Don't Expect An Office Migration
We thought “contagion” was a Steven Soderbergh movie until we spoke with CBRE chairman John O’Bryan (here with CBRE’s Peter Senst). John was talking to us about the office market for 2014, and how a current market softening tracks back to people’s experiences in the early 1990s. Downtown imploded then—rents dropped to such levels that they sucked in tenants from locations outside the core.
Don’t expect anything close to a re-run of the early 1990s, John says: “You are not going to move downtown from Bloor, or St. Clair West, for a one-time rent advantage, which will be quickly recalibrated.” There’s much discussion about market adjustment and the impacts of new office construction; however, John says office nodes outside the core are much better established. “This rationale that all tenants want to be in the core is not valid,” he says. (Reached for comment about tenants moving into the core, the Petula Clark song "Downtown" told us, "The lights are much brighter there.")
