CBRE Report for Second Quarter Reflects Decrease in Leasing Interest in Downtown Core
A recent CBRE report on National Office and Industrial Trends for the Second Quarter of 2013 showed that there has been a slight decrease of leasing demand of office space in the downtown sector – the second consecutive quarter in which “…more office space was returned to the market than was absorbed by tenants”. This is an interesting development since some of Canada’s fastest developing cities, which include Toronto, Calgary and Vancouver, are currently in high stages of new office space development.
In Toronto, there was 5.5 million SQF of new office space currently under construction during the second quarter. There are those who suggest that it is the level of development that might have affected the demand decrease. John O’Bryan, Chairman of CBRE Limited thinks that, “…with 22 downtown office towers now under various stages of construction across the country, one has to wonder if the [market demand] pendulum is beginning to swing too far in the opposite direction.”
Richard Moore, Director of Research of CBRE Limited, also shared that he thinks that the commercial real estate market in Toronto is changing.
“While the Canadian office market is strong in comparison to almost any other country in the world, there are new dynamics at play which could have implications for the market once the wave of new supply comes on line in the years ahead.”
The report also showed a constant increase in the industrial sector in the GTA, with 7.7 million SQF of positive absorption in the first half of 2013. Directly related to this is the growth of new retail in the GTA, which according to Moore, “…means new distribution networks, and the need for more warehouse space”.
Although the downtown sector has shown negative absorption numbers, the suburban region – the market is showing as moderately stronger then the downtown office markets due in part to the decrease in construction over the last two quarters. This is a development for business owners to take note of.
New distribution markets and suburban commercial real estate entail new clients, new working relationships and business opportunities – all things that Jeff Wolfe is looking forward to taking part in. Stay tuned for upcoming reports and hopefully we will have the same positive information to share.
—
published on:July 8th, 2013
