Is CityPlace Toronto’s next ghetto?

[AKS]

I don't know why they don't move them back to their own towers downtown? I've read on the forum people mentioned the Royal Bank Tower is hardly occupied by Royal Bank. Most of it is leased out. Even the TD towers, they've leased out their offices. They could just terminate their lease to tenants when it expires and slowly move their own offices back in. Royal Bank is consolidating down to south core. There's a lot of office spaces being built in the financial district area (south core). It's near union station so that should make it easy for 905 people to take the GO train and the newer buildings are located on AAA land.

 

[taal]

It seems scary that banks or anyone would even consider moving space, why does the topic even come up ? Taxes ? ... it may not even be taxes, of course gross rental rates will be less in the 905 verse downtown, that can be seen in any city in North America.


It's interesting you mention that though ... RBC, just leased a big portion of the York Mills center; I'm talking about 180,000 square feet of space (there was a ton of space in this building before).

Not sure where the jobs will be moving from ? I'm guessing downtown in some of their older buildings ?

But its interesting those chose Toronto instead of the 905 in this particular case.

 

[taal]

I don't know why they don't move them back to their own towers downtown? I've read on the forum people mentioned the Royal Bank Tower is hardly occupied by Royal Bank. Most of it is leased out. Even the TD towers, they've leased out their offices. They could just terminate their lease to tenants when it expires and slowly move their own offices back in. Royal Bank is consolidating down to south core. There's a lot of office spaces being built in the financial district area (south core). It's near union station so that should make it easy for 905 people to take the GO train and the newer buildings are located on AAA land.

hmm, why do you think the big banks have a lot of space in the 905 ? They don't ... I wasn't referring to them in particular. The big banks (at least today are mostly located in Toronto proper). There was never a big shift out of the big banks ... ever ...

Now a big exception has been the massive call center projects in Meodavalle and some data centers.

I mean that's understandable.

I really wasn't even aluding to the big banks, i was talking about other companies. I don't think there have been many companies in the last 5/10 years or so that have left the core for the 905, but there have been some from the outer 416 (I think that is the area that stands to lose the most).

 

[Jonny5]

I don't know why they don't move them back to their own towers downtown? I've read on the forum people mentioned the Royal Bank Tower is hardly occupied by Royal Bank. Most of it is leased out. Even the TD towers, they've leased out their offices. They could just terminate their lease to tenants when it expires and slowly move their own offices back in. Royal Bank is consolidating down to south core. There's a lot of office spaces being built in the financial district area (south core). It's near union station so that should make it easy for 905 people to take the GO train and the newer buildings are located on AAA land.

Which of the towers are actually owned by the banks? I thought Brookfield, Oxford, Bentall and others owned most of them now. The TD Centre is owned by Cadillac-Fairview. TD Bank can't just tell other tenants to leave.

 

[Thanos]

Well in 2012 one of the big banks will be closing a downtown floor of about 100 employees and moving them to Mississauga.
Now some might say these jobs are back office jobs but the majority of financial industry jobs are back office jobs and they are well paying jobs with great benefits.
I don't see any of them going to Markham or other non-Mississauga suburbs. The point i'm trying to make is those non-Mississauga 905 areas are having a hard time to attract businesses. Those that will set up are, like Taal said earlier, warehousing and ditribution which need a lot of land. However, these types of businesses are not what downtown Markham and Vaughan and Pickerings' business park are trying to attract.

I can also see a bank moving to downtown Calgary before they move a big portion to the 905 region.

 

[AKS]

Which of the towers are actually owned by the banks? I thought Brookfield, Oxford, Bentall and others owned most of them now. The TD Centre is owned by Cadillac-Fairview. TD Bank can't just tell other tenants to leave.

I thought the banks owned the buildings? I know that Brookfield owns the CT towers, but didn't know about the others. There's a lot of new buildings being built, so they could relocate them there if the banks wanted to. If you claim the leases expire at different times, they could find out when the leases expire on the other tenants and steal the renewel leases from them. That's what happened to one of the places I worked at. We had to relocate because a company signed up for the new lease. So when it came for renewal, we couldn't renew. The owner should have notify us there was an interested party and ask if we want to renew before signing it with a new one but they didn't.

 

[Jonny5]

I thought the banks owned the buildings? I know that Brookfield owns the CT towers, but didn't know about the others.

Some quick, and possibly inaccurate, internet searches tell me this:

Brookfield owns First Canadian Place, The Exchange Tower and the Bay-Adelaide Centre
Oxford owns Royal Bank Plaza
Cadillac Fairview owns the entire TD Centre and the Eaton Centre towers
BCIMC owns Commerce Court

EDIT: I can't find anything about Scotia Plaza, but the people listed in the "Contact Us" section of the website have @scotiabank.com email addresses, so this may be the only tower to still be owned by the bank.

 

[Thanos]

I keep on hearing people say that RBC does not have a big presence at Royal Bank Plaza.
As far as i know, it's still their corporate head office and they're still the biggest tenant there.
I don't think the banks own any of their buildings. They just buy the naming rights kinda like stadiums.
This reminds me of the people panicking with the Edmonton Manulife Tower rumors. Many thought that Manulife was moving positions from Toronto to Edmonton when in fact they were just buying the naming rights.

 

[taal]

What offices are moving to 905 out of curiosty?

Again I'm curious which jobs are moving to york mills center too.


RBC has some presense in the south tower but none at all in the north one.
The poster above is correct, banks no longer own their buildings, this isn't indicitive of anything and is the case across North America.


I think it's smaller firms that we need to worry about moving, but not creatiavte types in King west and the like, there a lot to be said to be located beside similar industries.

Hence why Markham has so many *LARGE* american software companies.


I think it's fine for growth to take place in Markham, but Toronto must grow as well, particularly the outer 416, but I just don't see it happening.

Maybe we just write off the outer 416 and hope the core grows, and at a faster pace.

I just wish large american companies could be attracted downtown instead of the airport area and the like.

 

[AKS]

This might be the reason why the outer 416 areas are having problems expanding.
If you look at the chart, it shows the income levels of people living in the various parts of Toronto.



ImageShack.us


ImageShack.us

 

[taal]

Chicken and the egg ? no jobs so less income ?

You can argue in the past the middle class who worked downtown lived in said areas but slowly moved to the 905, leaving the poor.

Though there are many many service jobs downtown that clearly don't pay that well; So said individuals need somewhere to live as well.

 

[AKS]

Well, it gives you an indication of the income locations where people generally tend to live. The lower income people are probably less qualified or less opportunities (corporations not interested to hire) to get the positions that big companies recruit for. If they were able to get the good jobs, they wouldn't be living in the low income area. They would move up to better locations. Or some move out to 905 where houses are bigger, cheaper and newer. Large companies that want to attract workers will tend to locate where they can find them and pick areas that are thriving. So some companies have relocated to 905. If they aren't relocating to 905, chances are they would be along the Yonge line or downtown area.

You are also right that the middle class is moving to 905, leaving the poor in the outer 416 area. That's quite possible. But probably just as many high income people move out as well to live in Mac mansions. I think Ontario is becoming more service oriented than manufacturing. So you end up with either high or low end paying jobs, especially in GTA. A lot of the stuff we sell aren't made in Canada. Most are outsourced. And recently I saw on the news they will be increasing imports to Canada from the US. So we might lose more middle class jobs if we are importing.

Anyhow, the chart just shows how unlikely big companies will relocated to the outer 416. They will locate to thriving areas like Yonge and downtown or 905 like Mississauga where it's thriving.

 

[kkgg7]

those who think big banks will move to the 905 must be delusional. Banks, law firms, consulting companies etc., have something more important to them than rent: image. If RBC's headquarters is located in Brampton, it will sound like a cheap bank which can't afford high rent in prime location. If you look at most wall street banks, they may have people here and there, but midtown Manhattan will always be the core business area. Imagine RBC/TD invite some potential partner to visit and end up meeting in Brampton. It doesn't matter whether it is front office or back office. The image of being able to afford to have business in prime real estate is essential. You go cheap to save rent, you end of losing business. It is like a lawyer has to wear a $1,500 suit instead of an $150 one although the suit itself has nothing to do with its owner's ability.

Downtown is where business happens. Downtown is where million dollar deals are made. Practically speaking, you have the convenience of being close to lawyers, consultants, governments within walking distance, not to mention high end restaurants and bars. This is especially important to the financial sector. Downtown will always be the choice for industry where face-to-face communication is important.

 

[taal]

I started this off stressing the outer 416 as opposed to the inner 416, where taxes are less relativate for the reasons you state.


Also internationally, Toronto proper's commercial tax rate is not extremely high. The worry about Calgary may be just but there's really nothing that can be done about that, its a very wealthy province, really anywhere in Canada could fear businesses moving there.

It's really the rest of the GTA I think about, and particularly for the outer 416.

 

[Dan416]

A lot of the head office jobs will remain downtown for that reason, but a lot of the back office stuff will continue to leave downtown I'm sure