Well that's where I disagree. For one, there is demand for new development: look at 16 York, which is
breaking ground without an anchor tenant. That's how confident the investors are.
Second, while there is no comparison to Union Station and its easy access to labour commuting from east and west 905 on the Gardiner and the GO, there is comparison in another respect: commuters from north 416 and 905. Why work somewhere in the Union Station district if you could get off the subway or the roads at Eglinton? I think it will be an attractive idea for commuters, especially when the Crosstown is finished, and I think that translates into redevelopment interest at this site.
I'm not questioning demand downtown
I'm questioning demand (at *high* rental rates, which are needed to justify new A+ office builds) anywhere on Yonge north of Bloor up to Steeles (hence why you really haven't seen any new office building construction in that stretch (less a few *forced* condo office buildings).
I really think at the end of the downtown is still much much easier to access even after the crosstown project that I doubt it'll really increase demand in the area a lot.
I bet you'll find ridership won't be astronomically higher than what's already on the bus routes that service Eglinton.
I mean remember the cost / benefit equation for a company / landlord:
1) I can lease office space downtown at a high rental rate but get all the advantages of being down (transit, attractive to yonger generation, ...)
2) I can pay substantially less and lease in the suburbs at traditional office parks
3) In-between I can lease space in new pseudo downtown / attractive areas (let's group, Y&E, NYCC, now Vaughan, lesser extent Markham Downtown, MCC) here as well.
So I think there is a huge demand for 1 ... a big demand for 2, and a much smaller but growing demand for 3).
1) Is evident even intra-Toronto, lots of companies have moved from NYCC and Y&E to downtown over the last few years.
The problem with 3) is cost, Y&E/NYCC are a lot more than Vaughn Center and Markham rental rate wise - and what's the added advantage ? The "its in a good, attractive location factor", well if that's the main criteria they're probably lumped into group 1) and are moving downtown (I saw downtown broadly, can be the core, or fridge markets on the west/east in brick and beam offices).
Now when costs are more competitive between say NYCC/Y&E <-> Markham/Vaughan ... they're relatively equal, and again its clear there is demand at those rates as the Y&E/C/NYCC have low vacancy rates, but now if you come in with a new AAA dev and need to charge more, I wager most folks would just want to locate downtown.
Anyway just a theory; Time will tell ... the theory to clarify is, existing office stock will continue to do decently well but you won't see a lot of new construction (or any, less forced construction i.e. replacing an office building and forced by the city ...) in Y&E. Also if this dev goes ahead at the CT site ... and you see the new dev has an equal amount of office space (but just a lot of added condos / residential) which is what I predict will happen, vs say more office space (more than the ~ hmm what is it, 400-600K in the existing 3 office buildings).
btw as some proof to this point, in the last 3/4 years NYCC vacancy rates have been increasing, a lot of that due to tenants relocating (not to the 905 but rather downtown), I think you'll see this continue.
