2. 2 Research & Forecast Report | Q1 2016 | Greater Toronto Area / Office | Colliers International
Market Summaries
GTA Market Overview.....................................................................................................3
Downtown................................................................................................................4
Midtown...................................................................................................................5
Central North...........................................................................................................6
Central East............................................................................................................. 7
GTA East..................................................................................................................8
GTA North................................................................................................................9
GTA West............................................................................................................... 10
Glossary............................................................................................................................... 11
Table of Contents
3. 3Research & Forecast Report | Q1 2016 | Greater Toronto Area / Office | Colliers International
GTA Market Overview
Market Overview
The overall vacancy rate in the Greater Toronto Area (GTA)
office market in Q1 2016 remained stable at 4.8 percent,
while the availability rate increased slightly to 9.8 percent.
Most office markets saw their vacancy rates remain
relatively unchanged as the GTA office market continues
to be steady. With the GTA office market remaining firm,
rental rates throughout the region continue to increase. Of
the available space on the market in Q1 2016, the average
asking net rent increased to $18.68 from $17.19 in Q4 2015.
The rent is partially being driven up by the high demand
and low supply for quality space within certain submarkets
such as Downtown East, Downtown West, Yonge-Bloor
and Yonge-St. Clair. The suburban GTA West office market
is also experiencing an increase in rental rates as more
companies are demanding higher quality office space.
Almost five million square feet of office space is currently
under construction, with about two million square feet of
space set to be delivered throughout the year. Many of the
new office buildings that have been recently completed or
are set to be completed within the year have been fully or
almost fully leased, meaning that a large amount of space
is available but currently occupied. A test of the market
will be whether this space is leased or becomes vacant in
2016.
Investment Market
The Toronto investment market saw a decrease in
transactions during Q1 2016. According to RealNet data,
there were $452 million in sales and only 39 total
transactions during Q1. This decreased from 69 sales
totaling $2.1 billion in the previous quarter. According to
Real Capital Analytics, although the average sale price per
square foot was the largest in Q1 2016 since Q3 2014,
Toronto saw its lowest quarterly sales volume since Q1
2015. The GTA had a smaller number of transactions over
the past year due to limited supply of quality assets. The
largest property sold in Q1 2016 was the Allstate Corporate
Centre in the GTA North, purchased by Crown Realty
Partners and Crestpoint Real Estate Investments Ltd. for
$148,550,000. Overall, GTA North was the market with the
largest volume of sales in Q1 2016 ($165 million). The GTA
West and Midtown markets also had more than $100
million in sales ($126 million and $136 million respectively).
Market Indicators
Relative to prior period
Market Q4
2015
Market Q1
2016
Market Q2
2016* Trend
VACANCY RATE 4.8% 4.8%
NET ABSORPTION (570,806) (187,214)
AVAILABILITY RATE 9.2% 9.8%
AVERAGE ASKING NET RENT $17.79 $18.68
*Projected
Occupier Demand
The financial services sector continues to lead the
demand for office space primarily in the Downtown
market and specifically in the Downtown South, Financial
Core and Downtown West submarkets. Financial services
tenants typically occupy Class AAA and Class A office
buildings, the current availability rate in these office
buildings ranges between 8.2 percent and 11.2 percent,
which will facilitate the process of meeting the occupier
demands. The engineering sector comes next in the
demand for office space in both the GTA West and the
GTA North markets, clustered in areas with other
companies of the same industry.
Q1 2016 – 2,106,000 Square Feet
Financial Services
Engineering
Technology / Software
Technology / Software / Internet
Banking
Transportation
Retail Trade
Media
Entertainment
44%
25%
11%
5%
4%
4%
3%
2% 2%
Finan
Engin
Techn
Techn
Banki
Entert
Trans
Retail
Media
Historical Performance and Forecast
(600,000)
(400,000)
(200,000)
-
200,000
400,000
600,000
800,000
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
2009Q2
2009Q3
2009Q4
2010Q1
2010Q2
2010Q3
2010Q4
2011Q1
2011Q2
2011Q3
2011Q4
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
Net Absorption (SF) New Supply (SF) Vacancy Rate (%)
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
-1,000,000
-500,000
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
2014Q3
2014Q4
20151Q
20152Q
20153Q
20154Q
20161Q
20162Q
20163Q
20164Q
2017Q1
4. 4 Research & Forecast Report | Q1 2016 | Greater Toronto Area / Office | Colliers International
Downtown
The overall vacancy rate within the Downtown office market was
stable this quarter and remains at 2.5 percent. However, the
availability rate increased in Q1 2016 to 9.8 percent from 9.2 percent
in Q4 2015. The increase in availability rate is partially due to buildings
owners listing office space that is still occupied, but will be vacated
by numerous tenants that are set to move to new buildings. As the
success of newly/under construction buildings continues within the
downtown, the availability rate should continue to increase. A test
of the market will be whether the available space will continue to be
leased before it ever becomes vacant. While rents increased slightly
in the Downtown office market, rental rates within the Downtown
East and West submarkets continue to rise at a faster pace than the
rest of the market. Demand remains high and supply low for space in
Downtown East and West, leading to the higher rents.
Trends
>> Gross rental rates within Downtown East and West in Q1 2016
were $45.09 and $40.94 respectively.
>> The overall Downtown average gross rental rate for all asset
classes is $54.46 in Q1 2016.
>> Approximately two million square feet of office space could be
delivered to the Downtown market throughout 2016 – much of
which is already pre-leased.
Historical Performance and Forecast
Notable Lease Transactions
TENANT NAME - ADDRESS TYPE
APPROXIMATE SIZE
(SF)
1.
Fidelity Investments
- 483 Bay Street
Renewal 140,000
2.
Scotiabank
- 150 King Street West
Headlease 52,000
3.
Aviva
- 100 King St W
Headlease 50,000
Summary Statistics
Q1 2016 Regional Office Market Q4 2015 Q1 2016 Trend
Office Inventory 65,165,547 65,165,547
Net Absorption (301,228) (44,384)
Vacancy Rate 2.5% 2.5%
Availability Rate 7.1% 8.4%
Average Asking Net Rent $28.16 $28.63
Notable Lease Notable Sale New Supply
Upcoming New Supply
ADDRESS CLASS FLOORS SIZE (SF) DEVELOPER COMPLETION STATUS
7. 22 Adelaide Street West AAA 44 1,020,000 Brookfield Financial Real Estate Group Q1 2016 Under Construction
8. 351 King Street East A 17 500,000 First Gulf Q2 2016 Under Construction
9. 1 York Street A 35 800,000 HOOPP / Menkes Q3 2016 Under Construction
10. 100 Adelaide Street West AAA 40 905,722 Oxford Properties Group Inc. Q2 2017 Under Construction
11. 130 Queens Quay East A 178,300 The Daniels Corporation Q2 2019 Under Construction
Notable Sale Transactions
PURCHASER - ADDRESS PRICE
APPROXIMATE
SIZE (SF)
4. 103 Church Street $7,000,000 25,321
5. 84 Richmond Street East $5,500,000 12,258
6. 132 Jarvis Street $1,800,000 2,000
TORONTO
Union
Dundas
Bloor / YongeBay
Castlefrank
Wellesley
Queen’s Park
6
Carlton StCollege St
Dundas St
Queen St
King St
SpadinaAve
UniversityAve
YongeSt
ParliamentSt
Bloor St
Gardiner Expwy
1
5710
11
4
2 3 8
9
Lake Ontario
(600,000)
(400,000)
(200,000)
-
200,000
400,000
600,000
800,000
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
2009Q2
2009Q3
2009Q4
2010Q1
2010Q2
2010Q3
2010Q4
2011Q1
2011Q2
2011Q3
2011Q4
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
Net Absorption (SF) New Supply (SF) Vacancy Rate (%)
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
-500,000
0
500,000
1,000,000
1,500,000
2,000,000
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
2014Q3
2014Q4
20151Q
20152Q
20153Q
20154Q
20161Q
20162Q
20163Q
20164Q
2017Q1
Net Absorption New Supply Vacancy Rate %
5. 5Research & Forecast Report | Q1 2016 | Greater Toronto Area / Office | Colliers International
Midtown
The overall vacancy rate in the Midtown market remained almost
unchanged at 2.3 percent. While the market didn’t see much
change, asking rental rates continue to increase quarter over
quarter. Tenant demand for office space within the Yonge-Bloor,
Yonge-St Clair and Yonge-Eglinton markets is rising, while
the vacancy rate remains less than 2.5 percent for all of these
submarkets. The Midtown availability rate also remains low at 6.1
percent.
Trends
>> The Midtown market had the second largest sales transaction
volume of any GTA market in Q1 2016 as about $140 million of
office space was sold.
>> The two largest office property sales in the Midtown this quarter
were the sale of 1200 Bay Street at $86,750,000 and the sale of
1 St. Clair Avenue East for $35,000,000.
Summary Statistics
Q1 2016 Regional Office Market Q4 2015 Q1 2016 Trend
Office Inventory 15,065,008 15,065,008
Net Absorption (113,391) 14,811
Vacancy Rate 2.4% 2.3%
Availability Rate 6.0% 6.1%
Average Asking Net Rent $19.24 $21.14
Notable Lease Notable Sale New Supply
Upcoming New Supply
ADDRESS CLASS FLOORS SIZE (SF) DEVELOPER COMPLETION STATUS
11. 135 Yorkville Avenue A 11 50,000 Camrost Felcorp Q3 2016 Planned
Notable Sale Transactions
PURCHASER - ADDRESS PRICE
APPROXIMATE
SIZE (SF)
5. 1200 Bay Street $86,750,000 96,284
6. 1 St. Clair Avenue East $35,000,000 69,132
7. 96 - 100 Ossington Avenue $9,100,000 17,000
8. 1376 Bayview Avenue $3,300,000 7,245
9. 1905 Davenport Road $1,590,000 5,000
10. 61 Saint Nicholas Street $1,250,000 2,176
Bloor St
Dundas St
Queen St
Eglinton Ave
LansdowneAve
YongeSt
BayviewAve
DufferinSt
Lawrence Ave
Gardiner Expwy
6
TORONTO
11
1
2
3
4
9
8
7
510
Notable Lease Transactions
TENANT NAME - ADDRESS TYPE
APPROXIMATE SIZE
(SF)
1.
Teleperformance
- 75 Eglinton Aveneue East
Headlease 80,000
2.
Toronto Transit Commission
- 250 Bloor Street East
Headlease 66,000
3.
Crosslinx Transit Solutions
- 90 Eglinton Evanue East
Headlease 30,000
4.
Medgate
- 250 Bloor Street East
Headlease 22,000Historical Performance and Forecast
(600,000)
(400,000)
(200,000)
-
200,000
400,000
600,000
800,000
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
2009Q2
2009Q3
2009Q4
2010Q1
2010Q2
2010Q3
2010Q4
2011Q1
2011Q2
2011Q3
2011Q4
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
Net Absorption (SF) New Supply (SF) Vacancy Rate (%)
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
-150,000
-100,000
-50,000
0
50,000
100,000
150,000
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
2014Q3
2014Q4
20151Q
20152Q
20153Q
20154Q
20161Q
20162Q
20163Q
20164Q
2017Q1
Net Absorption New Supply Vacancy Rate %
6. 6 Research & Forecast Report | Q1 2016 | Greater Toronto Area / Office | Colliers International
Central North
The Central North market experienced a negative absorption of
10,918 square feet this quarter. Despite the negative absorption
recorded within the market, the North Yonge Corridor submarket
recorded a positive absorption, primarily in Class A buildings.
Office condos in this market are the most active within the city
of Toronto, recording more sales over the past few years and
spurring new office condo developments in the near future. The
average price per square foot of an office condo in a Class A
building ranges between low $600s and low $700s, depending on
many other factors such as size and configurations.
Trends
>> Average net asking rates rose by five cents from Q4 2015 to
reach $18.23 in Q1 2016.
>> The vacancy rate slightly increased to 2.8 percent this quarter
but is still considered low.
Summary Statistics
Q1 2016 Regional Office Market Q4 2015 Q1 2016 Trend
Office Inventory 10,981,677 10,981,677
Net Absorption (43,998) (10,918)
Vacancy Rate 2.7% 2.8%
Availability Rate 6.5% 7.8%
Average Asking Net Rent $18.18 $18.23
Notable Lease Notable Sale New Supply
Upcoming New Supply
ADDRESS CLASS FLOORS SIZE (SF) DEVELOPER COMPLETION STATUS
5. 4800 Yonge Street A 25 393,000 Oxford Properties Group Q4 2016 Planned
6. 4050 Yonge Street 7 367,000 Build Toronto Inc. Q4 2016 Planned
Notable Lease Transactions
TENANT NAME - ADDRESS TYPE
APPROXIMATE
SIZE (SF)
1.
Crosslinx
- 4711 Yonge Street
Headlease 50,000
2.
IBM
- 5775 Yonge Street
Headlease 17,000
3
4
Sheppard Ave
Highway 401
Lawrence Ave
Finch Ave
YongeSt
BayviewAve
KeeleSt
Steeles Ave
Eglinton Ave
BathurstSt
York University
5
6
TORONTO
VAUGHAN
Lawrence
Sheppard
Finch
Downsview
Lawrence West
Eglinton West Eglinton
1
2
Historical Performance and Forecast
(600,000)
(400,000)
(200,000)
-
200,000
400,000
600,000
800,000
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
2009Q2
2009Q3
2009Q4
2010Q1
2010Q2
2010Q3
2010Q4
2011Q1
2011Q2
2011Q3
2011Q4
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
Net Absorption (SF) New Supply (SF) Vacancy Rate (%)
Notable Sale Transactions
PURCHASER - ADDRESS PRICE
APPROXIMATE
SIZE (SF)
3. 1940 Avenue Road $1,800,000 2,500
4. 649 Sheppard Avenue West $1,335,000 2,305
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
-250,000
-200,000
-150,000
-100,000
-50,000
0
50,000
100,000
150,000
200,000
250,000
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
2014Q3
2014Q4
20151Q
20152Q
20153Q
20154Q
20161Q
20162Q
20163Q
20164Q
2017Q1
Net Absorption New Supply Vacancy Rate %
7. 7Research & Forecast Report | Q1 2016 | Greater Toronto Area / Office | Colliers International
GTA North
Crown Realty Partners and Crestpoint Real Estate Investments
Ltd. purchased Allstate Corporate Centre in Markham for $148.5
million, recording the largest office sale in Q1 2016 across the
GTA. The sale comprised four multi-tenant office buildings and one
parking garage. On the leasing side, the GTA North market posted
a positive absorption of 37,932 square feet and an increased
average asking net rent rate by 35 cents from last quarter to reach
$16.37 per square foot in Q1 2016.
Trends
>> The GTA North market had 37 percent of the office space sold
within the GTA this quarter.
>> The vacancy rate dropped by 0.5 percent since last quarter to
reach 6.5 percent in Q1 2016.
Notable Lease Transactions
TENANT NAME - ADDRESS TYPE
APPROXIMATE
SIZE (SF)
1.
Epson
- 185 Renfrew Drive
Renewal 20,000
2.
GMC Software Technology Inc.
- 675 Cochrane Drive
Headlease 18,574
3.
DealerFX
- 80 Tiverton Court
Headlease 17,595
Summary Statistics
Q1 2016 Regional Office Market Q4 2015 Q1 2016 Trend
Office Inventory 12,400,038 12,400,038
Net Absorption (77,647) 37,932
Vacancy Rate 7.0% 6.5%
Availability Rate 11.8% 10.2%
Average Asking Net Rent $16.02 $16.37
Notable Lease Notable Sale New Supply
Upcoming New Supply
ADDRESS CLASS FLOORS SIZE (SF) DEVELOPER COMPLETION STATUS
8. Millway Rd. at Apple Mill Rd A 14 350,000 Calloway REIT, SmartCentres Q2 2016 Under Construction
9. 7777 Weston Road A 8 136,000 Liberty Developments Q3 2016 Planned
10. 2833 16th Avenue A 60 9,000,000 Cadillac Fairview Planned
11. 1555 16th Avenue 7 120,650 Investors Group Planned
Newmarket
Richmond
Hill
King City
Highway 407
Aurora RdWellington St
Highway404
YongeSt
Stouffville Rd
WardenAve
Highway400
Steeles Ave
King Rd
Highway27
Davis Dr
10
VAUGHAN
RICHMOND HILL
AURORA
9
8
11
5
6
71 3
24
Notable Sale Transactions
PURCHASER - ADDRESS PRICE
APPROXIMATE
SIZE (SF)
4. Allstate Corporate Centre $148,550,000 575,969
5. 3565 King Road $2,415,000 10,000
6. 10265 Yonge Street $2,232,500 8,000
7. 8980 Woodbine Avenue $2,220,000 6,800
Historical Performance and Forecast
(600,000)
(400,000)
(200,000)
-
200,000
400,000
600,000
800,000
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
2009Q2
2009Q3
2009Q4
2010Q1
2010Q2
2010Q3
2010Q4
2011Q1
2011Q2
2011Q3
2011Q4
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
Net Absorption (SF) New Supply (SF) Vacancy Rate (%)
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
-200,000
-100,000
0
100,000
200,000
300,000
400,000
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
2014Q3
2014Q4
20151Q
20152Q
20153Q
20154Q
20161Q
20162Q
20163Q
20164Q
2017Q1
Net Absorption New Supply Vacancy Rate %
8. 8 Research & Forecast Report | Q1 2016 | Greater Toronto Area / Office | Colliers International
Central East
The office leasing activity in the Central East market was not
entirely robust during the first quarter of 2016 with a few small
to mid-sized office tenant movements in this quarter and almost
no change in absorption. However, the availability rate is at 10.8
percent and with the current availability of big blocks of office
space in the Central East market, it is expected to see more leasing
activity during 2016.
Trends
>> Average asking net rental rates slightly increased to $12.88 per
square foot.
>> No sale activity was recorded in the Central East market during
Q1 2016.
Notable Lease Transactions
TENANT NAME - ADDRESS TYPE
APPROXIMATE
SIZE (SF)
1.
Capital One
- 255 Consumers Road
Headlease 42,584
2.
Cmictrics
- 340 Ferrier Street
Sublease 14,278
Summary Statistics
Q1 2016 Regional Office Market Q4 2015 Q1 2016 Trend
Office Inventory 14,958,978 14,958,978
Net Absorption (103,622) (169)
Vacancy Rate 5.5% 5.2%
Availability Rate 9.9% 10.8%
Average Asking Net Rent $12.79 $12.88
Notable Lease Notable Sale New Supply
Upcoming New Supply
ADDRESS CLASS FLOORS SIZE (SF) DEVELOPER COMPLETION STATUS
3. 3377 Steeles Avenue East A 6 280,000 Bentall Real Estate Services Planned
4. 101 Gordon Baker Road A 12 250,000 Osmington Inc. Planned
Highway 407
Eglinton Ave
Finch Ave
Highway404
YongeSt
VictoriaParkAve
KennedyAve
Sheppard Ave
Steeles Ave
Highway 401
MarkhamRd
KeeleSt
3
SCARBOROUGH
TORONTO
Finch
Kennedy
Union
Lake Ontario
2
4
1
3
Historical Performance and Forecast
(600,000)
(400,000)
(200,000)
-
200,000
400,000
600,000
800,000
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
2009Q2
2009Q3
2009Q4
2010Q1
2010Q2
2010Q3
2010Q4
2011Q1
2011Q2
2011Q3
2011Q4
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
Net Absorption (SF) New Supply (SF) Vacancy Rate (%)
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
-200,000
-150,000
-100,000
-50,000
0
50,000
100,000
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
2014Q3
2014Q4
20151Q
20152Q
20153Q
20154Q
20161Q
20162Q
20163Q
20164Q
2017Q1
Net Absorption New Supply Vacancy Rate %
9. 9Research & Forecast Report | Q1 2016 | Greater Toronto Area / Office | Colliers International
GTA East
Positive absorption took place in the GTA East market this quarter,
primarily in Class B buildings where rental rates are affordable,
recording an average net asking rate of $9.33. As a result of this
positive absorption, vacancy rate slightly decreased to 5.4 percent
in Q1 2016.
Trends
>> Class A average net asking rates increased to $12.36 per square
foot.
>> The current availability rate is 12.8 percent, broken down evenly
between Class A and Class B office buildings.
Summary Statistics
Q1 2016 Regional Office Market Q4 2015 Q1 2016 Trend
Office Inventory 6,095,990 6,095,990
Net Absorption 56,623 10,342
Vacancy Rate 5.5% 5.4%
Availability Rate 9.7% 12.8%
Average Asking Net Rent $11.29 $12.36
Notable Lease Notable Sale New Supply
Upcoming New Supply
ADDRESS CLASS FLOORS SIZE (SF) DEVELOPER COMPLETION STATUS
2. 65 Bayly Street West 2 31,500 Medallion Corporation Q1 2016 Under Construction
3. 400 Consilium Place A 15 375000 (900,000 in 3 towers) Kevric Planned
Taunton Rd
Kingston Rd
Highway 407
BrockRd
Sheppard Ave
Steeles Ave
Highway 40
York&DurhamLine
Scarborough
Town Centre
Stouffville
Pickering Osha
Markham
3
2
TORONTO
OSHAWA
PICKERING1
Lake Ontario
Historical Performance and Forecast
(600,000)
(400,000)
(200,000)
-
200,000
400,000
600,000
800,000
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
2009Q2
2009Q3
2009Q4
2010Q1
2010Q2
2010Q3
2010Q4
2011Q1
2011Q2
2011Q3
2011Q4
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
Net Absorption (SF) New Supply (SF) Vacancy Rate (%)
Notable Lease Transactions
TENANT NAME - ADDRESS TYPE
APPROXIMATE
SIZE (SF)
1.
Regus
- 3660 Midland Avenue
Headlease 11,828
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
-140,000
-120,000
-100,000
-80,000
-60,000
-40,000
-20,000
0
20,000
40,000
60,000
80,000
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
2014Q3
2014Q4
20151Q
20152Q
20153Q
20154Q
20161Q
20162Q
20163Q
20164Q
2017Q1
Net Absorption New Supply Vacancy Rate %
10. 10 Research & Forecast Report | Q1 2016 | Greater Toronto Area / Office | Colliers International
GTA West
The GTA West office market was mostly stagnant throughout Q1
2016 as it relates to key indicators such as vacancy rates and
absorption figures. Some of the highlights included some large office
renewals, the largest being Desjardins General Insurance Group
at 3 Robert Speck Parkway within Mississauga City Centre. With
just over 536,000 SF of office space under construction or being
delivered in 2016, we can expect tenant inducements to continue to
rise as landlords compete for tenancies. Another continuing trend in
the GTA West which is largely due to increased occupancy costs is
tenant densification. Tenants are continuing to demand higher quality
in the GTA West that is near amenities and transit. The demand for
this type of office space will continue throughout 2016.
Trends
>> The demand for newer space in the GTA West should continue as
the flight to quality keeps driving new development. The end of Q1
saw the delivery of two new office buildings and we will likely see
another 250,000 SF of new office space delivered by the end of
2016.
>> Numerous office property sale transactions took place in the GTA
West in Q1 2016 as REITS and pension funds continue to be the
most active. Sales in the GTA West totaled about $125,000,000
with the average price per SF being around $200.
Summary Statistics
Q1 2016 Regional Office Market Q4 2015 Q1 2016 Trend
Office Inventory 39,848,067 39,848,067
Net Absorption 12,457 (194,828)
Vacancy Rate 9.2% 9.5%
Availability Rate 13.2% 13.1%
Average Asking Net Rent $15.04 $15.98
Notable Lease Notable Sale New Supply
Upcoming New Supply
ADDRESS CLASS FLOORS SIZE (SF) DEVELOPER COMPLETION STATUS
10. 255 Longside Drive B 1 70,000 NC Warehouse Inc. Q2 2016 Under Construction
11. 2476 Argentia Road A 4 100,000 Sunlife Assurance Company of Canada Q2 2016 Under Construction
12. 2727 Meadowpine Boulevard A 7 150,000 Carttera Private Equities Inc. Q1 2017 Under Construction
13. 610 Chartwell Road A 4 104,000 First Gulf Q3 2017 Under Construction
Notable Sale Transactions
PURCHASER - ADDRESS PRICE
APPROXIMATE
SIZE (SF)
4. 1100 Burloak Drive $19,020,442 124,116
5. 5420 North Service Road $18,793,558 134,757
6. 151 City Centre Drive $15,000,000 79,259
7. 5575 North Service Road $13,898,976 92,000
8. 5515 North Service Road $13,037,024 84,570
9.
200 Matheson Boulevard West &
5950 Avebury Road
$12,100,000 52,112
Kipling
Georgetown
Milton
Lake Ontario
QEW
Highway 407
Highway 403
hwy427
Highway10
Highway 401
BRAMPTON
12
13
10
8
11
3
12
TORONTO9
OAKVILLE
6
MISSISSAUGA
54
7
Historical Performance and Forecast
(600,000)
(400,000)
(200,000)
-
200,000
400,000
600,000
800,000
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
2009Q2
2009Q3
2009Q4
2010Q1
2010Q2
2010Q3
2010Q4
2011Q1
2011Q2
2011Q3
2011Q4
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
Net Absorption (SF) New Supply (SF) Vacancy Rate (%)
Notable Lease Transactions
TENANT NAME - ADDRESS TYPE
APPROXIMATE
SIZE (SF)
1.
Desjardins General
Insurance Group
- 3 Robert Speck Parkway
Renewal 260,261
2.
Simcore
- 1 Robert Spec Parkway
Headlease 75,000
3.
Shred-it
- 1383 North Service Road
Headlease 47,000
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
-600,000
-400,000
-200,000
0
200,000
400,000
600,000
800,000
1,000,000
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
2014Q3
2014Q4
20151Q
20152Q
20153Q
20154Q
20161Q
20162Q
20163Q
20164Q
2017Q1
Net Absorption New Supply Vacancy Rate
11. 11Research & Forecast Report | Q1 2016 | Greater Toronto Area / Office | Colliers International
Glossary
Weighted Average Asking Net Rent:
The dollar amount requested by landlords for an available space, expressed as an average based on the weight of
available space.
Availability:
The total amount of space that is currently being marketed as available for lease or sublease at the end of the quarter.
It includes space that is available, regardless of whether the space is vacant or occupied.
Net Absorption:
The net absorption in available space in a given market between the current quarter and the previous quarter.
Direct Availability:
Space that is being offered for lease directly from the landlord or owner of a building, not space by another tenant in the
building trying to sublet a space that has already been leased.
Sublease Availability:
Sublet space that is available for sublease by a tenant to another lessee for a term equal to or shorter than that held by
the tenant under its original lease with the landlord.
Under Construction:
Buildings where actual ground breaking has occurred (site excavation or foundation poured) and construction is
ongoing (not abandoned or discontinued) but for which a certificate of occupancy has not yet been issued.
New Supply:
Total square footage with completed construction, where all that remains is the installation of tenant finishes.
Days on the Market (DOM):
How many days an available industrial property has been on the market for.
GTA Central:
Includes East York, Etobicoke, North York, Scarborough, Toronto and York.
GTA East:
Includes Ajax, Oshawa, Pickering, and Whitby.
GTA North:
Includes Aurora, Markham, Newmarket, Richmond Hill, Vaughan and Whitchurch-Stouffville.
GTA West:
Includes Brampton, Burlington, Caledon, Milton, Mississauga and Oakville.
GTA Southwest:
Includes Hamilton and Stoney Creek.
Forecast Assumptions & Terminology
Absorption was calculated using moving averages of historical absorption data and supplemented with incoming new
speculative and build-to-suit developments.
Colliers International has adopted NAIOP’s terms and definitions which is reflected in this glossary and report.