How Soft Is Your Street?
Toronto’s downtown office market turned in its poorest results in Q4 '13 since 2003, with more space entering the marketplace than was leased, according to an Avison Young study. The question, AY VP and director of research Bill Argeropoulos tells us, is what will the impact be when the wave of new development combines with current market conditions? The ball is then in the tenants’ court to seek out the most beneficial lease terms as the window of available options widens and narrows. “Irrespective of the quoted asking rental rates for a building or market, we all know that, in most cases, they’re only a starting point for negotiations,” Bill says.
The study examined 140 existing (and under-construction) buildings covering all classes on Downtown Toronto’s 10 prime streets for commercial space. A bit of perspective, though—in some cases, elevated availability rates are the result of large blocks of space in buildings under construction, space that will get taken up when transactions underway are completed. According to the study, only three streets (Yonge, Richmond and Wellington) are outperforming the overall Q4 '13 Downtown Toronto availability rate of 10.1%.
