Posted: Jan 23, 2012, 7:07 PM
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Join Date: Jun 2007
Location: City of Bagels
Originally Posted by Vaillant
Vacancy rates near 2008 peak of five per cent
BY ROBERT GIBBENS, SPECIAL TO THE GAZETTE OCTOBER 21, 2011
STORYPHOTOS ( 1 )
Montreal office space vacancy rates at 6.1% down from 8% in 2010.
Photograph by: Allen McInnis, The Gazette
MONTREAL - Almost 900,000-square feet of downtown Montreal office space has been absorbed in the past 12 months, lowering average vacancy rates to 6.1 per cent from eight per cent and bringing the market near the 2008 peak of five per cent, says Jean Laurin, CEO of Newmark Knight Frank Devencore.
“We’re seeing a big variety of pre-development activity for the first time since 2004, as Cadillac Fairview seeks anchor tenants for a 500,000-square-foot tower, two other projects around Place Victoria take shape, and the move by Rio Tinto Alcan from Sherbrooke St. nears” he said.
But though business confidence has returned after a disastrous 2010, another early ’90s boom when 1250 René Lévesque and 1000 de la Gauchetiere rose to rival the Place Ville Marie and Place Victoria is most unlikely, he said.
Devencore’s latest survey confirms blocks of 100,000-square feet or more are rare – existing in only three or four major buildings. This, along with low interest rates and municipal incentives, is driving the upturn and prompting tenants with leases coming up for renewal to begin talking 12 to 18 months before termination.
The downtown market covers 46.2-million square feet of Class A and Class B space. In 2010, in the recession’s hangover, vacancy rates rose to eight per cent – meaning more than 3.5-million square feet of space was available for lease or sublet.
For Class A space alone the vacancy rate has dropped to 6.1 per cent from 6.8 per cent in six months; B class vacancy rate has fallen to six per cent from 8.5 per cent.
In the McGill College corridor, the combined A and B vacancy rate had climbed to 19 per cent in mid-2010. The current 8.5 per cent is partly due to the arrival of Astral, Desjardins and RSM Richter.
Cité du Multimedia’s vacancy rate has dropped from 36.6 per cent to 25.8 per cent – provincial employee tax credits ran out, worsening the recession’s impact.
Devencore said the René Lévesque corridor vacancies have dropped to six per cent from seven per cent and Sherbrooke Street is steady at 7.7 per cent.
Devencore is the Canadian arm of the international Newmark Knight Frank based in New York and one of the world’s biggest property advisers and brokers with 240 offices worldwide.
© Copyright (c) The Montreal Gazette
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So, in a couple years we can expect a 30-something floor office tower go up. This will be the extent of Montreal's "office boom".
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