13 Dec KRP Properties a tech landlord, now a tech innovator
KRP Properties was part of the first wave of Ottawa’s tech sector growth three decades ago. Today, the company and its mainly West Ottawa holdings are undergoing a tech transformation of their own.
The privately owned real estate company has 35 light industrial and office buildings located mainly in and around Kanata and the Kanata North Business Park. Since its inception in 1986, KRP has built a portfolio that now encompasses about three million square feet of class-A and class-B space.
“The tech sector is growing in general, both urban and suburban. Like just about any industry, the challenge is trying to attract top talent,” KRP president Martin Vandewouw said in an interview with RENX.
Vandewouw has been with KRP for 15 years and has a strong tech real estate background. Prior to his time at KRP, he was with Nortel Networks in a corporate real estate capacity for 20 years.
He estimates about 60 per cent of KRP’s tenants are tech-related, companies often much sought after by landlords, and which face their own challenges in a tight market for talent. A major factor in attracting and keeping these tenants, and for them to keep employees happy, is providing space in which they want to work.
KRP brings buildings “with the times”
KRP’s buildings aren’t new – in fact, it doesn’t own a building less than 15 years old. So, a couple of years ago, it began looking at ways to get these buildings more “with the times” from an operations standpoint.
“The way that we heat them, cool them and control energy burn, we wanted to do in a very cost-effective manner,” said Vandewouw. “A combination of low-cost control modules and different levels of software would allow us to operate these buildings at their optimum performance.”
The software-based systems it is installing earned KRP the Innovation Award at the 2018 Building Operators and Managers Association awards in Calgary.
“Our ability to do that is centred around some of the software having the intelligence to do that,” said Vandewouw. “There’s an aspect of AI in the software.”
Instead of buying new HVAC systems and other equipment, the technology makes existing systems more efficient, said its director of leasing Linda Sprung: “The software and AI component is about different types of systems speaking to each other. I think that’s what other landlords aren’t doing very much.”
Vandewouw said KRP believes innovative tech is bound to be attractive to innovative tech companies, showing the company will ‘walk the talk’ as a landlord.
KRP Properties diversifies tenant base
The first upgraded building was at 411 Leggett Dr. Since then, KRP has been rolling out the upgrades to the rest of its buildings and has completed the work at six properties. The campaign has been a success, with KRP boasting a vacancy rate under eight per cent in a market which has begun to recover significantly from years of struggle following the tech bubble bust in the early 2000s.
Expanding beyond tech companies has also helped.
“We’re quite diversified,” said Spring, who has been with KRP for 20 years. “The majority of our tenant base is tech, but we certainly deal with the private sector as well – we can accommodate anything.”
All this tech talk shouldn’t be surprising considering both KRP’s location, and its owner.
Founded in 1986, KRP has one shareholder, longtime Ottawa entrepreneur Terry Matthews and his holding company, Wesley Clover International Corp.
Matthews also owns numerous Ottawa-area properties such as the Marshes Golf Club and the Brookstreet Hotel, overseas properties including Celtic Manor resort in Wales, and has invested in countless Ottawa and area business over the years.
KRP now has about 250 tenants across its properties, Vandewouw estimates, many of whom have grown along with it.
InGenius solution to vacant space
One example is Calian Group Ltd., which provides professional services to health, IT, training, engineering and manufacturing clients. Calian had been leasing 27,000 square feet of flex space, made up of mixed-use office, open-area and lab space at KRP’s 340 Leggett Dr. building.
As a growing Kanata company, though, Calian needed to increase its footprint and KRP didn’t possess the physical space available to accommodate its needs.
“I actually spent some time with Kevin Ford (CEO of Calian) to understand the rationale for why they were leaving us. They were a tenant with us for 10 years,” said Vandewouw.
“They were looking to move from a class-B product to more of a class-A product and, despite the fact that we have three million feet and 35 buildings, the market at the time that they were out looking was fairly aggressive.
“At the time, we just didn’t have a solution they were looking for.”
But that “aggressive market” meant another growing company was also looking for space. Software company InGenius is expanding from a different KRP-owned site into the 27,000 square feet left behind by Calian.
“I think our ability to accommodate tenants is what differentiates us and has been driving the business for the last couple of years,” said Vandewouw.
Bringing in companies from outside of the region, and the city, is an area of focus as well.
Kanata North Business Park largest tech hub
“I would say that 80 per cent of the deals we have done in 2018 were with existing tenants,” said Vandewouw. “You’re still seeing a little bit of the migration of tenants that may have been in Ottawa, in various suburban locations, into Kanata North.
“But you’re also seeing new tenants that had no presence in Ottawa before showing up in Kanata.”
Something many people might not realize is that the Kanata North Business Park is still the largest such entity in Canada, Vandewouw said.
“There’s over 500 companies that call Kanata North home,” he explained. “There’s about 21,000 employees that work for those companies and another 10,000 that would be associated with, or kind of secondary to those companies.”
These workers have enormous economic impact.
“The average worker in Kanata North, I think, contributes about three times the national average to GDP. It’s about $240,000 a year to Canada’s GDP versus an average of about $80,000.”
The post KRP Properties a tech landlord, now a tech innovator appeared first on Real Estate News Exchange (RENX).
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