A few metres from the front door of Ottawa’s newest rental apartment building Frontier, trains glide by along Ottawa’s soon-to-be-opened LRT. An excavation next door, complete with dozens of bore holes for a geothermal heating/cooling system, heralds the imminent arrival of Phase 2 of the project.

Frontier’s floor-to-ceiling glass windows offer views of the adjacent Scotiabank Theatre Ottawa entertainment complex and Gloucester Centre mall, the huge CSIS federal government security agency complex across the road, green spaces and the distant Gatineau hills.

Frontier is a textbook example of a modern transit-oriented development, and the presidents of co-developers RioCan REIT (REI-UN-T) and Killam Apartment REIT (KMP-UN-T) were on hand last week to mark the beginning of occupancy at the 23-storey rental apartment tower.

The first building to be constructed on the east-end site, it contains 228 apartments ranging from bachelors to two-bedrooms, with about 60 per cent now leased.

First new rental in Gloucester area

“We weren’t 100 per cent certain of how it would be received In the market,” RioCan president and COO Jonathan Gitlin told RENX. “We knew a couple of things, though. We knew it was next to transit and we knew there was no other rental in that area.

“We knew there was a fairly sizable CSIS office nearby and we knew that it was aligned perfectly with the retail that we have next door. That’s a great amenity.

“We thought that all of the ingredients were there, but because there were no other bona fide rental projects in the area, we weren’t certain exactly how the market would respond to the offering. Based on the results to date, we are very pleased with where we are in the process.”

Frontier is one of the first major multi-residential projects for RioCan, which is undertaking a major development/redevelopment plan which will eventually include intensification at dozens of its retail properties across Canada.

For Killam, Frontier is another in a long line of such developments. President and CEO Philip Fraser said the partnership, construction and lease-up has been “extremely smooth.”

“This will be one of our better construction development projects; almost everything is done by the time we open the doors for tenants,” Fraser said. “We think in terms of lease-up we should be done well within the 12 months, which is extremely good for buildings of this size. Basically as soon as we finish it, we’ll be working on pre-leasing for Phase 2.”

The second building, being constructed just west of the first tower, will be slightly smaller at 20 storeys and 208 units. At full build-out, the property is expected to comprise five towers and up to 840 units — all rentals.

Leasing “better than we expected”

“The velocity of leasing has been better than we expected, the leasing rates have been better than expected, and moreover the general feedback we’ve received from local residents has been very positive,” Gitlin said. Units are currently renting from $1,495 to $2,530 per month, and range in size from 548 to 970 square feet.

Those rates are likely to increase for future buildings, with Ottawa’s apartment vacancy running at just 1.5 per cent, according to CMHC’s 2018 data. Rentals.ca predicts rents in Ottawa could jump by nine per cent this year.

Frontier’s tenants are “a real cross-section of Eastern Ottawa,” Gitlin said. “We are getting not only the younger demographic . . . younger professionals who are moving into their first residence outside of their parents’ homes. We are also getting some of those same parents who are looking to downsize from their single-family home.

“We are also getting residents of some of the older stock of rental units in the Gloucester area who like the dynamic buildings that we are offering: the new amenities, the open concept unit plans, the higher ceiling heights, things that can’t be offered in the older buildings.”

It contains virtually all the amenities expected of a purpose-built rental . . . from ground-floor fitness centre with a yoga room to a TV lounge and serving bar, party room with kitchen, outdoor terraces, a BBQ area and a spacious lobby.

Amenities and features of Frontier

Designed by Ottawa’s Hobin Architecture with interiors by U31, and built by Doran Contractors Ltd., Frontier is fitted with stainless steel appliances, custom-designed kitchens, vanity cabinetry and large balconies. There’s even an airy, corner unit guest room available for rent by residents to accommodate overnight guests.

Until Ottawa’s LRT is up and running, there is a city bus transit hub a short walk away. Once the trains are operational, residents will be whisked downtown in under 10 minutes.

“It embodies exactly what the municipality was looking for when it created the LRT system,” Gitlin said. “It’s a project right next to the Blair Street station, it’s literally a hop, skip and jump away from it.

“You’ve got this great access point that will get you into downtown Ottawa in a matter of minutes. So I think it is exactly what a transit-oriented development should be.”

Geothermal heating, cooling system

On the mechanical side, Frontier features a geothermal system designed to provide most of the heating and cooling needs of the building. The system has two enormous benefits.

The system, purchased from Winnipeg’s Geo-Xergy Systems Inc., is forecast to save more than 100 tons of CO2 emissions annually, more than 600,000 gallons of water and 210,000 kWh of electricity. To install it, 70 holes a couple of inches in diameter were drilled into the ground to a depth of 600 feet.

“The attraction for us is twofold,” Fraser said. “Geothermal, out of the gate, it takes away an operating cost that is fairly significant in the scope of everything that we do.

“There is (also) no pressure for growth on that, whereas the cost of gas, the cost of oil, even though it is relatively low now it can trend up fairly quickly. It’s basically improving the margin.

“And in today’s world, it’s carbon-free, it is so good relative to your ESG (environmental, social and governance), which is becoming more and more important. From a pure sustainability issue, it is the best way to go.”

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