MARKET OVERVIEW

Commercial Real Estate
Kingston ranked #2 on MoneySense Magazine’s Top 10 “Best Places to Live 2010” list. The city’s economy has remained stable due to its relatively small reliance on the manufacturing sector and the solid economic backbone provided by such key sectors as government, the CFB Kingston military base, and post secondary educational institutions (Queen’s University, Royal Military College and St. Lawrence College). A $4.8M federal government stimulus from its “Economic Action Plan” also bolstered the city’s economy during 2010.

Retail Sector
Downtown retail was still struggling with a challenging market in early 2010, and demonstrating significant storefront vacancy. However, the second half of the year saw a dramatic rebound and an influx of new restaurants and boutique retailers to the downtown core. The prospect for retail looks moderately promising for 2011. In the west end, a new 174,000 sq ft Lowes opened in January 2011.

Office Sector
The office sector will see considerable expansion in 2011. There are plans for 290,000 sq ft of new office space to be constructed in a number of mixed-use developments. A much anticipated downtown redevelopment of the historic S&R department store as the Smith Robinson Building, which will be LEEDs Silver certified, includes 46,800 sq ft of prestigious office space on the upper three floors of the building above street level retail/restaurant space.

Industrial Market
With a market demand for quality smaller industrial spaces outstripping supply, and driving construction of new multi-tenant buildings, new space should be absorbed relatively quickly. Government, R&D and distribution are the primary sectors influencing activity in this sector, with Tim Hortons breaking ground on their new 130,000 sq ft, $45 million distribution centre in 2010. The facility, which will service more than 650 restaurants in Ontario and Quebec, should be fully operational in 2011.

Forecast
The 2011 commencement of construction on several new mixed-use complexes and on an anticipated 4-year off shore wind turbine project on Wolfe Island should provide an increase in area employment, resulting in a boost to the city’s retail and hospitality sectors and general economy.