chris@officesearchtoronto.com

Mind-Blowing New Office Space is Floating on Peter Street

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It’s rumored that the building is nearly full. As we tell all the Landlord’s we represent – if you start to build it (well), they will lease. Entertainment One, Sapient and now L’Oreal all rumored to be tenants. For more of the inside scoop on this building, give us a call at 416-643-3713.

 
http://www.qrcwest.com/
http://www.urbantoronto.ca/database/projects/qrc-west-queen-richmond-centre-west
Lots of results via Google!

QRC West Time Lapse from Allied Properties REIT on Vimeo.

Location Supersedes Space as Key Driver to GTA’s Office Market Activity

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While Colliers’ latest office report offers up no real surprises, the unexpected may still be coming down the road when new inventory in the pipeline takes root in the market, executive managing director John Arnoldi tells us. The study showed that Toronto’s office market continued to thrive during Q1 ’14, particularly the downtown core. The average vacancy rate across the GTA dropped by two basis points to 5.8%, while average asking rent inched up from $18.48/SF at the end of 2013 to $18.60/SF. A big trend: taking smaller office space in premium locations, John says. Activity in the downtown core was fueled by financial, insurance, and tech tenants.

- Premium location and smaller footprints to dictate office market trend in the coming years

- Migration of tenants from suburbs to downtown may cause market imbalance

- Industrial market benefits from retail resurgence

Toronto’s office market continued to thrive during the first quarter of 2014, especially in the downtown core area according to Colliers International’s GTA report released today. The average vacancy rate across the GTA dropped by two basis points to 5.8 percent quarter-over-quarter, while the average asking net rent inched upward from $18.48 per square foot at the end of 2013 to $18.60 per square foot during the first three months of the year. However, the Colliers report forecasts a possible reverse trend in vacancy rates in the coming years as tenants start shifting their focus and demand to premium location over office size, a trend that is increasingly gaining ground in the city.

“Our research shows the emergence of a few trends that have the potential to re-shape the future of the GTA’s office market,” says John Arnoldi, executive managing director, Toronto Region with Colliers International. “Firstly, the migration of suburbs and uptown tenants south along public transportation lines, coupled with demand for smaller parcels of office space in premium locations, are likely to push vacancy rates in other sub-markets upwards. Additionally, there is a pipeline of 5.4 million square feet of office space under construction in the GTA.”

GTA Office Market Trends and Forecast

 | Office Space Toronto | Commercial Real Estate Toronto

The downtown core has been a strong performer during the first quarter of the year. Activity was fueled by financial, insurance and tech tenants looking to upgrade to newer and more efficient space. Vacancy rates in this sub-market fell below four percent (3.8 percent down from 4.1 percent) for the relevant quarter, especially in the downtown west area (2 percent in Q1 2014, down from 3.6 percent in Q4 2013). However, as new supply is expected to become available, these low vacancy rates are expected to rise.

“The big question mark that is lingering over the GTA office market stems from the origins that will absorb the new supply of space. A balanced absorption from various markets across the GTA is not likely going to significantly affect market fundamentals and performance over the long-run. However as an example, an exodus of a large number of tenants from select markets into downtown may cause a spike in vacancy rates elsewhere and stimulate market imbalance,” adds John Arnoldi.

Toronto office market report q1 2014 from Chris Fyvie

Top 10 Success Strategies for Commercial Agents

Michael Bull, commercial real estate brokerage veteran, certified instructor and host of the show, shares his top ten success strategies for commercial agents and brokers to be successful, and the traits to look for when you pick a broker.

These success strategies work well for most sales professionals and business owners in any profession. Understanding these strategies may also help you choose third party professionals for your endeavors.

 

Top 20 posts about Toronto from BlogTO

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These are the top 20 posts from BlogTO for 2013. Not all real estate but some interesting stuff!

20. Photos show Rob Ford meeting with alleged drug dealer
19. New fantasy map imagines the TTC network in 2054
18. Letterman gets celebrities to do their best Rob Ford
17. Watch the Rob Ford re-election campaign video
16. The top 10 Rob Ford videos of all time
15. Gawker says it’s seen video of Rob Ford smoking crack
14. Big budget TV show liquidates its wardrobe & props
13. 30 photos of naked people riding bikes around Toronto
12. Rob Ford admits he smoked crack cocaine
11. Toronto to get $500 million bike lane network
10. 8 Hamilton restaurants & food shops worth driving for
9. Dean Blundell Show suspended by 102.1 the Edge
8. The top wing night deals in Toronto by day of the week
7. New map charts Toronto neighbourhoods by stereotype
6. 25 photos of the new Ripley’s Aquarium in Toronto
5. Jon Stewart weighs in on Rob Ford’s latest gaffe
4. Photos of the 2013 Toronto ice storm
3. 10 quirky things you might not know about Toronto
2. Daily Show parody of Rob Ford might be best yet
1. Massive rain storm hits Toronto causing flooding and power outages

Toronto shared office space by neighbourhood

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Original Article – BlogTO

Leasing office space in Toronto can pose a serious challenge for those ready to make the jump from working in cafes or for the small company that needs bigger digs to support a growing business. Availability isn’t really the issue. There’s plenty of office space in the city, but looking for space usually means weeding through options that don’t fit the basic criteria you’re looking for like the desire for a post and beam space, an office neighbour that does (or doesn’t) have an outdoor putting green, or easy access to indie cafes and lunch spots.

From major corporate landlords to smaller, shared workplace operations, there are many options available to those looking for an office in Toronto. We’ve already rounded up some of the top shared office spaces, but given the importance of neighbourhoods when deciding where to locate a company, we’ve broken down the options (both shared and otherwise) available in six key areas in Toronto so as to highlight what each has to offer the prospective renter.

FINANCIAL DISTRICT / SOUTH CORE

Naturally, this is the most densely populated area of the city for office space, and is home to the head offices of most of Canada’s major banks. The benefits of the area are obvious: excellent transit options, tons of nearby retail and restaurants, and the handiness of the PATH in the winter. All of these amenities will, however, cost you. The Financial District is the most most expensive area to lease office space in the city.

Types of Office Stock: Primarily mid and high rise buildings, mostly newer construction (post 1960s), class AAA, AA, A, B and C product.

Types of Companies: Dominated by banking, financial services, insurance, accounting and law firms. Home to the third largest stock exchange in North America. Examples: Big five banks, GWL, Sun Life, KPMG, PWC, etc.

Cost per sqft / Range of Gross Rent: $35 PSF to $85 PSF

Transportation options: Close connections to subway and streetcar lines as well as Union Station / GO Train services.

Indie coffee shops: The Dineen Coffee Company, Sam James PATH

Favourite lunch spots: The Chase Fish & Oyster, Drake 150, The Gabardine, Mercatto (Bay St), Bannock, Bymark, Canoe.

Shared Office Options: Home to the highest concentration of shared/serviced office options in the GTA, including iQ Office Suites (photo above), Regus, Intelligent Office and others.

Full Lease Office Options/Dominant Landlords: Oxford, Brookfield, Cadillac Fairview, GWL, Bentall & Dundee.

LIBERTY VILLAGE

Once a major manufacturing hub, Liberty Village was transformed in the 1980s when dot com startups set up shop in vacated warehouses and factories. The last decade has seen profound residential growth in the area in the form of a condo boom, but the west end of the neighbourhood is still home to many technology and design firms. Retail and food options have increased in lockstep with the population growth.

Types of Office Stock: Mostly large and small historic/character buildings converted to office space.

Types of Companies: Primarily technology, advertising, design and creative companies. Examples: Softchoice, Cossette Advertising, Tucows, etc.

Cost per sqft / Range of Gross Rent: $26 PSF to $45 PSF

Transportation: Located on the King streetcar line with access to Exhibition GO Station.

Indie coffee shops: Balzac’s, The Abbott

Favourite lunch spots: Origin Liberty Village, Mildred’s Temple Kitchen, 25 Liberty, Caffino.

Shared Office Options: The Fueling Station

Full Lease Office Options/Dominant Landlords: York Heritage, Allied REIT and Lifetime Group.

FASHION / ENTERTAINMENT DISTRICT

Once home to textile factories and other clothing-related manufacturing, the area along Spadina from King St. to Chinatown and along King West is home to plenty of big players in the technology and web game, as well as a host of shared office space options. Much of the office space can be found in re-purposed heritage buildings.

Types of Office Stock: Primarily large and small historic/character buildings converted to office space.

Types of Companies: Technology, advertising, and professional services. Examples: Ebay, Rogers Media, Desire2Learn, and AOL.

Cost per sqft / Range of Gross Rent: $30 PSF to $50 PSF

Transportation: Accessible by multiple streetcar lines (King, Queen, Spadina).

Indie coffee shops: Dark Horse, Jimmy’s Coffee, Sense Appeal, Thor Espresso

Favourite lunch spots: Buca, Gusto 101, O&B Canteen, The One That Got Away, Fresh, Tutti Matti

Shared Office Options: Regus, CSI, Workplace One

Full Lease Office Options/Dominant Landlords: Allied REIT, WTF Properties and Capitol Properties.

CORKTOWN / DISTILLERY DISTRICT

This area is set to witness a major spike in office space with the construction of the King East Centre (500,000 square feet of office space), which will be home to The Globe & Mail. It’s also experiencing a residential building boom, as work continues on the West Don Lands development. Although the overall demand for office space in Toronto is expected to soften over the next two years, that won’t be the case here.

Types of Office Stock: Small and medium sized historic buildings with some new construction buildings.

Types of Companies: Film, technology, professional services companies. Examples: Technicolor, Autodesk, SAS, Toronto Sun, and soon The Globe & Mail.

Cost per sqft / Range of Gross Rent: $25 PSF to $50 PSF

Transportation: King and Queen streetcar lines.

Indie coffee shops: Rooster Coffee House, Black Canary Espresso, Academy Cafe, Balzac’s

Favourite lunch spots: Petit Dejeuner, George Street Diner, Fusaro’s, Gilead Cafe

Shared Office Options: Workplace One, 7 Labatt Place

Full Lease Office Options/Dominant Landlords: Allied REIT, Dundee, Manulife and First Gulf.

YONGE & EGLINTON

Already a well-serviced neighbourhood as far as transit and retail goes, the arrival of the Crosstown LRT in the next half decade will likely make office space in the Yonge & Eglinton area even more lucrative than it is currently. Home to a concentration of mid-sized office buildings, the area houses a diverse array of companies, most of which are well established.

Types of Office Stock: Primarily medium sized office buildings built between 1950s & 1970s.

Types of Companies: Professional services, insurance & technology companies. Examples: CGA, Facebook, Maritime Life, Heart and Stroke Foundation, and Ontario Energy Board.

Cost per sqft / Range of Gross Rent: $30 PSF to $45 PSF

Transportation: Accessible by subway and bust (with LRT on the way).

Indie coffee shops: De Mello Palheta

Favourite lunch spots: Grazie, La Vecchia, Grano.

Shared Office Options: Intelligent Office, 120 Eglinton Business Centre.

Full Lease Office Options/Dominant Landlords: RioCan, Davpart, Adgar Investments and Madison Properties.

BLOOR / YORKVILLE

Although not as densely populated as the Financial District, Yonge & Bloor remains one of the prime destinations for large companies to take space based on transit accessibility, the sheer amount of office stock, and the plentiful amenities in the area. It’s also cheaper than the Financial District, but doesn’t give much away in terms of conveniences.

Types of Office Stock: Mixture of large and medium office buildings.

Types of Companies: Professional services, advertising and technology companies. Examples: Canon, JWT Canada, Shaw Communication, Alliance Atlantis, Citco, and Unilever.

Cost per sqft / Range of Gross Rent: $30 PSF to $50 PSF

Transportation: Ideal transit accessibility at the junction of two subway lines.

Indie coffee shops: Seven Grams, Yorkville Espresso Bar, Balzac’s

Favourite lunch spots: Asuka, Mela Italian, Sushi Inn, Xtreme Taste

Shared Office Options: Regus, Intelligent Office

Full Lease Office Options/Dominant Landlords: Morguard, Brookfield, Oxford and CREIT

After Summer To-Do List for #CRE Brokers

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Once the summer ends and the kids go back to school the commercial real estate market typically picks up again. With that in mind, I’m going to focus on the following to-do list until we hit our next real break in December. Time to hit the phones.

My #CRE to-do list:
• Have a written 1, 5,and 10 year life vision
• Give “WOW” client service
• Keep involved
• Network
• Prospect Daily
• Keep your pipeline full
• Follow up
• Follow through
• Use a marketing calendar
• Set goals- review daily, weekly, monthly, quarterly
• Time block
• Work only with ideal clients
• Give referrals
• Ask for referrals
• Continuing education
• Have a Coach
• Don’t burn out
• Take vacations
• Delegate
• Avoid interruptions
• Have life balance
• Hang out with other successful professionals
• Avoid losers, whiners, complainers
• Read trade journals
• Write
• Read your local newspaper
• Review this outline regularly
• Work on your business, not just in it
• Attend workshops
• Improve your skills
• Join professional organizations

Do you have anything to add? Let’s hear it!

The Changing Work Environment

Why today’s real estate choices will affect your future business.

The next evolution of the workplace is underway. The office now plays a vital role in a company’s ability to attract and retain talent, breed innovation and do more with less.

Traditionally, employees were restricted to a physical office, but today, the office can be accessed through the palm of your hands. This paradigm shift is ongoing and change is inevitable for companies to stay competitive. In the next decade, savvy business leaders will be focused on three connected factors driving change in the workplace:

  • Talent Attraction and Retention

  • Productivity: Innovation Through Collaboration

  • Technology: Doing More With Less

 

Talent Attraction & Retention
Gen Y: Get Ready, They’re Here

Gen Y, Millennials, Echo Boomers – no matter what you call them, most agree that they are a force to be reckoned with. In less than a decade, they will make up nearly half of Canada’s workforce and are already driving a major shift in ideas as to how and where we work.

Gen Y (most commonly referred to those born between 1981 and 2000) represent the future of our workforce. With a preference for flexible hours, and a need for work-life balance, Gen Y can sometimes be perceived as lazy, unprofessional and having a sense of entitlement. However, reality has shown they are dedicated and hard-working, with the majority of them growing up using technology and willing to work anytime and anywhere.

In a recent survey conducted by Odgers Berndtson, only 41 percent of global executives said they are prepared for the cultural changes that will take place as these generations replace current leaders. However, the majority of the respondents agreed that their organizations are willing to make the necessary changes in order to attract the best talent.1

Since 2011, Canada has seen more employees leaving the workforce than entering it,2 which takes the “war for talent” to a whole new level. Understanding what motivates Gen Y, and putting the framework in place to deliver on it, will give companies a considerable edge over their competition.

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In terms of the workplace, Gen Y has different needs than previous generations:

  • Central location

    Gen Y choose where they want to live, and then, where they want to work. Often choosing not to own a vehicle, easily-accessible locations are paramount to this generation. Over the last few years, several companies have relocated to more central areas near transit hubs, including Telus, Coca-Cola, and Google, all opening additional offices or relocating their suburban offices to Downtown Toronto.

  • Flexibility

    Gen Y value the independence and flexibility of working where and when they choose, both in and out of the office.

  • Connectivity

    Gen Y have grown up with a constant connection to others through social media and other outlets. They value a workplace that enables open collaboration and social interaction.

Currently, many managers are trying to keep up with the workforce changes. With Baby Boomers, Gen X and Gen Y all in the workplace at the same time, and all with very different needs and expectations, the rate of change has been somewhat tempered by this clash of cultures. Considering Gen Y are already here, planning now for the future is critical.

Take Action: Profile your employees to understand generational composition. Employee surveys are a great tool to gather insight on wants and needs.

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Productivity
Innovation Through Collaboration

In the past, maximizing profits depended on the implementation of ‘systems’ and ‘stream-lined’ processes that got things done better, faster, and cheaper. Only recently have those ideas started to change. Employers have begun to realize that happy, healthy and stimulated employees and an improved office culture directly affect productivity, frequently leading to more innovation and ultimately to business growth.

Successful companies are now viewing real estate as more than just office space, realizing that having dynamic office space creates a competitive advantage. High-tech firms are making headlines with trendy workspaces that include mini-golf courses and video games scattered throughout the office. However, behind the fun and games, there are very sophisticated design principles at work to ensure that these offices not only support collaboration and creativity, but breed it. Research has shown that “the average worker only sits at their desk around 35 percent of the time,”4 leading to more emphasis being placed on communal areas including lounges, kitchens, brainstorming spots and even spaces designed to simply allow for casual interactions.

Take Action: Review departments and functions to determine which would benefit from specific workspaces to increase team collaboration, casual meetings, and multi-media conferencing.

Technology
Doing More With Less

Telecommuting (or teleworking) is a trend on the rise and although it doesn’t work for all companies, certain industries are benefitting from a large boost in productivity and reduced costs. In addition to the flexibility it offers employees, there are increased cost savings to the employer as well.

Advances in technology have allowed us to not only access files and documents from outside the four walls of the office, but to have face-to-face meetings on a national or international basis with virtual meeting software or even apps on your smart phone. While nothing will ever replace the in-person feel, the cost and time savings in using this technology are unquestionable.

In cases where employees work both remotely and on-site, hoteling stations can be arranged to make better use of a company’s floor plan, resulting in a smaller footprint per person in the office and allowing additional costs to be allocated to common area space.

Colliers projects that by 2018, square feet per employee bench-marks will fall as low as 145 square feet, compared to today’s average of 172 square feet per person. Despite a decrease in individual space requirements, the need for additional meeting rooms and common areas has kept the total amount of space required from plummeting.

Take Action: Technology enables mobility, mobility enables shared workspaces, and shared spaces result in a decrease in square footage per employee. Evaluate how current office space is being used to ensure maximum efficiency.

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Final Thoughts

Business leaders today have a lot to consider when planning the future of their workplaces – how can they leverage real estate to act as a tool not only to attract and retain talent, but also as a means of boosting productivity and containing costs?

Individually, people, productivity, and technology are not driving change, but collectively, they have created a perfect storm. Real estate has gone beyond just bricks and mortar, and companies that are prepared to take action now will have the potential to accelerate their success.

For more information, please contact:
Shawna Rogowski – shawna.rogowski@colliers.com
or
Chris Fyvie – chrisfyvie@colliers.com

Source
1. Odgers Berndtson: “After the Baby Boomers – The Next Generation of Leadership,” 2012

2. Stats Canada, May 2011

3. Bill Haas, Haas Performance Consultants LLC, AAPEX Expo, 2012

4. WORKshift Canada: “The Bottom Line on Telework,” 2011, David Craig, Director, DEGW quoted.

5. Colliers International Research

Spark the changing work environment from Chris Fyvie

My New Bio – 2013

What do you think?

Fyvie chris aug 2013 from Chris Fyvie

Office Space Construction Costs

Here is a great piece from a great designer that I work with here in Toronto.

Giotan's leasehold improvement estimates for brick and beam offices march 2013 from Chris Fyvie

Giotan construction estimate sheets march 2013 from Chris Fyvie

 SEARCH for your own offices here!
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Sale Leaseback Strategy

Spark sale-leaseback strategy from Chris Fyvie

Today we see two primary drivers that are prompting business owners to contemplate these strategies:

Global & Regional Economic Conditions are driving the need for increased productivity to ensure that businesses remain profitable and competitive, often translating into a requirement for major capital investment in equipment and systems. Commercial Property, as an asset class, is in high demand from many types of investors, ranging from the largest pension funds, Real Estate Investment Trusts to private investors. Values are high and properly priced assets sell quickly, making this an excellent window in which to execute a sale. The slow growth and recessionary environment around the globe has created a challenging environment for companies across many sectors, particularly those engaged in exports. However, these circumstances have produced an ideal environment in which real estate thrives; assets are positioned as attractive investments reinforced by an ultra-low interest rate environment. Companies that require capital may determine that the equity tied up in a real estate asset could produce a higher return if invested into the core business. This is where a sale-leaseback can be an excellent approach. Employing this strategy allows the organization to extract capital from real estate, and re-deploy it where needed, without disrupting day-to-day operations. Where the owner wishes to dispose of the operating business and related property, the timing is also right for maximizing value.

Current commercial property market conditions in Canada are excellent and look to remain that way in the near term. Now is a great time to evaluate the sale-leaseback option and be poised to execute if the strategy fits, before commercial property market conditions begin to shift. As the Global economy recovers, a counter-intuitive pull-back in demand for Canadian real estate may occur, as other investment options could become more attractive and compete for capital.

Demographics indicate that many small to medium sized organizations are owned by baby boomers. These individuals are approaching retirement and will need to grapple with succession planning, or examine the disposition of their businesses. A sale-leaseback or complete disposition strategy may work very well given today’s market conditions and help the retiring owner maximize value of the real estate.

Strategy #1
The Sale-Leaseback
The sale-leaseback occurs when ownership in the operating business will not change; the original owner sells the property and at the same time, signs a lease agreement with the new property owner. The proceeds of the property sale are then available for use in the core business. In the case of a retiring, or soon-to-retire business owner; the property sale proceeds form a component of the owner’s retirement funds. In this approach, the owner monetizes the value of the property for their personal use and maintains ownership of the operating business.

Are conditions right?
Assessing the Sale-Leaseback Opportunity:
Before going too far down the road, it is important to perform an assessment of the opportunity. Marketability of the real estate, and the strength of the financial covenant the operating business can provide on a lease, should both be considered.
1) The real estate should be well located for its purpose. It should also be functional and well maintained by today’s standards. In simple terms, it needs to be marketable in the future to prospective tenants or purchasers as a part of the acquirer’s investment strategy.
2) The lease covenant provided by a business is the next major component. The financial strength and track record of an operating business, without the real estate asset on its balance sheet, will need to be healthy enough to provide comfort to both the prospective purchaser and potentially, the financial entity that underwrites the loan for acquisition.

Strategy #2
FULL business DISPOSITION
In a complete sale of both the business and real estate, two different strategies may be employed.
1) When the acquiring business is larger and financially stronger than the original owner, it can be effective to sell the business first and subsequently sell the real estate.
This adds value to the property due to the financial strength of the new business which provides a stable tenancy and secure cash flow, making the property more attractive to investors.
2) Where the acquiring business is similar, or smaller in size than the original owner, it is prudent to have the real estate valued separately from the operating business to ensure that the property sells at full market value to either the acquiring business or to a third party. Often when the property and operating business are bundled, it is difficult to ascertain if full value has been realized for both assets.

Final Thoughts
This paper has touched on some of the drivers of sale-leaseback and related transactions that are currently creating interest for business owners. The ebb and flow of both financial and real estate markets will dictate strategy and timing, as well as warrant in-depth analysis for each asset in the context of its market and timing of the transaction. At present, the Canadian commercial property market is very strong. Careful monitoring of market dynamics will be important to optimize the results of any potential transaction.

Our hope is that this general overview will provide food for thought. Like all major financial and legal transactions, these strategies should be reviewed with tax and legal experts, as well as real estate advisors to ensure a prudent and strategically sound approach for your unique business and financial plans.

Ian MacCulloch
416-777-2200