Total investment in Ottawa’s commercial real estate market decreased by 36% on an annual basis in 2020, as the COVID-19 pandemic cooled commerce in the city, according to research from Altus Group.

Investment fell to $1.5 billion from a record $2.5 billion in 2019, however, the volume of deals only declined by 3%, which signifies that transactions continued at a near normal pace but at discounted values. Institutional investors took wait-and-see approaches through most of 2020, as well. Additionally, there was a significant chasm between what buyers were prepared to pay and what sellers demanded. In Q4-2020, there was $498 million in transaction volumes, down by 8% year-over-year, indicating a softer landing to close the year.

Ottawa’s residential and industrial, commercial, institutional (ICI) land sectors each grew by 5% annually in 2020—the former by $332 million and ICI by $212 million—because, according to Altus, Ottawa is suffering from scarce supply of both residential and commercial space amid raging demand. Moreover, at $396 million and $361 million, the apartment and office sectors respectively sat atop total investments in Ottawa last year, however, both decreased by 34% and 46% on an annual basis. Industrial also had the starkest decline in investment at only $82 million, which is a whopping 75% below 2019 levels, and the retail sector, at $99 million, dropped by 72%.

Altus’s research expressed belief that a COVID-19 vaccine will restore certainty to Ottawa’s commercial real estate market, and that it will, therefore, renew activity. Given that the fourth quarter of 2020 was replete with optimistic signs in the market, Altus believes the market will perform strongly in 2021.