this year the third floor of it finally leased, and that one deal was a meaningful share of the 94,430 square feet of positive absorption CF Rideau Centre posted in H1. Three years, and they filled part of it by cutting it up.

The question I cannot answer from the outside

Worth being honest here. I do not know whether the Bay building sits inside Cushman & Wakefield's 26.1 million square foot inventory.

The sales table files it under the Lowertown and Sandy Hill submarket. There is no Lowertown and Sandy Hill line in the vacancy table. The downtown core line covers 735,572 square feet across 19 buildings, which is barely more than twice the size of the Bay building on its own.

If a 332,000 square foot empty box is in the count, it is roughly 28 per cent of every vacant retail square foot in Ottawa and the citywide 4.5 per cent is carrying it. If it is out of the count, reclassified as a redevelopment site rather than leasable retail, then part of the reason vacancy improved is that the worst space stopped being counted.

I cannot tell which from the published report and I am not going to guess. It is the right question to ask any broker who quotes you a vacancy rate on any asset class. Ask what is in the denominator.

Three practical reads

Small is a landlord's market and big is a tenant's market. Under 5,000 square feet in a suburban plaza you have almost no leverage. Over 50,000 square feet anywhere in this city you have all of it. The inducement math scales with square footage and it scales fast.

Asking rents rose. That is not the same as deals rising. Overall gross asking hit $44.73 in H1 and downtown held at $53.22. Asking is asking. The same spread between asking and net effective I laid out for office leases applies to retail, and it is widest on the big spaces.

If you are buying, price the use you can actually get approved. Someone just bought the best retail address in the city at land value because retail was not the highest use. That logic runs the other way too. A suburban strip at 0.1 per cent vacancy with a below-market rent roll is worth more than its current income says, which is the same scarcity argument as small-bay industrial.

The case against my read

Fair counterargument: downtown is improving and I am being gloomy about it.

Downtown core vacancy fell from 6.2 to 5.1 per cent. Downtown asking rent is the highest in the city at $53.22, above regional malls at $50.27. CF Rideau Centre put up 94,430 square feet of positive absorption with Victoria's Secret and others opening. Ottawa's unemployment rate fell to 6.1 per cent in May. Cushman's own commentary says the prospect of redevelopment on the Bay site has ByWard Market businesses more optimistic, not less.

All of that is true and I would not bet against downtown Ottawa over ten years. But National Capital Region population growth is running at negative 1.0 per cent and GDP at negative 0.4 per cent. Optimism about a redevelopment nobody has filed yet is not a leasing plan. The $65 is a fact. Everything else is a forecast.

Before you sign anything

The gap between what a market report says and what your space is actually worth is where the money is won or lost. If you are sizing a retail unit, renewing a lease, or underwriting a commercial building in Ottawa, call me before you sign, not after. 613-262-6545 or fil@613realtor.ca. Bring the actual offer, not the summary of it. If you want to see what is out there first, start with the listings.