{"id":464,"date":"2018-08-17T14:30:56","date_gmt":"2018-08-17T14:30:56","guid":{"rendered":"https:\/\/rentals.ca\/blog\/?p=464"},"modified":"2022-04-01T17:46:32","modified_gmt":"2022-04-01T17:46:32","slug":"what-ottawas-new-arena-agreement-means-for-rent-prices","status":"publish","type":"post","link":"https:\/\/rentals.ca\/blog\/what-ottawas-new-arena-agreement-means-for-rent-prices","title":{"rendered":"What Ottawa&#8217;s New Arena Agreement Means For Rent Prices?"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">In January 2018, the National Capital Commission (NCC) announced that it reached<\/span><a href=\"http:\/\/ncc-ccn.gc.ca\/our-projects\/lebreton-flats\"> <span style=\"font-weight: 400;\">an agreement<\/span><\/a><span style=\"font-weight: 400;\"> in principle with RendezVous Lebreton to develop LeBreton flats. \u00a0The deal will see the construction of a new downtown NHL arena surrounded by housing and amenities such as shopping and community centres.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The announcement was well-received by the Ottawa community. \u00a0After all, LeBreton has been an undeveloped yet desirable slice of real estate for decades. \u00a0If all goes according to plan, Ottawa will get a new arena and vibrant 21<\/span><span style=\"font-weight: 400;\">st<\/span><span style=\"font-weight: 400;\"> century living space by 2025.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Since new sports stadiums aren\u2019t common news in Canadian cities, savvy investors are looking into how to capitalize on this deal. \u00a0In this article, we\u2019ll look at the impact Ottawa\u2019s new arena will have on real estate and rent.<\/span><\/p>\n<h2><b>A bit of background<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">LeBreton Flats is a 21 hectare site which used to be a trading hub, and later, an industrial centre. \u00a0The federal government expropriated the area in the 1960\u2019s to build offices however, those plans never materialized and the lot stayed vacant for decades.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Since, several investors and developers tried to develop the land without success. \u00a0Bureaucratic red tape and reaching agreements on who decontaminates the soil scuttled these plans.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The NCC\u2019s recent announcement is a landmark in the area\u2019s history. \u00a0Unlike past in attempts, the NCC has already invested millions into decontaminating part of the site\u2019s soil. \u00a0Additionally, the NCC\u2019s CEO stated that the cost of decontamination will be deducted from the price of the land. \u00a0This suggests some government body will take on the cost instead of the developer, further reducing the chance the deal will fall through.<\/span><\/p>\n<h2><b>What will be built?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">When the NCC announced it reached an agreement, most news outlets focused solely on the new NHL arena. \u00a0However, much more will be built. This is important because as we\u2019ll see below, a sports venue isn\u2019t enough to drive up real estate and rent. \u00a0Supporting entertainment districts, amenities and living areas are necessary.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">As it stands, the<\/span><a href=\"http:\/\/s3.amazonaws.com\/ncc-ccn\/documents\/additional_handout_rlg_final_eng.pdf?mtime=20170420135432\"> <span style=\"font-weight: 400;\">proposal includes<\/span><\/a><span style=\"font-weight: 400;\">:<\/span><\/p>\n<p><span style=\"font-weight: 400;\">&#8211; \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0A cultural and social meeting space with a capacity for 28,000 people<\/span><\/p>\n<p><span style=\"font-weight: 400;\">&#8211; \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0A multi-use sports and recreation centre<\/span><\/p>\n<p><span style=\"font-weight: 400;\">&#8211; \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0A public space featuring a water feature<\/span><\/p>\n<p><span style=\"font-weight: 400;\">&#8211; \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Affordable living and condominiums<\/span><\/p>\n<p><span style=\"font-weight: 400;\">&#8211; \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Shops, cafes and restaurants<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In other words, they will build an entire community centred around the arena.<\/span><\/p>\n<h2><b>An automatic increase in rent prices?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Academic studies looking at the economic impact of arenas show a mixed bag of results. \u00a0\u00a0In some, new arenas barely improve the general economy while in others,<\/span><a href=\"http:\/\/eprints.lse.ac.uk\/25512\/1\/Impact_of_sports_arenas_on_land_values_%28LSERO_version%29.pdf\"> <span style=\"font-weight: 400;\">jobs and real estate go up<\/span><\/a><span style=\"font-weight: 400;\"> while poverty goes down. \u00a0How are investors and landlords supposed to draw conclusions and translate them into wise decisions?<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The problem with North American studies on the subject is that many look at the impact of NFL stadiums. \u00a0NFL teams only play 8 home games a year &#8211; that\u2019s a lot of days the stadium stays empty! In many NFL cities, there is also an existing and diversified market for venues suitable for concerts and conferences. \u00a0This means that for the 350+ days there isn\u2019t an NFL game, the stadium (and surrounding areas) isn\u2019t buzzing with activity. Consequently, residents see no appeal in living in an area and this doesn\u2019t translate to an increase in real estate.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">But what if we were to look at baseball stadiums? \u00a0These are generally placed in the middle of urban areas, used for 80+ home games and create a vibrant community around where they are built. A study compiled by<\/span><a href=\"https:\/\/www.trulia.com\/blog\/trends\/baseball-stadiums-2016\/\"> <span style=\"font-weight: 400;\">Trulia<\/span><\/a><span style=\"font-weight: 400;\"> found that properties near MLB stadiums had home values 15% higher than their greater metro area.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">What\u2019s even more interesting is that the stadiums built in or before 1999 had rents above the median market rate. \u00a0It\u2019s worth noting this last point since those old stadiums are located in cities like Boston (Fenway Park), Chicago (Wrigley Field) and Cincinnati (Great American Ball Park). \u00a0In those cases, the stadiums are located in the middle of dense urban areas and surrounded by restaurants, nightlife and shopping.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The conclusion to draw here is that for any sports infrastructure to have a positive impact on real estate, an ecosystem of entertainment, residential spaces and amenities needs to be present alongside it.<\/span><\/p>\n<h2><b>An NHL case study<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">An interesting case study is Montreal\u2019s Bell Centre, home to the NHL\u2019s Habs. \u00a0This arena is located in the heart of downtown Montreal and surrounded by restaurants, recently-built condo towers and a few steps from the major work centres.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">When there aren\u2019t hockey games, the Bell Centre hosts high-profile concerts. \u00a0There\u2019s always a hustle and bustle in the area and buzz in the air. It\u2019s a desirable spot to live. \u00a0At the time this article was written, renting a 1 bedroom in the Habs Tower (annexed to the Bell Centre) cost at least $1,800 for a 1 Bedroom and $2,500+ for a 2 Bedroom. \u00a0If you consider that the<\/span><a href=\"https:\/\/www.cmhc-schl.gc.ca\/odpub\/esub\/64411\/64411_2017_A01.pdf?fr=1521625359804\"> <span style=\"font-weight: 400;\">average rent<\/span><\/a><span style=\"font-weight: 400;\"> in Montreal is $698 for a <a href=\"https:\/\/rentals.ca\/montreal\/1-bedrooms\">1 Bedroom<\/a> and $782 for a <a href=\"https:\/\/rentals.ca\/montreal\/2-bedrooms\">2 Bedroom<\/a>, that\u2019s a hefty premium to live in the heart of the action.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">When it comes to Ottawa and LeBreton Flats, the new arena will be surrounded by high-rise condos, shopping and community centres similar to the Bell Centre. \u00a0But beware: landlords shouldn\u2019t expect to be able to raise rents to astronomical heights as it\u2019ll take years for the area to develop.<\/span><\/p>\n<h2><b>What about the other areas?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">In our estimate, it\u2019s not just LeBreton that will see a boom in real estate. \u00a0LeBreton is a 4 minute train ride away from Little Italy. The area was already in the middle of rapid gentrification, but the arrival of the Confederation Line will now connect the O-Train and Little Italy to the rest of Ottawa. \u00a0The neighborhood is already home to great restaurants, a growing nightlife and green space. The new arena will likely have a positive impact of rent in the area.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Next up are Hintonburg and Mechanicsville. \u00a0Like Little Italy, these two areas are in the middle of gentrification. \u00a0When the arena will be built, these two neighborhoods will be sandwiched between Westboro and LeBreton and everything these spots have to offer. \u00a0Not only that, the new Confederation Line will help its residents get around Ottawa that much faster.<\/span><\/p>\n<h2><b>Investors with properties near old arena<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Once the Senators move to LeBreton Flats, landlords in Kanata shouldn\u2019t expect to see a marked decline in rents. \u00a0Kanata is in an economic boom fueled by an influx of high-paying tech jobs. The area won\u2019t lose its appeal from the arena closing down.<\/span><\/p>\n<h2><b>Wrapping This Up<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">If all goes to plan, the LeBreton Flats development will likely have a positive impact on rent and real estate in some areas. \u00a0Investors and landlords who buy into LeBreton, Little Italy, Hintonburg and Mechanicsville will be able to get a few extra dollars of rent every month. \u00a0However, the project spans several years and LeBreton will need to create a name for itself before rents can be raised.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In January 2018, the National Capital Commission (NCC) announced that it reached an agreement in principle with RendezVous Lebreton to develop LeBreton flats. \u00a0The deal will see the construction of a new downtown NHL arena surrounded by housing and amenities such as shopping and community centres. The announcement was well-received by the Ottawa community. \u00a0After [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":484,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[1,4],"tags":[],"coauthors":[11],"class_list":["post-464","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-rental-guides","category-top-list"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.0 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>What Ottawa&#039;s New Arena Agreement Means For Rent Prices?<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/rentals.ca\/blog\/what-ottawas-new-arena-agreement-means-for-rent-prices\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What Ottawa&#039;s New Arena Agreement Means For Rent Prices?\" \/>\n<meta property=\"og:description\" content=\"In January 2018, the National Capital Commission (NCC) announced that it reached an agreement in principle with RendezVous Lebreton to develop LeBreton flats. \u00a0The deal will see the construction of a new downtown NHL arena surrounded by housing and amenities such as shopping and community centres. 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