Avison Young releases its First Quarter 2011 Greater Toronto Area Office
TORONTO, April 26 /CNW/ - The Greater Toronto Area (GTA) office market
has made steady and significant strides since the recession ended in
late 2009 by returning to a more balanced environment and surprising
many pundits along the way. Although availability and vacancy rates
remain in double-digit territory in the suburbs, activity in the
midtown and downtown markets is robust with demand from a wide spectrum
of user groups seeking varying space requirements. This has raised the
prospect of new office development once again in Downtown Toronto.
These are some of the key trends noted in Avison Young's First Quarter 2011 Greater Toronto Area Office Market Report, released today.
According to the report, the overall availability rate (which includes
space being marketed for lease but not physically vacant) in the GTA
declined 100 basis points (bps) in the past 12 months to 10.5% in the
first quarter of 2011. By comparison, the overall vacancy rate
(physically unoccupied space) across the region is down to 8.9%, having
dropped 130 bps over the same period.
The GTA suburban market, comprising the North, East and West districts,
combined to post an availability rate across all building classes of
12.1%. The West (13.9%) and East (12.2%) suburbs remained the weakest,
while the North is the strongest at 6.8%.
Compared to the suburbs, the downtown and midtown markets are in much
better shape, displaying strong, consistent tenant interest, with
availability and vacancy rates firmly in single-digit territory.
Midtown closed out the first quarter of 2011 with availability and
vacancy rates of 8.5% and 7.4%, respectively. Downtown saw its overall
availability rate drop to a two-year low, presently at 8.9%. Vacancy
sits even lower at 6.6% - down 200 bps from one year ago.
"The downtown market came through the recent economic recession with
some hiccups, but since the recession ended some 15 months ago, there
has been a steady stream of tenant interest and deal velocity, contrary
to the expectations of some market observers who projected vacancy
rates to balloon to the mid-to-high teens," comments Bill Argeropoulos, Vice-President and Director of Research (Canada) for Avison Young.
"All one has to do is look at the successful lease-up of the newest
downtown office developments, currently 93% leased and climbing. What's
even more compelling is that there are now discussions underway that
will soon result in the announcement of one, two or even three new
office buildings, kick-starting the next development cycle."
Argeropoulos continues: "This is not entirely surprising as the latest
developments are now nearly leased up and largely out of play - at
least for large tenants - and most of the remaining large-block
options, which are concentrated in the pricier class AAA towers, are
not garnering the same attention as new construction."
While market observers do a good job of measuring availability, vacancy
and absorption, another key metric on the health of the market is the
number of active tenant mandates. "In this regard, we are tracking just
over 3 million square feet of tenants who are assessing their space
requirements in Downtown Toronto, with at least a dozen in excess of
100,000 square feet - an encouraging sign for those with large-block
vacancy or looking to kick off a new development," concludes
Founded in 1978, Avison Young is Canada's largest independently-owned
commercial real estate services company and the only national,
Canadian-owned, principal-managed real estate brokerage firm in the
country. Headquartered in Toronto, Ontario and ranked among Canada's
leading national commercial real estate organizations, Avison Young is
a full-service commercial real estate company comprising more than 700
real estate professionals in 23 offices across Canada and in the U.S.
The company provides value-added, client-centric investment sales,
leasing, advisory, management, financing and mortgage placement
services to owners and occupiers of office, retail, industrial and
∙ Click here to view Avison Young's First Quarter 2011 GTA Office Market
SOURCE Avison Young (Canada) Inc.
For further information:
For further info/comment/photos:
- Bill Argeropoulos, Vice-President and Director of Research (Canada), Avison Young:
(416) 673-4029 or cell (416) 906-3072
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