Quote:
Originally Posted by Jonovision
I don't fully understand all this pleading they are doing for this development. NSBI mentions they need roughly 22 storeys of office space in the next 5 years. Well, it seems to me that just 1 block away from this development is International Place which is set to start at any time.
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I am taking a guess here, but the pleading is that the development of office buildings, regardless of the project(s), is a strong message to send to investors and businesses looking at Halifax.
Knowing the Industry I can say that the amount of office space needed in the next 24 months is expected to be below the historical norm of 80,000 square feet of positive NET absorption. Therefore, unless we exceed the above amount by a significant margin, we won’t see the larger projects come to life soon. And in this day of age of financing it requires significant pre-leasing to secure (above 70% now).
So for a building like International place they would need to see at least 280,000 square feet leased before they would begin construction. Now they certainly could start sooner, but run the risk that plagued most of the 90’s office development downtown when Purdys II can to market and basically leased space at a loss due to over supply. This then caused the economic rent numbers to be dragged down to a level that made it unattractive to build and unable to be financed.