As price tags go, it’s rather impressive: $1.266 billion. That’s how much Scotiabank will be receiving in exchange for its eponymous complex. The centre at 40 King Street West has two new owners: Dundee Real Estate Investment Trust gets a two-thirds share, and H&R Real Estate Investment Trust has picked up the remaining third. That purchase includes several buildings: the 68-storey main tower, the 27-storey older Bank of Nova Scotia building next door, and several adjoining properties—over two million square feet of office space in total.

In a press release issued this afternoon Scotiabank COO Sabi Marwah announced that Scotia will remain in the building as lead tenant; they’ve signed a lease to stay on site in both the modern tower and the older for the next 13.5 years.

Original Article – Torontoist

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Another kick butt video put together by my friends at Crucial Pictures – same group that did the video for Trend Hunter.

What do you think about creating video testimonials like these for your clients as a commercial real estate agent?  In today’s world it’s more than just about the “real estate transaction” – its about accelerating everyone’s success!

Other videos :
Pixel Carve Inc.
Solutia SDO

The static nature of real estate combined with the dynamic nature of technology evolution is that dichotomy that we need to deal with in office design.

Technology is changing how we work. With profiles of new “Workplace of the Future” offices designed for the Burgess Group, United Way for Southeastern Michigan and its own location in Washington, DC, SmithGroupJJR explains that it’s open and team-based, giving a new balance between “I” spaces and “We” spaces. Importantly, organizations that adopt are finding it is fundamental to their future, allowing happier employees, reduced real estate costs and competitive advantage.

To search for your new office space in Toronto try OfficeZilla!

In the operating expense provisions of an office lease you may come across wording that allows the landlord to “gross up operating costs which vary with the use and occupancy of the rentable premises in the Centre as if the property were 97% occupied and operational.”

These costs are generally cleaning, waste removal, utilities and management fees if based on a % of operating costs. Leases allow these costs to be grossed up to a range of 95% to 100% occupancy.

On the surface, allowing the landlord to charge for more expense than they incur seems absurd. However, the concept is fair to the landlord – yes, you read that right – and fair to the tenant.
An extreme examplele to illullullustrate the point:
Assume there are two tenants in a 100,000 sq. ft. office building, Tenant A and Tenant B, who occupy 50% of the space each. The cleaning costs are $1 per sq. ft. per annum, or $100,000. Cleaning contracts allow vacancy credits to be given to the landlord if tenant(s) vacate the premises.

Now let’s say Tenant B vacates the premises for a full year, reducing cleaning costs to $50,000. Without a gross up, Tenant A would now pay 50% of $50,000, equalling $25,000, even though they are responsible for 100% of the cost. The landlord would be out of pocket $25,000. Grossing up the cleaning expense to 100% allows the landlord to recover all of its costs.

Lost in translalation
Where this concept often breaks down is in the calculations used by landlord administrative staff. We have seen situations where incorrect calculations have resulted in tenants paying more on those variable expense items than if the Centre were 100% occupied.
For example, occupancy has no bearing on labour or utilities for the lobby, elevators, outside areas, or other common areas. Even vacant leaseable premises require a minimum of heat in the winter.
A Colliers audit on a 7,000 s.f. office space in Ottawa netted a $32,000 recovery for our client. The landlord had applied gross up calculations to the utilities on vacant space. However, they had continued to cool, heat and light the vacant premises as though they were fully occupied in order to make the marketing and showing of the space more appealing.

Finally, vacant space rarely remains so for a full year and appropriate calculations are required to ensure the gross up is applied only to the time the space was vacant.

REMEDY
Have the ‘right to audit’ written into the lease agreement in order to ensure that the grossing up is done correctly. Clear, concise lease language such as the following is also essential:
“The landlord is entitled to gross up those items of operating costs which vary with the use and occupancy of the rentable premises in the Centre as if the Centre were (% rate to be negotiated) occupied and operational. For greater certainty the variable costs are cleaning and utilities. In no event shall the tenant’s proportionate share of the variable expenses be greater that would be payable if the property had been fully rented.”

For Additional Information Contact:
Frank Iannarilli
Director, Lease Audit
416.620-2876
frank.iannarilli@colliers.com

Another great deal done with http://solutia.ca/ – Get more out of your agent and your space!

Solutia SDO is an independent management consulting firm, owned and operated by seasoned professionals. We provide our clients with the skills, expertise and services offered by large consulting firms, but with one major difference — you can expect a better return on your investment.

What’s your commercial real estate agent ever done for you?

Stollery’s at the southwest corner of Yonge and Bloor streets

If this is true it would really shake up the market.  How much would Apple pay for such an amazing flagship store?

Could it end up looking like the store in New York below?

If you haven’t seen The BizMedia’s office space at 119 Spadina Avenue you should check it out.  They’ve been doing some really creative things.  Check out this video of how they decided to decorate their office space.