Uncle Teddy
Senior Member
The new towers will probably be the end of the boom for a while.
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taal
Senior Member
I agree; But to be fair / honest, the exact same thing was said about the last mini boom (by the same leasing companies as well ... : - ).
Very curious what the sun life news is, anyone have any insights ?
Very curious what the sun life news is, anyone have any insights ?
TrickyRicky
Senior Member
I think it shows that the system is balanced and working fairly well. I personally am less interested in huge office buildings and large rental absorptions. I'm more interested in company formation. Where are the cities next great companies forming and renting? Or is there no such thing and no such place?
One Nut Kruk
Banned
When do you think Brookfield Place III will be built?
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taal
Senior Member
No there is space for this, and it is happening all over the core; Predominately in the King West submarket (this is a large area i.e. Spadina / Liberty Village). Toronto is actually very well known as one of the top locations for new startups in the technology / media space. This trend will continue I'm sure. There are many well known (well in the space) startups from Toronto !!
In terms of leasing stats of course these don't contribute much as it is still (and will always be) such a small percentage of the larger market.
My only wish in the big scheme of things is that large American multinational companies would consider downtown for the location of their Canadian HQ, as opposed to the suburbs; This is what drives a lot of the activity in the 905.
taal
Senior Member
I doubt it'll happen for a long time; The proposal on Front was further along apparently ; But no tenants.
DtTO
Active Member
Google has a large office downtown, and the last report mentions Apple purchasing 50k sq ft downtown. I hope the trend continues, and proliferates with EU companies once the trade agreement is enacted.
taal
Senior Member
No, these are just high profile tech companies, and they always tend to locate in the core's of the cities they have offices in.
But that's a good point re EU companies, I can see them choosing to locate downtown compared to say a typical american company.
But that's a good point re EU companies, I can see them choosing to locate downtown compared to say a typical american company.
TOareaFan
Superstar
other than industry specific examples (ie. no surprise that the tech companies are in Markham and that the retail companies are out near highways in the west end - i.e. better access to their stores and warehousing) what big US companies are favouring the burbs?
Coca Cola moved downtown from the burbs.
TOareaFan
Superstar
I thought they moved to King East this past spring
http://www.thestar.com/business/201...nveils_new_king_street_east_headquarters.html
taal
Senior Member
They did ... but the 'burbs' here being the outer 416, not the 905 (they were at Steeles [south side] / 404) ...
There are many many many large american companies in the 905 (ibm / samsung / oracle / sun / a ton more along these lines in Mississauga) ... I guess to be fair even in other cities these large companies to tend to locate in suburbs (whether that being the outer part of the city proper or adjoining suburbs is another matter).
So while there was a little period 10/20 years ago where some companies left the core, I don't think this really happened, for the most part companies located in the core stayed there less small startups who tend to move around (sometimes to the 905 when they get a bit larger and need to be cost competitive ... that's OK).
If anything its the outer 416 that's suffering, the 404-401 area lost over 2000 jobs in the last 5/10 years according the a recent report by Avison Young if I recall, and you can see this in Scarborough and Etobicko. These large companies should find the space in the afromentioned area just as attractive as the 905 ... but anyway is probably too late to change any of this. There are established hubs for business in the 905 that are larger then what exists in the outer 416 (e.g. 404/407).
There are many many many large american companies in the 905 (ibm / samsung / oracle / sun / a ton more along these lines in Mississauga) ... I guess to be fair even in other cities these large companies to tend to locate in suburbs (whether that being the outer part of the city proper or adjoining suburbs is another matter).
So while there was a little period 10/20 years ago where some companies left the core, I don't think this really happened, for the most part companies located in the core stayed there less small startups who tend to move around (sometimes to the 905 when they get a bit larger and need to be cost competitive ... that's OK).
If anything its the outer 416 that's suffering, the 404-401 area lost over 2000 jobs in the last 5/10 years according the a recent report by Avison Young if I recall, and you can see this in Scarborough and Etobicko. These large companies should find the space in the afromentioned area just as attractive as the 905 ... but anyway is probably too late to change any of this. There are established hubs for business in the 905 that are larger then what exists in the outer 416 (e.g. 404/407).
Glen
Senior Member
We are approaching new a new low in office construction. See page 31 here
http://www.cbc.ca/toronto/features/stuckintraffic/docs/transition.pdf
http://www.cbc.ca/toronto/features/stuckintraffic/docs/transition.pdf
DtTO
Active Member
^ I find that very hard to believe. Even if the burbs aren't doing too well, I would think that with the amount of office construction downtown, things would at least be neutral. According to that graph, we were building more offices in the late 90s than at any point during our current boom, since ~2006. Again, I find that very hard to believe. I'd like to see what taal thinks, as he seems to have quite a bit of knowledge in this area.
taal
Senior Member
No the chart is indeed accurate, but its not negative news for the inner 416 (i.e. the downtown core) as essentially what's happened is construction in the 905 (in more recent years) and the outer 416 (over the last 10 / 20 years) has slowed significantly.
The 905 is deeply tied to the US market (particularly the node around the airport, which is by far the largest), and that's why they suffered a lot more in the recession that the inner 416 did.
But keep in mind, there will be another spike on that chart in about 2/3 years with 5 million square foot of office space coming online in that period (very similar to the spike in 2009), so I don't see the argument; "We're hitting a new 'low'" being very legitimate. Rather I'd argue the boom in the 1980-1990s was rather unprecedented (a lot of this was in the 905).
Given that the US market is rebounding to a certain degree the 905 market has been performing better over the last few quarters, and I think this trend will continue. The more interesting question is what will happen with the inner core, of course given the amount of space under construction it should be expected to see some slow down, that's healthy, but what will the office market look like in 2017 ish will be the telling factor.
A couple other interesting points:
- When I refer to Toronto here I'm essentially referring to the inner core, I honestly consider the rest of the 416 a write off; There has been some speculation that the market may rebound as traffic in the 905 is just so bad and the outer 416 is actually somewhat better, but this hasn't materialized yet.
- Just to emphasis this point, the outer 416 has been losing jobs over the last 20 years or so, generally at a very slow rate but regardless ...
- The inner core will have some competition from new "urban nodes", think along the lines of VCC / Markham Center. Well to be fair I cannot say if this will indeed be competition but that's what time will tell. It may be more likely that the competition will be between NYCC and these new markets, KPMG is a good example, they're moving a lot of their offices around York Mills and Yonge, but will likely retain all presence in the core
The 905 is deeply tied to the US market (particularly the node around the airport, which is by far the largest), and that's why they suffered a lot more in the recession that the inner 416 did.
But keep in mind, there will be another spike on that chart in about 2/3 years with 5 million square foot of office space coming online in that period (very similar to the spike in 2009), so I don't see the argument; "We're hitting a new 'low'" being very legitimate. Rather I'd argue the boom in the 1980-1990s was rather unprecedented (a lot of this was in the 905).
Given that the US market is rebounding to a certain degree the 905 market has been performing better over the last few quarters, and I think this trend will continue. The more interesting question is what will happen with the inner core, of course given the amount of space under construction it should be expected to see some slow down, that's healthy, but what will the office market look like in 2017 ish will be the telling factor.
A couple other interesting points:
- When I refer to Toronto here I'm essentially referring to the inner core, I honestly consider the rest of the 416 a write off; There has been some speculation that the market may rebound as traffic in the 905 is just so bad and the outer 416 is actually somewhat better, but this hasn't materialized yet.
- Just to emphasis this point, the outer 416 has been losing jobs over the last 20 years or so, generally at a very slow rate but regardless ...
- The inner core will have some competition from new "urban nodes", think along the lines of VCC / Markham Center. Well to be fair I cannot say if this will indeed be competition but that's what time will tell. It may be more likely that the competition will be between NYCC and these new markets, KPMG is a good example, they're moving a lot of their offices around York Mills and Yonge, but will likely retain all presence in the core