The HUB | 257.85m | 57s | Oxford Properties | Rogers Stirk Harbour

SOS_Urbanist

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High hopes for this one. It's fairly respectful of the harbour building and overall I find the design progressive for Toronto. For myself it represents the last piece of the railway lands to be developed.
Block 36North in City Place (behind the Context Developments site) would like a word with you ;) Hopefully we can get something great there too!
 

rbt

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Yep, no lease here yet. And I doubt Oxford will go ahead on spec in this market.

It does seem unlikely. Anyone know if their "Districts on 10" space in Royal Bank Plaza has tenants? Or if their 25,000 sqft space of similar design started construction (or was that space to be within The Hub?)
 
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travis3000

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I have very low confidence in any new office projects in this environment. With CIBC Square, 160 Front, Bay Adelaide N, The Well Office Tower, and 16 York all under/construction or just finished, as well as a few other smaller towers under construction, there's going to be quite a bit of space come available over the coming 2-4 years.

I personally can't see an appetite for another big office tower whether it be The Hub, Union Centre, or CC3. Maybe I will be proved wrong.
 

WeirdFishes

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I have very low confidence in any new office projects in this environment. With CIBC Square, 160 Front, Bay Adelaide N, The Well Office Tower, and 16 York all under/construction or just finished, as well as a few other smaller towers under construction, there's going to be quite a bit of space come available over the coming 2-4 years.

I personally can't see an appetite for another big office tower whether it be The Hub, Union Centre, or CC3. Maybe I will be proved wrong.
It is a risk, 100%, who knows how WFH will adjust longterm.
 

The Preservationist

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I've certainly lived through worst times but never such uncertain times. We've artificially significantly reduced the size of the economy, what effect that has long term who knows, it's unprecedented. Most companies are stuck in the position of whether to lay off personnel and pay the severance packages or wait and see if it's worth running at a loss and retain the staff. This could go either way. The economists are talking a probable 3 year pause for things to get on track. Usually need a few solid quarters on top of that before people start talking expansion. It's most probable this one will get built but I doubt anyone including Oxford knows when.
 

AlbertC

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I have a friend who works at RBC in the downtown core and they anticipate that around 5% of staff will work in office on a rotational basis this Autumn until the foreseeable future. A potential full return to regular office routine is left very open ended, as it's pending on many different factors including long-term WFH options.
 

crumplescotch

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I have very low confidence in any new office projects in this environment. With CIBC Square, 160 Front, Bay Adelaide N, The Well Office Tower, and 16 York all under/construction or just finished, as well as a few other smaller towers under construction, there's going to be quite a bit of space come available over the coming 2-4 years.

I personally can't see an appetite for another big office tower whether it be The Hub, Union Centre, or CC3. Maybe I will be proved wrong.

I have to agree with the other replies here. 'WFH for the majority of employees' type of model probably wouldn't stick around for long. There's a relatively fresh IT industry with giants like Amazon/Google requiring their employees to be physically present in their offices knowing full well they can do all their work from home without any problems. Silicon Valley is obsessed with the idea of 'boarding school' type of offices where their young employees practically never leave the grounds of their massive office complexes where everything is included - food, leisure, socialization, housing, etc. They are actively building them in the middle-of-nowhere Valley so that there is never a desire/need to go somewhere else. The reason behind it is that it's not about technology allowing or not allowing to fully work from home, it's about control, management (or rather micromanagement) of the employees, always has been. Physical presence of the employees, control of their movements, at least for some time, is imperative to that.

It's not like smaller tech companies or startups aren't fully working from home but at the end of the day their goal is to grow into that typical large tech company based in the Valley with a campus-like office.

Anyway, philosophical talk aside, I feel like the investors know full well that offices aren't going anywhere anytime soon, so the appetite won't go anywhere either, even with COVID they will eventually find a way to make everyone go back to the office. Unless some fully blown sci-fi surveillance chip planted directly into employee`s brain is invented the offices are here to stay, that's why commercial real estate wasn't exactly slowing down like everyone anticipated it would.

With the ever-growing Toronto population and all the uncertainty in the States I'm fairly confident that office vacancy will remain fairly low if not the lowest on the continent.
 
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pw20

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I have to agree with the other replies here. 'WFH for the majority of employees' type of model probably wouldn't stick around for long. There's a relatively fresh IT industry with giants like Amazon/Google requiring their employees to be physically present in their offices knowing full well they can do all their work from home without any problems. Silicon Valley is obsessed with the idea of 'boarding school' type of offices where their young employees practically never leave the grounds of their massive office complexes where everything is included - food, leisure, socialization, housing, etc. They are actively building them in the middle-of-nowhere Valley so that there is never a desire/need to go somewhere else. The reason behind it is that it's not about technology allowing or not allowing to fully work from home, it's about control, management (or rather micromanagement) of the employees, always has been. Physical presence of the employees, control of their movements, at least for some time, is imperative to that.

It's not like smaller tech companies or startups aren't fully working from home but at the end of the day their goal is to grow into that typical large tech company based in the Valley with a campus-like office.

Anyway, philosophical talk aside, I feel like the investors know full well that offices aren't going anywhere anytime soon, so the appetite won't go anywhere either, even with COVID they will eventually find a way to make everyone go back to the office. Unless some fully blown sci-fi surveillance chip planted directly into employee`s brain is invented the offices are here to stay, that's why commercial real estate wasn't exactly slowing down like everyone anticipated it would.

With the ever-growing Toronto population and all the uncertainty in the States I'm fairly confident that office vacancy will remain fairly low if not the lowest on the continent.

Facebook will permanently embrace remote work, even after coronavirus lockdowns ease, Mark Zuckerberg told employees on Thursday, accelerating the tech sector’s geographic diversification away from its home in Silicon Valley.

Twitter says staff can continue working from home permanently

Shopify has laid off internal operations staff as the Canadian tech giant shifts to a permanent remote work model, BetaKit has learned.
 

crumplescotch

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All I see is an immediate reaction to COVID, cost savings, lay offs and things like that. You really don't have to be an expert to understand what this type of corporate speech really means:

So if our employees are in a role and situation that enables them to work from home and they want to continue to do so forever, we will make that happen. If not, our offices will be their warm and welcoming selves, with some additional precautions, when we feel it’s safe to return.

Or this:

But I think that it’s possible that over the next five to 10 years – maybe closer to 10 than five, but somewhere in that range – I think we could get to about half of the company working remotely permanently.

Or that:

On its recent Q2 2020 financial call, Shopify CFO Amy Shapero said the company was “exiting” its office locations in some regions. Shapero provided no specifics on which locations, and a spokesperson later told BetaKit that the company is “committed to retaining a physical presence in each major city that we currently have spaces in, which includes Ottawa, Toronto, Waterloo, Montreal, Vancouver as well as locations in New York City, San Francisco, Los Angeles, Stockholm, Vilnius and Berlin.”

They laid of like 50 people, add this to the fact that Shopify still wants to move into the Well after all the big talk:


And you'll get exactly what I was talking about: some corporate BS talk for people who don't know how they usually operate. Despite having some staff working from home 99% of the time all of their higher ups, managers and seniors are very much expected to show up physically in the office. I see no major changes in their work model after reading these articles, sorry.

The Valley trend with boarding schools for offices ain't going nowhere either:


I would also like to remind the importance of overseas outsourcing/outstaffing as well, it's widely known that Facebook's operation heavily relies on overseas companies, I really wouldn't be too surprised to find out that when it comes to actual production somewhere in a range of 50% of it is done somewhere outside of their offices, so it technically does mean that around 50% of their staff is "working from home" as in "from their home country, outside the Facebook office".
 
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pw20

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All I see is an immediate reaction to COVID, cost savings, lay offs and things like that. You really don't have to be an expert to understand what this type of corporate speech really means:



Or this:



Or that:



They laid of like 50 people, add this to the fact that Shopify still wants to move into the Well after all the big talk:


And you'll get exactly what I was talking about: some corporate BS talk for people who don't know how they usually operate. Despite having some staff working from home 99% of the time all of their higher ups, managers and seniors are very much expected to show up physically in the office. I see no major changes in their work model after reading these articles, sorry.

The Valley trend with boarding schools for offices ain't going nowhere either:


I would also like to remind the importance of overseas outsourcing/outstaffing as well, it's widely known that Facebook's operation heavily relies on overseas companies, I really wouldn't be too surprised to find out that when it comes to actual production somewhere in a range of 50% of it is done somewhere outside of their offices, so it technically does mean that around 50% of their staff is "working from home" as in "from their home country, outside the Facebook office".

Agree to disagree. The grand COVID WFH experiment has proven what companies like Basecamp, Zapier, have been advocating for the last few years: a digital first, hybrid environment works and can actually help attract and retain talent. Regardless of COVID employees will be allowed, if they want, to work remotely permanently. Maybe it'll be 60%, maybe 75%, but the days of having your entire team (or 95% of your employees) in one physical location are over. This disruption has been accelerated by COVID, but has been made possible by better collaboration tools (Asana, Slack, Zoom). Tech companies have found that remote can help with: retention, diversification of talent pool, as well as employee satisfaction. I work for a mid-sized tech company and we, and many of our peers, competitors, and partners, are all thinking about the future of our offices in VERY different ways. e.g. we're planning on doubling our staff over the next 12 mo - we haven't spoken about doubling or even increasing our floor plate.

As for the large tech companies (Facebook, Google, Amazon) they are indeed building and buying more office space, but similar to Shopify, are they acquiring more office in concert to their employee growth? Take Shopify as an example: they are indeed moving in to The Well - but given that their headcount has increased by 25% ever year for the last 4 years, are they growing their space by 25-50%?

Right now Shopify has 700,000 square feet committed across 4 Ottawa and Toronto offices (Laurier, Elgin, King and Spadina). When their Well office opens in 2022, they will have 750,000 square feet across both cities which is an increase of 50k square feet (altho they have an OPTION for more space that they haven't full exercised). That's NOT a significant increase of square footage given their growth.
 

afransen

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Interesting to think what this does to long term regional transportation planning. You should expect to see less peak period travel for work. But maybe you will see more mid-day trips? I could see working a few hours remotely in the morning and going in to the office off-peak for a workshop, etc. while traffic is light.

My sister has been WFH for 5 years or so. The multinational she works for eliminated her department (brought the function back to US HQ) but retained her for international projects, so her reporting structure was in the US and she worked with people all over the world. She still went to the office now and then to retain some connection to the remaining office in Canada. They had some bizarre ritual of a teleconference call from the Canadian office with the US head office at 7:30 am every week or two so she had to get up quite early to make it in for that, just to appear on a webcam (bizarre). I suggested she go in mid-day (avoiding the 30+ minute traffic delay) to meet people etc but she was worried about optics. Never mind that she was up most days at 3 am for conference calls with Europe.

My employer is pretty vague about full-scale return to office. Currently they are allowing some people who either have difficult work from home situations or need resources at the office to come in (<5%). I don't expect we'll be back to 50% office occupancy before end of year. They have said they don't expect vast majority to be fully work from home as they worry about culture and making connections. We'll see.
 

Northern Light

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Agree to disagree. The grand COVID WFH experiment has proven what companies like Basecamp, Zapier, have been advocating for the last few years: a digital first, hybrid environment works and can actually help attract and retain talent. Regardless of COVID employees will be allowed, if they want, to work remotely permanently. Maybe it'll be 60%, maybe 75%, but the days of having your entire team (or 95% of your employees) in one physical location are over. This disruption has been accelerated by COVID, but has been made possible by better collaboration tools (Asana, Slack, Zoom). Tech companies have found that remote can help with: retention, diversification of talent pool, as well as employee satisfaction. I work for a mid-sized tech company and we, and many of our peers, competitors, and partners, are all thinking about the future of our offices in VERY different ways. e.g. we're planning on doubling our staff over the next 12 mo - we haven't spoken about doubling or even increasing our floor plate.

As for the large tech companies (Facebook, Google, Amazon) they are indeed building and buying more office space, but similar to Shopify, are they acquiring more office in concert to their employee growth? Take Shopify as an example: they are indeed moving in to The Well - but given that their headcount has increased by 25% ever year for the last 4 years, are they growing their space by 25-50%?

Right now Shopify has 700,000 square feet committed across 4 Ottawa and Toronto offices (Laurier, Elgin, King and Spadina). When their Well office opens in 2022, they will have 750,000 square feet across both cities which is an increase of 50k square feet (altho they have an OPTION for more space that they haven't full exercised). That's NOT a significant increase of square footage given their growth.

I don't think there's any question that some portion of the office-based (non-public facing) workforce will shift to WFH at least some of the time, and for a portion, most of the time.

But I don't see the % being all that high.

I work with some very large employers with large commercial offices in DT.

Most are not as WFH as you might think, even now. I'm seeing around 15-25% occupancy in offices.

But they're also finding it awkward for many functions.

Collaborating over Zoom when you need to draw on a white board, or have everyone look at a powerpoint while being able to raise a hand and ask a question.......

Lots of these jobs require face-to-face contact.

I expect some shift, what percent is TBD...........but I can't imagine it being 30%+ in the medium term.

As to Toronto's office scene........stay tuned.
 

afransen

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One thing I've noticed is that one a critical mass is attending meetings virtually, it is almost pointless to be in the office. You could be doing zoom calls from your (socially distanced workstation) with a number of people in the building and at home. Meanwhile, a large part of the office is being renovated to a hot desk arrangement, which was planned beforehand but seems timely. Only problem is the workstations are individually closer together, which means only half or less can be used to maintain distance with the reality of COVID. I wonder how many people with coughs and sniffles will still come it. I think you'll be getting hard looks from your coworkers if you do that for the next year or two.
 

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