Suburban GTA office markets
The GTA North East’s office vacancy rate rose 90 basis points to 11.8 per cent in Q1, the third straight quarterly increase.
The GTA West rate increased 200 basis points to 16.1 per cent. That was impacted in a major way by Bell Canada making 615,000 square feet available for sublease at the Bell Mobility Campus at 5025 and 5115 Creekbank Rd. in Mississauga.
“There’s not as much of an uptick in vacancies and there’s not as much change in rents,” Figler said of the suburban GTA office performance. “If we haven’t seen any huge movement in the metrics by this point, I think there’s a sense in the market that we’ve probably made it through the worst.”
Figler has seen a shift to more use of a hub-and-spoke model, where companies maintain a primary office downtown and smaller spaces in the suburbs, but not a major flight to outlying areas.
He gave a hypothetical example of a company that had 50,000 square feet of space downtown keeping 35,000 square feet there and moving 7,500 square feet to Mississauga and 7,500 square feet to Markham, where rents are cheaper and the locations may be more convenient for some employees.
However, that model doesn’t make as much sense for companies with young talent, such as the tech sector, where most employees live downtown and don’t want to work in the suburbs.
“There’s a serious risk of making a move to save a little bit of money on the balance sheet but losing your top talent while doing that and destroying your company,” Mackenzie said.