AlvinofDiaspar
Moderator
I am just glad that BA, RBC and Telus are almost done. That said, I wonder how it will affect PwC and other smaller projects.
AoD
AoD
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taal
Senior Member
Yea you really have to wonder ... I had a look at the report it's not as bad as it seems though ... overall vacancy rates in the entire downtown area (i.e. not just the core) have dropped. Now that is all classes, AAA, AA, A, B ..... But the AAA office space that's going to be available soon might have some trouble filling up. Better put older AAA supply will have a hard time filling the holes.
The % of subleasing is very high right now ... not a good sign for the future as it likely represents lower demand in the future.
The % of subleasing is very high right now ... not a good sign for the future as it likely represents lower demand in the future.
Observer Walt
Senior Member
The start of the PwC building may or may not be put back somewhat, depending on provisions in their lease. Office construction lags the economy, in general, and there will probably be no more announcements of major new construction for some time now, even after the economy turns upward again.
taal
Senior Member
PwC building will be going ahead no matter what from what I've been told.
PwC is taking a good chunk of the office space in it so they'll be fine.
But the point is PwC is also *leaving* a big chunk of office space in other buildings. One can only hope that they are asking for more office space and are planning on expanding.
If all we achieve is a reshuffling of tenants it will be another long while before we see more office construction.
You can't deny that there has been growth in the CBD and all of downtown over the last 10 years as vacancy rates have been falling quite steadily (likely do the the lack of new projects over that time frame and increased absorption in the current supply). But you wonder if we really only needed one or two of these projects to satisfy the increased demand.
There's a lot of talk about the current economic slow down ... don't let that influence your views/opinion on this matter. Yes we'll probably see slower growth and stagnant office space vacancies until these new projects are built and after a surge in the vacancy rate. But it's the long term picture to focus on ... what happens after confidence in the market reestablishes it self. If the past is any indication we won't see anything built in a while.
We'll have to wait and see what the vacancy rates are in 1/2 years. Hopefully they won't jump to 12-15%
PwC is taking a good chunk of the office space in it so they'll be fine.
But the point is PwC is also *leaving* a big chunk of office space in other buildings. One can only hope that they are asking for more office space and are planning on expanding.
If all we achieve is a reshuffling of tenants it will be another long while before we see more office construction.
You can't deny that there has been growth in the CBD and all of downtown over the last 10 years as vacancy rates have been falling quite steadily (likely do the the lack of new projects over that time frame and increased absorption in the current supply). But you wonder if we really only needed one or two of these projects to satisfy the increased demand.
There's a lot of talk about the current economic slow down ... don't let that influence your views/opinion on this matter. Yes we'll probably see slower growth and stagnant office space vacancies until these new projects are built and after a surge in the vacancy rate. But it's the long term picture to focus on ... what happens after confidence in the market reestablishes it self. If the past is any indication we won't see anything built in a while.
We'll have to wait and see what the vacancy rates are in 1/2 years. Hopefully they won't jump to 12-15%
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Please find attached our 2Q'10 Toronto Office Market Report.
SUMMARY: Demand for office space has steadily risen over the past 4-5 months. In Toronto's downtown area (i.e. south of Dundas to the lake) over 600,000 SF of net new space was leased, representing about 1.4% of the market. TD Bank alone leased close to 200,000 SF.
In the Financial Core, the vacancy rate decreased from 8.1% at the end of 1Q'10 to 7.1% at the end of 2Q'10. TD Centre, Commerce Court, Royal Bank Plaza and First Canadian Place are experiencing the largest vacancies which, in turn, are certainly keeping a lid on rents across the broader market, regardless of location. Suffice it to say, this benefits all tenants.
Rental rates have risen slightly. Signs of economic recovery are tentative, and not surprisingly, landlords are tentative as well.
The amount of sublets introduced to the market decreased last quarter. Good sublets are leasing relatively quickly.
I hope you find these reports useful and invite you to contact me if you have any further questions. If you do not wish to receive future editions of this quarterly report please email your request to XXXX
SUMMARY: Demand for office space has steadily risen over the past 4-5 months. In Toronto's downtown area (i.e. south of Dundas to the lake) over 600,000 SF of net new space was leased, representing about 1.4% of the market. TD Bank alone leased close to 200,000 SF.
In the Financial Core, the vacancy rate decreased from 8.1% at the end of 1Q'10 to 7.1% at the end of 2Q'10. TD Centre, Commerce Court, Royal Bank Plaza and First Canadian Place are experiencing the largest vacancies which, in turn, are certainly keeping a lid on rents across the broader market, regardless of location. Suffice it to say, this benefits all tenants.
Rental rates have risen slightly. Signs of economic recovery are tentative, and not surprisingly, landlords are tentative as well.
The amount of sublets introduced to the market decreased last quarter. Good sublets are leasing relatively quickly.
I hope you find these reports useful and invite you to contact me if you have any further questions. If you do not wish to receive future editions of this quarterly report please email your request to XXXX
dahusbandofbath
Active Member
Good news for the developers of Southcore.
Please find attached our Q4'12 Toronto Office Market Report.
SUMMARY: The Financial Core vacancy rate decreased from 5.1% to 4.6% (quarter-over-quarter).
The current trend is migration to the financial core and flight-to-quality (i.e. tenants moving from Class “B” to Class “A” buildings). Most recently, Zurich leased 90,000 SF at First Canadian Place (moving from 400 University), and Laurentian Bank leased 160,000 SF at Commerce Court West (moving from 1 Toronto Street, College Park and 130 Adelaide Street West).
Commerce Court West has experienced a dramatic turnaround. Ten months ago, 20 floors were available for lease. All floors have since been leased or are under option. Notable transactions included Laurentian Bank, Chubb, Equinox and Inmet Mining.
Eight new office towers are currently under construction or redevelopment downtown (i.e. south of Bloor). The most recent announcements are: 1 York Street (to be anchored by HOOPP - 132,000 SF) and 100 Adelaide Street West (Ernst & Young – 225,000 SF).
The new office buildings will total 5.6M SF and will add 10% to the existing downtown stock. The completion dates range from 2014 – 2017.
I hope you find these reports useful and invite you to contact me if you have any further questions. If you do not wish to receive future editions of this quarterly report please email your request to ...
SUMMARY: The Financial Core vacancy rate decreased from 5.1% to 4.6% (quarter-over-quarter).
The current trend is migration to the financial core and flight-to-quality (i.e. tenants moving from Class “B” to Class “A” buildings). Most recently, Zurich leased 90,000 SF at First Canadian Place (moving from 400 University), and Laurentian Bank leased 160,000 SF at Commerce Court West (moving from 1 Toronto Street, College Park and 130 Adelaide Street West).
Commerce Court West has experienced a dramatic turnaround. Ten months ago, 20 floors were available for lease. All floors have since been leased or are under option. Notable transactions included Laurentian Bank, Chubb, Equinox and Inmet Mining.
Eight new office towers are currently under construction or redevelopment downtown (i.e. south of Bloor). The most recent announcements are: 1 York Street (to be anchored by HOOPP - 132,000 SF) and 100 Adelaide Street West (Ernst & Young – 225,000 SF).
The new office buildings will total 5.6M SF and will add 10% to the existing downtown stock. The completion dates range from 2014 – 2017.
I hope you find these reports useful and invite you to contact me if you have any further questions. If you do not wish to receive future editions of this quarterly report please email your request to ...
taal
Senior Member
Ha that explains the Zurich building situation ...
canarob
Senior Member
Interesting about Commerce Court West. I think in the long run all the old MINT towers will be fine if they make an effort to upgrade (as much as is possible with older buildings). Not every company needs to be in the newest and LEEDiest building in the city. The prestige, location and PATH connectivity of the old bank towers will continue to matter.
taal
Senior Member
Yea but with commerce court filling up other, less prominent (still class A) towers have more space in them.
But I agree the mint towers will be OK. It will be more interesting what happens when the new offices come to the market.
Keep in mind, RBC / BA East / 18 York / ... have a LOT OF SPACE still available in them (all over 50% empty ... some closer to 70%) ... when the last batch of towers finally completed they were nearly 100% full.
I know they are still a couple years off, but that'll be the big test, if they're not close to 100% full, I don't think we'll see many if any new towers going up for some time until they do get full.
But I agree the mint towers will be OK. It will be more interesting what happens when the new offices come to the market.
Keep in mind, RBC / BA East / 18 York / ... have a LOT OF SPACE still available in them (all over 50% empty ... some closer to 70%) ... when the last batch of towers finally completed they were nearly 100% full.
I know they are still a couple years off, but that'll be the big test, if they're not close to 100% full, I don't think we'll see many if any new towers going up for some time until they do get full.
AlvinofDiaspar
Moderator
cdr108
Senior Member
article above:
For Toronto office tenants, bidding wars increasingly common: report
TARA PERKINS - REAL ESTATE REPORTER
The Globe and Mail
Published Thursday, Apr. 25 2013, 6:58 AM EDT
Last updated Thursday, Apr. 25 2013, 2:13 PM EDT
The bidding wars that came to characterize Toronto’s housing market in recent years are now playing a role in its office space market, according to real estate brokerage Cushman & Wakefield.
The amount of available space in the city’s “B Class” office properties (office properties are ranked on a scale where “A Class” buildings are the top quality ones in the most sought-after locations) has been very low for nearly two years now.
“For the first time in many years we’ve seen tenants bidding against tenants for space – highlighting the strength of the landlord’s market,” said Michael Caplice, senior managing director of office leasing at Cushman & Wakefield. “This is highly unusual in downtown Toronto.”
At the end of March the vacancy rate for B Class space was 3.7 per cent, marking the seventh quarter in a row that it had come in under 4 per cent. In a balanced market it would be closer to 7 to 9 per cent, according to Mr. Caplice. With people feeling better about the economy, many tenants are looking to expand but their options are limited and prices remain high downtown.
“In this cycle we only expect things to get more difficult for tenants as there will be upward pressure on rental rates with no new supply projected to open up in the brick and beam market,” he said.
The expected construction of new office towers in the coming years will likely attract some tenants who are currently in B Class space, freeing up some space.
For Toronto office tenants, bidding wars increasingly common: report
TARA PERKINS - REAL ESTATE REPORTER
The Globe and Mail
Published Thursday, Apr. 25 2013, 6:58 AM EDT
Last updated Thursday, Apr. 25 2013, 2:13 PM EDT
The bidding wars that came to characterize Toronto’s housing market in recent years are now playing a role in its office space market, according to real estate brokerage Cushman & Wakefield.
The amount of available space in the city’s “B Class” office properties (office properties are ranked on a scale where “A Class” buildings are the top quality ones in the most sought-after locations) has been very low for nearly two years now.
“For the first time in many years we’ve seen tenants bidding against tenants for space – highlighting the strength of the landlord’s market,” said Michael Caplice, senior managing director of office leasing at Cushman & Wakefield. “This is highly unusual in downtown Toronto.”
At the end of March the vacancy rate for B Class space was 3.7 per cent, marking the seventh quarter in a row that it had come in under 4 per cent. In a balanced market it would be closer to 7 to 9 per cent, according to Mr. Caplice. With people feeling better about the economy, many tenants are looking to expand but their options are limited and prices remain high downtown.
“In this cycle we only expect things to get more difficult for tenants as there will be upward pressure on rental rates with no new supply projected to open up in the brick and beam market,” he said.
The expected construction of new office towers in the coming years will likely attract some tenants who are currently in B Class space, freeing up some space.
Please find attached our Q1'13 Toronto Office Market Report.
SUMMARY: The Financial Core vacancy rate increased from 4.6% to 4.9% (quarter-over-quarter).
Activity since the beginning of the year has slowed. While it is difficult to predict if this is a short term pause or signs of a longer term trend, the latter seems more plausible.
4.6M SF of new development between 2009 and 2011 addressed 15-20 years of pent up demand. The new buildings filled up rather quickly despite a market downturn. The Big Four accounting firms all have new homes, as do many of the large law firms and financial institutions.
Looking ahead, 5.6M SF of new office space will be constructed between now and 2017, but pent up demand has largely been addressed and there are fewer big tenants looking for new space. Coupled with continued concerns in the global economy, a financing slowdown in the mining and resources sector, and tough times for the investment dealers, the Toronto office market may have some challenges ahead.
Recent transactions include Apple for 50,000 SF at Bremner Tower and Cisco for 100,000 SF at RBC WaterPark Place. Expect to hear an announcement soon for TSX/CDS at 100 Adelaide Street West (anchored by E&Y).
I hope you find these reports useful and invite you to contact me if you have any further questions. If you do not wish to receive future editions of this quarterly report please email your request to ...@cbre.com.
Regards,
John
SUMMARY: The Financial Core vacancy rate increased from 4.6% to 4.9% (quarter-over-quarter).
Activity since the beginning of the year has slowed. While it is difficult to predict if this is a short term pause or signs of a longer term trend, the latter seems more plausible.
4.6M SF of new development between 2009 and 2011 addressed 15-20 years of pent up demand. The new buildings filled up rather quickly despite a market downturn. The Big Four accounting firms all have new homes, as do many of the large law firms and financial institutions.
Looking ahead, 5.6M SF of new office space will be constructed between now and 2017, but pent up demand has largely been addressed and there are fewer big tenants looking for new space. Coupled with continued concerns in the global economy, a financing slowdown in the mining and resources sector, and tough times for the investment dealers, the Toronto office market may have some challenges ahead.
Recent transactions include Apple for 50,000 SF at Bremner Tower and Cisco for 100,000 SF at RBC WaterPark Place. Expect to hear an announcement soon for TSX/CDS at 100 Adelaide Street West (anchored by E&Y).
I hope you find these reports useful and invite you to contact me if you have any further questions. If you do not wish to receive future editions of this quarterly report please email your request to ...@cbre.com.
Regards,
John
Lansdude
Active Member
4.6%, 4.9%, 4.6M SF, 5.6M SF... of how much existing in total?
Please find attached our Q3'13 Toronto Office Market Report.
SUMMARY: The Financial Core vacancy rate increased from 5.6% to 5.8% (quarter-over-quarter).
Activity in the last quarter has been mixed. Large blocks of space are seeing limited activity, but demand for space under 3,000 SF is quite healthy and good quality suites in this size range can be difficult to find.
Net rental rates have tapered off after three years of steady increases. The amount of sublet space in the Financial Core has increased from 19.4% to 25.6% (quarter-over-quarter) of all available space, driven largely by McMillan (47,000 SF), National Bank (43,000 SF), Glencore Xstrata (42,000 SF), and Stifel (20,000 SF).
The five new offices towers under construction downtown (i.e., Bremner Tower, RBC WaterPark Place, Bay Adelaide East, 1 York, and 100 Adelaide) are currently 51% pre-leased.
Expect to hear an announcement soon regarding Sun Life (currently located at 150 & 225 King Street West).
I hope you find these reports useful and invite you to contact me if you have any further questions. If you do not wish to receive future editions of this quarterly report please email your request to
Regards,
John
John Wallace* | Vice President
SUMMARY: The Financial Core vacancy rate increased from 5.6% to 5.8% (quarter-over-quarter).
Activity in the last quarter has been mixed. Large blocks of space are seeing limited activity, but demand for space under 3,000 SF is quite healthy and good quality suites in this size range can be difficult to find.
Net rental rates have tapered off after three years of steady increases. The amount of sublet space in the Financial Core has increased from 19.4% to 25.6% (quarter-over-quarter) of all available space, driven largely by McMillan (47,000 SF), National Bank (43,000 SF), Glencore Xstrata (42,000 SF), and Stifel (20,000 SF).
The five new offices towers under construction downtown (i.e., Bremner Tower, RBC WaterPark Place, Bay Adelaide East, 1 York, and 100 Adelaide) are currently 51% pre-leased.
Expect to hear an announcement soon regarding Sun Life (currently located at 150 & 225 King Street West).
I hope you find these reports useful and invite you to contact me if you have any further questions. If you do not wish to receive future editions of this quarterly report please email your request to
Regards,
John
John Wallace* | Vice President