Quote:
Originally Posted by isaidso
Toronto's downtown vacancy rate has plummeted to 5.1% according to the Star with 10% widely viewed as a healthy equilibrium level. There are 14 office projects with 13.5 million square feet being planned. These 326m twins likely hold roughly 5-6 million square feet of that total and there are another 12 office towers on their way.
Not only is supply very tight, but the additional space wouldn't all come on stream till about 2018. The problem is that Toronto needs the space now. Rather than scrambling to find tenants, it might not be enough. What's certain is that Toronto is about to encounter a major office construction boom.
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Keep in mind there will be nearly 5 million square feet in the downtown core under construction by the end of this year. That will not only satiate demand but since not even 50% of it is preleased major institutional developers are actually worried about a bit of a glut. There are almost no major tenants on the street right now, with the exception of one which is likely to be announced soon (think accounting firm).
The latest CBRE figures put core absorption at -144,561 sf YTD, and greater core absorbtion at -134,439sf. That's not really the leading indicator of a future office boom.
The financial core is comprised of roughly 44 million square feet, with the entire central toronto region being 66 million, so adding 13 million in 5 years would be an astounding period of growth, especially following on a past 10 years which already saw strong growth.
I really don't see how one could say an office boom is a certainty.