SkyscraperPage Forum - Canadian Office Space Market

Viewing Page 26 of 31

SkyscraperPage Forum (https://skyscraperpage.com/forum/index.php)

- Canada (https://skyscraperpage.com/forum/forumdisplay.php?f=18)

- - Canadian Office Space Market (https://skyscraperpage.com/forum/showthread.php?t=192174)

Quote:

Originally Posted by WhipperSnapper (Post 5695712)

100 Adelaide is least likely to break ground with Oxford already invested in Waterpark 3. I think it will take several years of sustained activity for it's chances to favourable.

That was my thought as well .. which is unfortunate cause its the most interesting by far !

Any word on Queen Richmond Center ?

It's already under construction....

Quote:

Originally Posted by WhipperSnapper (Post 5695700)

Last I heard it will be a twin. There are many things far worse than a twin of Bay Adelaide. The architecture won't win awards however, the quality is there (especially at street level). The third tower is a go as well so it will be satisfying to finally see an end to the 20 plus years of chain link fences and gravel in the heart of downtown Toronto.

A bloody wasted opportunity is what it is. Toronto doesn't get enough new office developments to warrant duplicating previous ones. :yuck:

Quote:

Originally Posted by caltrane74 (Post 5695779)

It's already under construction....

No not really ... they have not found a tenant yet but they decided to go ahead with the restoration phase in preparation, if they still can't find a tenant by the time that's done I'm sure they'll stop completely.

Could anyone in the commercial leasing industry give an estimate of current ratios of square footage per employee in an average office building in Toronto? I have heard that approximately 200 sq ft per employee is about average, with a touch less, perhaps 150 -175 in downtown towers with a lot of back office tenants.

I ask because if there are approximately 4M sq ft of office space in the pipeline for downtown Toronto, and about 85% (3.4M sqft) of that is leasable space, and if we assume one employee per 200 sq ft, then approximately 17,000 new downtown workers will result from this round of development. That is barring, of course, any existing buildings being demolished to make room for larger towers.

Sounds about right from what I hear/know... although shrinking. Keep in mind that is likely a gross number.

My limited experience

Executive floors run around 200 square feet
Standard floors (e.g. Finance) run around 130 square feet
Back Room (e.g. Technology) would be lucky at 100 square feet.

Hotelling is growing rapidly too. I did it for a year.

Scotiaplaza has been sold.

1.3 Billion Dollars!!!

http://www.theglobeandmail.com/globe...rticle2440355/

Scotia Plaza sells for a record $1.27 billion!

Scotiabank's landmark Toronto tower sells for record $1.27-billion
STEVE LADURANTAYE AND GRANT ROBERTSON
From Wednesday's Globe and Mail

http://www.theglobeandmail.com/globe...rticle2440355/

Bank of Nova Scotia’s landmark red tower in downtown Toronto has been sold for $1.27-billion, the highest price yet paid for a Canadian office building.

After several months on the market and rumours of international interest, Toronto’s Dundee Real Estate Investment Trust partnered with H&R Real Estate Investment Trust to buy the 68-storey tower. The building will be two-thirds owned by Dundee, with H&R holding the remaining interest.

The strength of the Canadian office market, which has rebounded soundly since the recession. The value of high-quality downtown buildings across the country has been rising, as the same low interest rates that are driving home prices higher help property investors outbid competitors for marquee properties.

“This is the largest trade we’ve ever seen for a single asset in this country,” said George Carras, president of real estate analysis firm RealNet Canada. “Investors are chasing the yield these properties offer.”

It’s the second big deal in less than a week, after Boston-based Bentall Kennedy bought the fully leased, 33-storey Bentall V tower in Vancouver for almost $400-million.

Scotiabank occupies 61 per cent of its namesake building in Toronto, with an average lease term of 13.5 years. The Scotia Plaza complex includes the main tower at King Street West and Bay Street, as well as a few smaller structures on the same block.

The complex consists of about two million square feet of space and is 99.5 per cent occupied. Neither purchasers could comment on the deal, since a portion of its financing is through a bought deal that hasn’t closed.

Scotia Plaza’s tower, completed in 1988, is a postmodern landmark in Toronto's core. The red granite spire stands beside the corner of King and Bay Streets, in the heart of the city's financial district, and is one of the most sought-after business addresses in the country.

Scotiabank put the Bay Street tower up for sale in January. Faced with having to drum up more capital to backstop its lending operations to comply with new global banking regulations, the sale of the building was a way for Scotiabank to raise money without having to sell off core banking assets.

Although it was common in decades past for banks to own their headquarters, a series of real estate sales over the years left Scotiabank as the only of Canada’s Big Six lenders to own its headquarters.

It is the second major asset sale by the bank in the past year. In January, Scotiabank sold its remaining 50-per-cent stake in Calgary's Scotia Centre, a 42-storey tower, for $140-million.

Scotiabank sold $1.66-billion worth of shares in February in a bid to boost its capital levels. When that move happened, some analysts figured the bank wouldn’t be under pressure to sell the building if a deal couldn’t be found at an attractive price.

But the sale price exceeded the $1-billion to $1.2-billion most analysts thought the building would fetch.

“[The price] was at the upper end of what people were expecting,” said National Bank Financial analyst Peter Routledge. “It was certainly higher than what we thought they would get.”

The deal is expected to close by June 20, the bank said.

Some exerpts from the June BOMA newsletter

The Big Boom - Is Edmonton’s Office Market Booming?

The current atmosphere in Edmonton’s office market is leading to whisperings of a potential boom. At present, many tenants are looking for expansion space while rental expectations from institutional landlords are increasing. Statistics further the suggestion of a potential boom as vacancy rates in the downtown core continue to edge downwards. Currently, the downtown vacancy rate stands at 7.8%, down from 8.5% last quarter. Decreasing space is leading to increases in lease rates, a trend strongly proven by class AA space which has seen rates rise from $23.40 to $27.25 in the last year alone.

...

The energy sector is also a major contributing factor to Edmonton’s office market. Increasingly, activity levels in this industry have had a direct correlation to demand for office space in Edmonton. As rig activity increases, administrative office requirements for energy companies grow, in addition to those for construction, engineering and professional service firms which also supply the energy sector.

...

In relation to job growth; 2011 saw Edmonton gain a staggering 38,000 jobs, not surprisingly this has had a direct correlation to growth in office space demand. According to the Conference Board of Canada, an annual average of 14,000 new positions over the next four years is predicted in the Edmonton area. Assuming that 12% of all new positions require office space and that each employee would utilize 200 sf, this statistic alone represents a potential average of 340,000 sf in positive absorption annually.

At present, there are only eight properties downtown and six properties in the suburban markets that can offer 30,000 sf of contiguous space. This leaves large use tenants with few options to choose from and a question of whether to relocate to the suburbs; given suburban landlords have downtown grade office space. With Edmonton’s office landscape depicting company expansions, increased economic productivity and strong job growth, signs of an imminent boom are in sight. These indicators, in addition to other market factors, appear to point towards a healthy and robust office market continuing to move forward.

Hopefully Manulife 2 starts off the Boom in Edmonton. Is there a height limit in E-town still? would be cool to see a 200m tower or two.

NAVCAN still has the overlay in tact due to the one operational runway, but the new zoning allows for 150m (same as old) but now up to 200m so long as they get NAVCAN approval. Above that it would be a DC2.

Quote:

Originally Posted by Coldrsx (Post 5718904)

could somewhere like West Edmonton Mall have a 200 m + tower?

Quote:

Originally Posted by Coldrsx (Post 5718904)

When will that last runway close? Any news on Manulife 2? that render we saw a while back looked great!

Quote:

Big leap in office space, big leap in rent

Thanks to demand, the rent in two under-construction office towers will likely be about $10 a square foot more than existing commercial space in downtown St. John’s, but landlords will likely have to get used to competing for tenants again, say local experts.

Charlie Oliver, owner of commercial real-estate firm Martek Morgan-Finch, said the demand for office space downtown — coupled with the absence of any new space available — has driven rents higher over the last few years, and will jump again when two new buildings open in 2014.

And while rising rents are tough on tenants, said Oliver, developers won’t construct new buildings without sufficiently high rents to recoup their investments, and that’s why it has been more than two decades since any new office space was built downtown.

“The numbers weren’t there. So you had buildings like Atlantic Place, which we manage, which had substantial vacancies until it was taken out about seven years ago by Southwest Properties,” he said.
“Since that time, we’ve done a retrofit in the building, leased it up, and it’s taken up an awful lot of the demand, and that was the only supply in the downtown core.”

Now downtown St. John’s has virtually no Class A office vacancy — Class A being a somewhat nebulous industry designation for the newest and nicest office space — and businesses have looked elsewhere: the Tower Corporate Campus on Waterford Bridge Road, for example, or by the Avalon Mall or even out of St. John’s altogether, in Mount Pearl. Now, expected rents are attractive enough for two new buildings, one by Fortis and one by East Port Properties, that will add between 350,000 and 400,000 square feet of office space downtown to the 1.14 million currently available.

Where current Class A rent runs between $18 and $24 a square foot, says Oliver, the new space will likely go for $30 to $35 a square foot.

Despite the pricey premium the new buildings should command, that much new space should help swing downtown’s office vacancy rate to a healthier three to five per cent, which gives tenants options but doesn’t leave landlords with too much empty space.

Neil Hardy, Atlantic vice-president for commercial real estate research firm Altus Group, said despite rising rates, a negligible vacancy rate can cause headaches for landlords, too.

“A lot of tenants, especially long-term tenants, have needs, and those needs can include expansion requirements,” he said.

“So when you have no space whatever for those tenants to expand, it creates quite a bit of frustration for those tenants. So although it’s a good thing to have a full building, it’s not necessarily a good thing in terms of being able to assist your tenants in reaching their spatial requirements.”

And for the tenants, there’s the sticker-shock that results from renewing a lease at a 33 per cent increase in rent from just five years previous.
The jump in rent at the new buildings may mean some market resistance to filling them once they open two years from now, said Hardy.

“But for tenants who are moving in who need large spaces, if you’re looking for anything over 20,000 or 30,000 square feet, there just isn’t anything,” he said.
“So if that situation is still the same in 2014 when these buildings come online, quite honestly, there’s nowhere else to go.”

He thinks that the new buildings will not be fully leased when they hit the market, meaning a temporary spike in vacancy, but he expects the rate to settle around five per cent by 2015. And as landlords look to fill the new spaces, he expects they’ll return to tenant inducements.

“Tenant inducements are active in soft markets, where the landlords are competing for tenants,” he said.

“The tenant inducements could be anything from the landlords taking over the cost of the tenants leasehold improvements, to giving free parking, to giving rent-free periods. For the last three years, we have seen no landlords actively offering tenant inducements, because it’s been such a good market. But I can see in that period from 2014 to 2016, as well as the high vacancy, I foresee that there may be the requirement in the market for the landlords to offer some inducements. It may not be very high, but I think that type of inducement may re-enter the market.”

http://www.thetelegram.com/Business/...leap-in-rent/1

http://www.theglobeandmail.com/repor...rticle4249303/

Quote:

Brookfield to build new tower

Brookfield Office Properties is pushing ahead with a second tower at its Bay Adelaide Centre in the heart of Toronto's financial district, naming Deloitte as its anchor tenant today.

Deloitte has signed for 420,000 square feet, or almost 45 per cent of the what will be Bay Adelaide Centre East.

Will it be of a similar design?

Quote:

Originally Posted by Coldrsx (Post 5731244)

Will it be of a similar design?

As far as we know, identical. It's the slightly shorter one on the left.

http://brookfieldofficeproperties.co....jpg?width=206

196 metres.

Effectively blocking Trump from sight!

Viewing Page 26 of 31