In stark contrast to most North American commercial real estate markets over the past two years, downtown Toronto has been scorching hot.
“We are not only experiencing the largest commercial boom perhaps ever, but the city has become the condominium capital of North America.” says Jeff Howell, partner at Nidea Corporate Real Estate, the Toronto, Ontario affiliate of ITRA Global. Toronto has been shifting to more of a high rise city over the past decade. Intensification policies, climbing gas prices and growing commuting times contribute to this trend, as has the influx of the baby-echo generation. “What is very predictable about 22 year old University graduates is that they all want to live where the action is.” says Mr. Howell. “When you examine how fiscally conservative the banking system has been and the phenomenal growth in the financial sector, it has resulted in banks absorbing more office space and their suppliers following suit. While the market is seeing net absorption of office space, there has been a residential construction boom to house all these new employees. Imagine an office leasing market that adds over 5,000,000 square feet of office space and the availability rate actually drops during that period. Now imagine a city of just 2.5 million with over 170 construction cranes in the sky – that is a very impressive number of cranes per capita.”
While downtown Toronto has been a “landlord’s market”, the suburbs have been a quite different story. “The suburbs have been a much more tenant-friendly market” Mr. Howell adds. “There is a broader base of companies outside of the burgeoning financial services sector and we find more tenants and landlords that struggle a bit more. It is a much easier to task for to find suburban clients suitable space in the suburbs and to find landlords that are much more flexible than the ‘take it or leave it’ approach from many of the downtown landlords.”
Nidea Corporate Real Estate serves as the Toronto, Ontario affiliate for ITRA Global, the largest commercial real estate organization devoted to representing corporate tenants and buyers. With coverage in major markets around the world, ITRA Global consists of seasoned professionals with an average of twenty years experience and is differentiated by its focus on advocacy for the corporate tenant and buyer. Clients benefit by having an experienced professional as their trusted advisor — conflict-free representation with total objectivity.
For more information about the corporate real estate market in the Toronto area, contact Jeff Howell at 1.416.941.9900 or *protected email*