City of Ottawa to buy downtown hotel for $45 million

The City of Ottawa is buying a former hotel at 377 O’Connor St. to turn it into transitional housing. The $45 million price tag is eligible to be covered by the federal government’s Interim Housing Assistance program. (Josh Pringle/CTV News Ottawa)

The City of Ottawa is buying a downtown hotel for $45 million to turn it into transitional housing for families experiencing homelessness.

A report for the finance and corporate services committee recommends council approve the deal to purchase the eight-storey former long-term stay hotel at 377 O’Connor St. at Gladstone Avenue for $45 million, with an estimated $2 million in closing costs. Staff say the federal government’s Interim Housing Assistance program will cover 95 per cent of the cost.

The building has 128 apartment suites, including 74 studios, 51 one bedrooms, two two-bedroom and one three-bedroom suites.

The City of Ottawa currently operates two permanent family shelters, along with a transitional housing facility on Corkstown Road with capacity to support up to 128 families.

“In addition to temporary accommodations, transitional housing provides residents with basic needs and support services,” staff said. “It is designed to support residents as they prepare to transition to long-term housing.

According to the report, there were approximately 500 families in overflow placements in December and approximately 30 additional families on a waitlist.

The city issued a request for offers last September for the purchase or lease of a multi-unit accommodation for use as family transitional housing. Staff say the city received eight submissions, including for 377 O’Connor St.

Council is being asked to approve the purchase of the O’Connor Street building, with staff noting the former long-stay apartment and hotel are currently 100 per cent vacant.

Staff say the building has several advantages for purchasing, including:

• Turnkey, vacant building. “The complex can be occupied almost immediately with options for modifications,” staff said.
• Ideal number of units
• Each unit is equipped with a full kitchen, a three-piece bathroom and a queen-size bed
• Varied unit sizes
• No loss of units from the private rental market

According to the report, the purchase of the former hotel will reduce the city’s reliance on hotels and the city’s net cost per room by approximately 51 per cent for up to 128 families.

“This approach maximizes available federal funding, avoiding up to $2.5 million annually in overflow-hotel costs when compared to renting an equivalent number of private hotel rooms,” staff said.

Somerset Coun. Ariel Troster said it’s “great news” the city is buying the hotel.

“These suites have full kitchens and the building is close to schools, the Y and transit,” Troster said on Facebook.

“My strong preference is for permanent housing for families and I hope this building can eventually be converted for longer term stays. But in the meantime, this is good news for families experiencing homelessness and good for Centretown. I can’t wait to welcome these new neighbours.”

Hotel valued between $41 million and $50 million

The report said the owner listed an asking price of $50 million, while staff said appraisals from the city and a third-party consultant estimated the market value of $41 million to $43 million.

“Negotiations continued with the City presenting its first written offer December 19, 2025,” staff said.

“After several offers and counter-offers, a negotiated price of $45,000,000 was finalized January 21, 2026. This price is approximately five per cent to nine per cent above the City‘s appraised values and 10 per cent less than the vendor’s asking price. Staff support the final negotiated price given that the property carries benefits to the City being vacant and ready for occupancy with fixtures and chattels in place.”

If council approves the purchase and once the transaction is complete, people will be able to move into the building in the summer.

Staff say the $45 million purchase will be funded through the Federal Interim Housing Assistance Program, leveraging the 95 per cent cost share agreement.”

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